o 


II 


ri^ 


By 

SIDNEY  MORSE 

Sometime  of  t/ie  Editorial  Staff  of  "Success  Magazine", 

I^43J3qgiTig  Editor,    'The  Cr^sman " 

Director  Peoples"  IMversity 


m 


UNIVERSITY  CITY  PUBLISHING  COMPANY 


UNflVERSITY  CITY 
SAINT  LOUIS,  MISSOURI 
1912 


Cojiyrifrht   191«  by 
UNIVERSITY    CITY    PUBLISHING    COMPANY 

UNIVERSITY     CITY 
SAINT    I.OUIS,     MISSOURI 


TO  THE  AMERICAN  PEOPLE 

WHO    LOVE    THUTH,    CHERISH    JUSTICE    AND 

KEEP  ALIVE  IN  THEIR  BREASTS  THE  SPARK  OF 

ETERNAL    VIGILANCE    AGAINST    OPPRESSION 

WHICH  IS  THE  PRICE  OF  LIBERTY 

THIS  VOLUME  IS  INSCRIBED 

LEST  WE  FORGET 


PUBLISHER'S  NOTICE. 

The  Siege  of  University  City  is  sold  exclusivelij  by  subscrip- 
tion. The  Winner;,  the  Woman's  Magazine,  and  the  Woman's  Farm 
Journal,  formerly  numbered  their  readers  by  the  millions.  The 
investors  in  the  Development  and  Investment  Company,  the  People's 
United  States  Bank,  the  Lewis  Publishing  Company,  the  University 
Heights  Realty  and  Development  Company,  and  other  Lewis  cor- 
porations number  many  thousands.  The  membership  of  the  Ameri- 
can Woman's  League  is  upwards  of  one  hundred  thousand.  The 
enrollment  of  citizens  in  the  American  Woman's  Republic  bids  fair 
to  run  far  into  the  millions.  There  is  not  a  town  or  village  in 
America  where  persons  directly  connected  with  the  so-called  I^ewis 
enterprises  are  not  to  be  found.  There  is  not  a  man  or  Avoman  in 
America  but  has  heard  something  of  the  Lewis  case,  and  has  some 
degree  of  curiosity  to  know  the  actual  facts  here  presented.  The 
notoriety  of  this  ease  is  world-wide. 

The  Siege  of  University  City  is  the  only  comprehensive  and 
autlientic  history  of  the  great  Lewis  ease  in  existence.  We  propose 
to  distribute  at  least  a  million  copies  of  this  book  througliout  the 
United  States.  To  that  end  agents  are  wanted  in  every  community. 
We  will  compensate  any  purchaser  who  will  send  us  the  name  and 
address  of  an  experienced  solicitor,  or  other  competent  person, 
•whom  we  can  employ  as  local  representative.  Special  blanks  for 
this  purpose  will  be  furnished  on  application.  Address  the  Uni- 
versity City  Publishing  Company,  University  City,  Saint  Louis, 
Missouri. 


PREFACE 

Every  newspaper  man,  every  editor,  every  periodical  publisher 
in  the  United  States  is  aware  that  Tlie  Siege  of  University  City 
is  the  greatest  business  romance  America  has  ever  known.  The 
Indianapolis  News  deserves  distinction  as  the  only  newspaper  to 
investigate  and  print  the  facts.  The  New  York  Times  once  under- 
took a  similar  inquiry  at  the  instance  of  former  Governor  David  R. 
Francis,  of  Missouri,  but  this  was  thwarted  by  the  peace  negotia- 
tions then  pending  between  Mr.  Lewis  and  Postmaster-General 
Cortelyou.  Except  for  these  instances  the  press  has  been  content  to 
publish  doctored  news  dispatches  from  St.  Louis  or  to  accept  the 
inspired  output  of  the  Administration  news  bureau  at  Washington. 

John  V.  Dittemore,  now  head  of  the  Christian  Science  Publish- 
ing Company,  in  Boston,  once  brought  the  Lewis  case  to  the  per- 
sonal attention  of  S.  S.  McClure,  of  McClure's  Magazine,  and  Sam- 
uel Hopkins  Adams,  the  distinguished  journalist.  Dittemore 
expressed  to  Lewis  the  hope  that  an  investigation  would  follow. 
None  was  made.  No  journalist  has  ever  taken  up  this  theme.  No 
magazine  editor  has  ever  assigned  it  as  a  subject  for  investigation. 
It  has  been  conceded  that  no  periodical  publisher  could  afford  to 
antagonize  the  Postoffice  Department  of  the  United  States  by  giving 
publicity  to  anything  approaching  a  true  history  of  the  Siege. 
Why.''  do  you  ask.''  Because  there  is  not  a  publication  in  America 
which  could  not  be  excluded  from  the  mails,  nor  is  there  a  publisher 
who  could  not  be  financially  ruined  by  the  tactics  that  have  obtained 
in  this  case.  The  arbitrary  discretion  exercised  by  the  Postmaster- 
General  under  existing  postal  laws  hangs  like  a  veritable  sword  of 
Damocles  over  the  periodical  publishers  of  the  United  States. 

I  have  sought  at  different  times  to  interest  a  considerable  numoer 
of  journalists,  editors  and  publishers  of  my  acquaintance  in  the 
project  of  making  the  Lewis  case  the  subject  of  a  great  magazine 
serial.  I  was  informed,  more  or  less  pointedly,  that  not  even  the 
so-called  muckraking  magazines  could  afford  to  antagonize  the 
power  of  the  Postoffice  Department.  I  must  make  one  exception. 
One  daring  young  publisher  consented  to  handle  the  story.  In  his 
presence  I  submitted  the  proposition  to  the  novelist,  David  Graham 
Phillips,  whose  "Treason  of  the  United  States  Senate"  was  per- 
haps the  boldest  journalistic  venture  of  modern  times.  Mr.  Phil- 
lips promised,  on  the  completion  of  certain  manuscripts  then  in 
process,  to  visit  University  City  in  July,  1911,  to  make  a  prelim- 
inary investigation.  Within  a  week  he  had  met  death  at  the  hand 
of  an  assassin. 

vii 


THE  SIEGE  OF  UNIVERSITY  CITY 

On  taking  up  the  subject  of  printing  this  volume  with  the  same 
publisher,  by  letter,  a  few  months  later,  I  received  this  reply:  "I 
have  not  read  the  book,  but  if  the  plan  which  you  and  I  discussed 
some  time  ago  with  David  Graham  Phillips  had  been  carried  out,  I 
think  that  a  sale  of  a  million  copies  would  have  proved  a  very  mod- 
erate estimate.  There  is  no  doubt  but  that  there  exists  in  this  Lewis 
case  one  of  the  most  gigantic  business  romances  that  has  ever  hap- 
pened. I  know  that  you  see  it  in  that  way,  and  I  assume  you  have 
had  the  book  so  written  as  to  get  the  full  benefit  of  the  opportunity. 
*  *  *  But,  as  I  told  you  \vhen  we  wei'e  discussing  this  matter 
with  Phillips,  Lewis  has  made  so  many  strong  enemies  throughout 
the  country  that,  while  I  sympathize  with  him  and  believe  in  him 
and  his  integrity,  I  should  not  be  willing  to  run  any  risk  of  finan- 
cial loss  in  the  handling  of  this  story.  *  *  *  I  do  not  see  what 
could  be  done  to  queer  the  sale  of  your  book,  if  it  is  properly  writ- 
ten ;  but  with  the  knowledge  of  what  was  done  to  Lewis,  I  do  not 
want  to  get  my  fingers  burned  in  that  fire."  Inability  to  command 
the  services  of  the  journalists  employed  by  the  great  magazines, 
and  the  unwillingness  of  periodical  publishers  to  take  up  the  sub- 
ject on  their  own  initiative,  must  be  the  writer's  apology  for  ven- 
turing to  break  a  lance  in  this  arena. 

In  seeking  to  carry  out,  to  the  best  of  ray  own  ability,  the  plan 
discussed  with  Mr.  Phillips,  I  have  gratefully  availed  myself  of 
his  masterly  insight  and  admonitions.  The  first  essential  to  a  proper 
presentation  of  the  Lewis  case,  he  felt,  was,  that  it  must  be  ap- 
proached in  a  sympathetic  spirit.  I  recall  vividly  the  scene  of  our 
interview  in  Mr.  Phillips'  spacious  chambers  at  the  National  Arts 
Club  in  New  York,  overlooking  quaint  old  Gramercy  Park.  I  re- 
member, also,  the  story  of  Abraham  Lincoln's  War-Secretary,  Stan- 
ton, which  Phillips  told  to  illustrate  his  attitude  toward  Lewis. 
Lincoln  was  presenting  to  his  Cabinet  the  merits  and  demerits  of 
his  three  greatest  generals  as  candidates  for  supreme  command. 
The  record  of  none  was  without  flaw.  Grant  was  accused  of  over- 
fondness  for  whiskey.  Sherman  was  charged  with  being  too  hot- 
tempered  and  profane.  AlcClellan,  it  was  hinted,  was  sluggish  and 
over-cautious.  "They  all  seem  to  be  devils,"  said  Stanton.  "Now, 
what  I  want  to  know  is,  which  of  'em  is  my  kind  of  a  devil."  "The 
Postoffice  Department,"  said  Phillips,  "has  tried  to  make  out  that 
Lewis  is  a  devil.  But  from  all  I  can  hear  of  him,  he  is  my  kind 
of  a  devil.  In  other  words,  most  of  the  criticisms  against  LeAvis 
are  really  due,  I  suspect,  to  the  fact  that,  like  myself,  he  is  a 
radical. 

"Don't  commit  the  fatal  blunder,"  continued  Mr.  Phillips,  "of 
trying  to  keep  back  or  cover  up  anything.  If  I  undertake  to  write 
Lewis'  story,  I  want  to  put  all  the  charges  against  him  into  my 
first  chapter.  Then  I  want  to  freely  admit  the  truth  of  every  charge 
that  can  be  substantiated.     If  I-ewis  has   stolen   any  chickens,  let 

viii 


THE  DREYFUS  CASE  OF  AMERICA 

me  give  the  correct  date,  the  name  of  the  police  judge  by  whom 
he  was  fined,  and  whether  he  got  ten  days  or  ten  dollars.  Let  me 
first  get  all  this  out  of  the  way.  Then,  when  I  go  down  the  line 
after  these  Government  officials  and  accuse  them  of  destroying  his 
business,  if  they  start  the  hue  and  cry  that  I  am  trying  to  defend 
a  chicken  thief,  all  that  will  have  been  fully  discounted."  In  the 
chapter,  "Trial  by  Newspaper,"  and  those  next  following,  I  have 
sought  to  obey  this  admonition. 

As  the  plot  of  this  story  has  evolved  itself  and  fallen  into  true 
perspective,  its  horizon  has  seemed  to  widen.  There  has  gradually 
developed,  a  three-fold  interest,  not  merely  personal,  but  also 
national,  even  historic.  As  a  simple  unadorned  biography,  no  ro- 
mance has  ever  gripped  or  lield  me  with  more  absorbing  human 
interest.  As  current  national  drama,  one  can  feel  in  it  the  vital 
throb  of  great  political  and  economic  issues.  As  history,  it  thrills 
with  the  passion  of  the  age-long  Aryan  strife  for  human  freedom. 

Lewis,  a  few  years  ago,  was  known  throughout  the  Central  and 
Far  West  as  "the  man  who  beat  the  United  States  Government." 
He  is  now  more  often  called  the  Dreyfus  of  America.  The  change 
is  significant.  The  battle  has  gone  sorely  against  him.  Only  the 
unquenchable  fires  of  the  very  temperamental  optimism  which  cre- 
ates and  sustains  antagonism  to  him,  have  prevented  the  shadows 
of  tragedy  from  darkening  about  his  path.  For  this  story,  viewed 
in  its  merely  personal  phase,  is  a  tragedy.  One  of  the  tortures  of 
the  Inquisition  consisted  in  piling  great  weights  upon  the  victim's 
chest.  Others  were  added.  Then  more.  At  last  the  power  of 
human  resistance  was  exceeded.  The  life  of  the  strongest  man  was 
literally  crushed  within  him,  Lewis  still  breathes  under  the  debts 
that  have  been  piled  upon  him.  But  expense  is  constantly  being 
added  to  expense.  Attack  follows  attack.  Indictment  succeeds  in- 
dictment. That  the  outcome  must  inevitably  be  some  form  of 
tragedy,  unless  relief  shall  come,  seems  too  clearly  manifest. 

The  mere  personal  equation  of  temperament  and  character,  and 
of  the  spirit  of  the  man  who  has  sustained  a  contest  so  unequal, 
presents,  to  the  moralist  and  biographer  an  alluring  theme.  But 
underlying  all  considerations  of  temperament,  motive  and  other 
aspects  of  personality,  are  the  national  issues,  the  social,  political 
and  economic  problems  of  the  times  whose  interaction  forms  warp 
and  woof  of  the  changeful  pattern  of  this  story.  Lewis  figures  not 
merely  as  a  publisher  of  cheap  magazines  and  women's  newspapers. 
He  appears  rather  as  a  pioneer  in  the  transformation  of  a  whole 
branch  of  the  periodical  publishing  industry,  namely,  mail  order 
publications.  He  is  here  seen  not  only  as  a  promoter,  but  as  an 
organizer  of  almost  unlimited  supplies  of  wealth  through  the  aggre- 
gation of  small  savings.  It  was  not  his  ambition  to  become  a 
banker.  Yet  he  founded  the  first  mail  order  bank  in  America  and 
later  led  the  agitation  for  a  national  postal  bank.     To  this  the  Post- 


THE  SIEGE  OF  UNIVERSITY  CITY. 

office  Department  at  length  has  tardily  yielded.  Lewis  projected, 
in  the  American  Woman's  League,  the  first  great  women's  National 
co-operative  industrial  organization.  He  proposed,  in  the  People's 
University,  a  new  type  of  institution  for  popular  education.  He 
))rojeeted  the  University  City  Plan,  for  the  transformation  of  the 
West  End  of  St.  Louis  into  a  parklike  City  Beautiful  through  the 
co-operation  of  a  group  of  real-estate  owners.  He  first  proposed 
the  linking  of  University  City  with  the  heart  of  St.  Louis  by  electric 
subway.  These  conceptions  stamp  him  as  a  man  of  creative  con- 
structive intelligence  of  the  highest  order.  Many  millions  of  dol- 
lars in  substantial  property  values  have  been  added  to  the  wealth 
of  St.  Louis  by  his  projects  and  activities. 

lycwis'  editorial  opinions  on  social  and  political  topics  are  strik- 
ingly progressive,  even  radical.  He  has  advocated  in  the  Woman's 
National  Daily,  postal  bank,  parcels  post  and  other  progressive 
legislation.  He  has  been  outspoken  in  his  opposition  to  the  central- 
ization of  economic  and  financial  power  in  the  trusts.  He  has 
warmly  advocated  equal  suffrage.  He  has  es])oused  the  moral  issues 
of  temperance,  social  purity,  conservation  of  child  life,  and  other 
movements  with  which  tlie  activities  of  women  are  most  closely  as- 
sociated. Wliile  nominally  a  Republican  in  political  affiliation, 
Lewis'  views  are  colored  by  a  personality  which  is  essentially  demo- 
cratic in  the  broadest  meaning  of  that  term.  A  radical,  an  active 
innovator,  a  democrat  of  the  democrats,  the  whole  tendency  of  his 
life  is  liberal  and  progressive.  His  work  has  been,  and  necessarily 
is,  antagonistic  to  the  principles  of  conservation  of  vested  interests 
for  which  the  Republican  party  in  America  now  stands. 

There  is  something  about  this  case  which  makes  the  blood  boil, 
the  nerves  tingle  and  the  arm  instinctively  stretch  itself  as  if  grop- 
ing for  some  sort  of  weapon.  One  finds  his  thoughts  turning  nptm 
such  topics  as  the  rise  of  Protestantism,  and  the  English,  French 
and  American  revolutions.  One  thinks  of  I-uther,  of  Cromwell,  of 
Patrick  Henry,  of  the  Adamses,  men  who  raised  single  voices  of 
protest  in  defiance  of  those  who  assumed  to  dominate  and  rule  over 
them.  The  terrible  fascination  which  the  power  to  destroy  appears 
to  exert  in  the  minds  of  underlings  clothed  with  a  little  brief  author- 
ity, recalls  the  atrocities  of  the  Inquisition  and  the  torments  of  the 
medieval  torturers.  The  purpose  of  this  volume  is  to  suggest  that 
the  timely  use  of  ballots  today  may  prevent  the  untimely  resort  to 
bullets  tomorrow.  The  abuse  of  administrative  ]iower  is  the  death 
of  democracy.  It  should  be  fought  to  the  death  u])on  its  every 
manifestation. 

Sidney    Morse. 

Universitv  Citv,  Mav  15,  1912. 


CONTENTS. 

PAGE 

Introduction    21 

CHAPTER  I 
A  City  That  Is  Set  Upon  a  Hill 43 

CHAPTER  II 
TniAL  BY  Newspaper 52 

CHAPTER  III 
The  Making  of  a  Great  Mail  Order  Man 86 

CHAPTER  IV 

The  Founding  of  The  Winner 109 

CHAPTER  V 

The  Reforms  cf  General  Madden 136 

CHAPTER  VI 
Lewis  Slips  into  the  Cogs 153 

CHAPTER  VII 

The  Rise  of  The  Winner 176 

CHAPTER   VIII 
Invention   and   Promotion 187 

CHAPTER  IX 
The  Founding  of  University  City 211 

CHAPTER  X 
World's  Fair  Days 227 

CHAPTER  XI 

Is  Credit  a  Discredit? 255 

CHAPTER  XII 

The  Rise  of  The  Woman's  Magazine 268 

CHAPTER   XIII 
Banking  by  Mail 295 

CHAPTER   XIV 
The    Post-Dispatch    Extra 322 

CHAPTER    XV 

Investk^ation   by  Yellow   Journalism 314 


PAGE 

CHAPTER  XVI 

Is  Roosevelt  Responsible? 364 

CHAPTER  XVII 
The  New  Federal  Bank  Examiners 385 

CHAPTER  XVIII 

The   Inspectors'   Report 412 

CHAPTER   XIX 
Order   Number  Ten 433 

CHAPTER    XX 

Concerted    Action 452 

CHAPTER   XXI 
Home  Rule  vs.  Federal  Usurpation 466 

CHAPTER   XXII 
The  Three  Options 509 

CHAPTER  XXIII 
The  Attack  on  The  Woman's  Magazine 539 

CHAPTER  XXIV 
The  Defense  of  The  Woman's  Magazine 571 

CHAPTER   XXV 
Cortelyou  Shows  His  Hand 601 

CHAPTER  XXVI 

The  Great  American  Fraud  Order 630 

CHAPTER  XXVII 
Plot    and    Counter-plot 657 

CHAPTER  XXVIII 
The   Double  Vindication 700 

CHAPTER  XXIX 
Delenda  Est  Carthago 735 


xii 


INTRODUCTION. 

The  Question  of  Temperament — The  Question  of  Motive — The 
Men  and  Their  Motives — The  Kansas-Bristow-Anti-Dice 
Theory — The  Platt-Cortelyou  Theory — The  Dreyfus 
Case  of  America. 

The  spirit  of  despotism  at  war  with  the  spirit  of  democracy;  the 
East  in  conflict  with  the  West;  George  Bruce  Cortelyou  of  New  York 
matched  against  Edward  Gardner  Lewis  of  St.  Louis:  this,  in  sum,  is 
the  theme  of  The  Sikoe  of  University  City.  The  plot  embraces  a 
multitude  of  men  and  events.  But  the  main  action  turns  on  the  strug- 
gle of  two  human  wills  pitted,  like  a  pair  of  gamecocks,  in  deadly 
combat.  The  issue  may  be  narrowed  to  a  question  of  opposing  tem- 
peraments. These  two  men  and  their  respective  followers  were  mu- 
tually antagonistic.  Each  instinctively  breathes  the  spirit  and  as- 
sumes the  mental  attitude  of  one  of  the  two  basic  factions  into  which 
America  (like  all  democracies)  tends  to  fall,  and  the  dissensions  of 
which,  like  the  mutual  enmities  of  summer  clouds,  menace  the  Re- 
public with  the  lightnings  of  civil  strife.  Cortelj'ou,  the  aristocrat, 
typifies  autocracy, — the  rule  of  one  man  over  his  fellows.  Lewis,  the 
democrat,  typifies  individualism  and  local  autoyiomy, — self-govern- 
ment, equal  opportunity  for  the  many. 

Came  a  day  when  their  opposing  interests  impinged.  Followed  a 
clash  of  their  wills  like  steel  on  flint,  a  mutual  challenge,  an  open 
war.  Each  was  the  responsible  head  and  leader  of  a  nation-wide  fol- 
lowing. Cortelyou  led  the  organized  forces  of  the  existing  order. 
LeAvis  voiced  the  popular,  but  unorganized,  demand  for  change. 
Neither  would  admit  defeat.  They  fought  on,  unmindful  of  con- 
sequences. Battling  over  a  national  arena,  not  only  did  they  involve 
their  own  followers.  Many  of  the  people  themselves  took  sides  and 
enlisted  in  the  fray.  Thus  came  about  an  incipient  insurrection, 
a  spectacle  of  national,  even  of  historic  moment. 

Seen  in  this  light,  The  Siege  of  University  City  is  more  than  a 
mere  biography.  This  tragic  story  of  a  remarkable  life,  is  typical  of 
a  phase  of  civilization  in  America  of  deep  and  abiding  interest. 
Nay  more.  It  is  an  episode  of  no  mean  significance  in  the  age- 
long strife  for  human  freedom.  Once  the  reader's  mind  is  attuned 
to  this  dominant  note,  insurrection  against  autocracy,  this  whole  his- 
tory falls  into  complete  harmony.  Let  us  strive  throughout  the 
din  of  charge  and  counter-charge  which  follows,  to  keep  uppermost 
in  mind  the  pitch  of  this  clear  bugle  call. 

I  remember  one  summer  afternoon  in  boyhood,  taking  a  short  cut 
across  the  hayfield   after  pitching  a   load   of  hay,   to   find  a   few 

21 


22  THE  SIEGE  OF  UNIVERSITY  CITY 

moments  of  coolness  and  comfort  in  my  grandfather's  shady  sitting 
room,  overlooking  my  grandmother's  old-fashioned  New  England 
garden.  I  recall  the  incident  plainly,  after  the  lapse  of  years,  for  I 
then  chanced  on  a  copy  of  "Robert  Elsmere."  The  opening  words 
of  that  enchanting  story  are  still  blended  in  my  mind  with  the  peace- 
fid  atmosphere  of  that  homely  scene,  redolent  of  summer  odors,  and 
vibrant  with  the  droning  of  bees,  and  the  creaking  of  the  farm 
wagon  under  its  to2:)-heavy  load  of  hay. 

Much  depends  on  one's  introduction  to  an  author.  In  some  part, 
this  summer  scene  may  account  for  my  growing  liking  for  the 
writings  of  Mrs.  Humphry  Ward.  I  procured  them  one  by  one 
from  the  gray  stone  village  library,  and  pored  over  them  with  ever 
increasing  interest.  But  in  large  part  my  liking  is  explained  by  the 
insight  of  a  kindly  critic,  who  drew  my  attention  to  the  fact  that 
Ihey  were  all  primarily  "studies  in  temperament." 

My  grandfather,  a  devout  believer  in  Universalism,  had  procured 
this  copy  of  "Robert  Elsmere"  under  the  impression  that  it  con- 
tained a  semi-historical  account  of  the  movement  towards  Liberalism 
tending  towards  the  overthrow  of  orthodox  religion.  A  closer  view 
shows  that  the  writer's  theme  is  the  effect,  on  a  man  of  emotional 
temperament,  of  the  shattering  of  the  ideals  and  symbols  of  a  devout 
soul,  and  the  change  wrought  in  a  whole  life  by  the  wrench  in 
passing  from  the  ritual  of  the  Church  of  England  to  the  atmosphere 
of  another  and  an  alien  religion.  The  art  of  the  writer  attaches 
the  readers'  sympathies  so  warmly  to  the  personality  of  Elsmere  as 
almost  to  sweep  one,  by  force  of  emotion,  to  a  like  conclusion.  But 
the  main  object  really  appears  to  be  other  than  this.  In  its  true 
light  the  story  is  seen  to  be  a  consummate  protrayal  of  a  special 
temperament,  reacting  under  prescribed  conditions. 

The  task  of  writing  The  Siege  of  University  City  has  been 
like  finding  one's  way  to  the  heart  of  a  bewildering  labyrinth.  I 
have  groped  for  months  in  the  mazes  of  this  story.  I  have  brooded 
over  many  assertions  and  denials.  But  I  have  come  upon  no  other 
clue  leading  to  the  centre  of  this  much  vexed  controversy,  than  this 
thread  of  temperament  that  runs  throughout  the  conduct  of  human 
life.  Let  me  then  set  it  down  at  the  outset  as  my  belief  that  the 
differences  of  opinion  and  conduct,  clashing  at  daggers  drawn 
throughout  this  tragic  drama,  have  arisen  mainly  from  inherent  dif- 
ferences of  temperament  between  the  principal  actors,  Cortclyou 
(with  his  aids)  and  Lewis.  The  other  figures  on  the  crowded  stage 
have  been  mere  puppets  caught  uj)  and  whirled  into  action,  by  social, 
economic  and  political  influences  such  as  determine  the  destinies  of 
every  age,  all  the  more  certainly  because  most  men  are  unconscious 
of  being  thus  borne  along. 

Simply  stated,  I  mean  this:  A  cabinet  officer  of  a  Republican 
£dministration  of  the  United  States  of  America  in  the  year  of  grace 
3905,  appointed  from  a  metropolis  by  approval  of  the  president 
of  a  great  monopoly,  is  sure  to  be  a  man  of  extreme  conservative 


THE  DREYFUS  CASE  OF  AMERICA  23 

character.  The  editor  and  publisher  of  a  Western  mail  order 
magazine  circulating  in  rural  districts,  originator  and  promoter  of  a 
popular  mail  order  bank,  and  many  similar  enterprises,  is  equally 
sure  to  be  of  opposite  temi^eramental  characteristics.  No  man  lives 
to  himself  alone.  The  cabinet  officer  will  be  cautious  and  regular, 
actuated  by  the  habits  and  impulses  of  his  kind.  The  youthful 
editor  and  promoter  will  be  daring  and  novel.  The  inevitable  result 
of  any  opposition  of  their  interests  is  apparent:  a  conflict  of  their 
wills,  not  simply  as  individuals,  but  as  champions  of  great  opposing 
forces.  If  the  under  currents  involved  are  national  in  scope,  and 
permanent  in  tendency,  and  the  champions  men  of  might  and  keen 
wit,  the  battle  may  well  be  of  Homeric  proportions. 

THE    PHILOSOPHY    OF    THE    SIEGE. 

Look  for  a  moment  at  the  stage  setting  of  this  drama.  We  are 
in  a  piece  of  wild  cow  pasture,  just  outside  St.  Louis.  Here  Lewis 
has  built  him  up  a  city,  University  City,  and  established  a  large 
model  printing  press  for  his  rural  magazine.  He  has  surrounded 
himself  with  gardens.  He  has  erected  a  great  Egyptian  Temple.  In 
this  he  has  placed  the  great  press  of  the  Woman's  National  Daily. 

It  is  Lewis'  proud  boast  that  the  only  daily  newspaper  for  women 
is  printed  on  the  greatest  press  in  the  world.  It  is  a  big  saying, 
characteristic  of  the  man.  Equally  characteristic  is  the  fact  that  it 
is  true.  Lewis  bought  out  the  only  rival  newspaper  for  women  then 
published  in  Chicago.  And  he  specially  stipulated  in  his  contract 
with  the  Goss  Printing  Press  Company  that  "The  Lewis"  should  be 
the  largest  and  finest  piece  of  printing  machinery  on  earth. 

The  building  in  which  this  great  press  is  installed  was  originally 
designed  by  Lewis  for  his  mail  bank.  It  was  characteristically  un- 
like any  other  bank  building  in  the  world.  Instead  of  the  bank  it 
received  the  printing  press.  Since  that  day  the  doors  have  stood 
wide  open.  Crowds  of  visitors  of  all  sorts  and  conditions  of  men, 
and  especially  women,  have  thronged  the  lofty  sk3^]ighted  hypostyle 
hall  where  typical  phases  of  Occidental  and  Oriental  thought  con- 
front one  another  in  bewildering  contrast.  The  visitor's  sense  of 
strange  amazement  is  soon  lost  in  sheer  wonder  at  what  many  would 
regard  as  not  only  the  greatest  press,  but  the  greatest  pulpit  of  the 
age.  For,  from  this  centre  went  out  the  words  of  fire  and  of  inspira- 
tion that  have  stirred  a  million  homes. 

What  were  the  thoughts  suggested  to  these  different  persons  ?  The 
spectacle  is  inspiring.  A  half  score  broad  ribbons  of  white  paper 
stream  into  the  monster's  maw,  to  be  almost  immediately  vomited 
forth  tidily  trimmed,  folded  and  printed  papers.  On  the  morrow 
these  papers,  freighted  with  the  latest  news  and  opinions,  and  in- 
stinct with  fiery  messages,  are  to  be  presented  by  rural  carrier.s 
throughout  the  United  States  to  half  a  million  homes. 

Each  bystander  must  react  on  this  scene  according  to  his  experi- 
ence.    A  child  responds  only  to  the  bulk  and  roar  of  the  monster 


24  THE  SIEGE  OF  UNIVERSITY  CITY 

as  a  thing  of  terror  or  of  fascination.  A  subscriber  to  tlie  Woman'j 
National  Daily  quickens  with  new  interest  at  seeing  the  actual  mak- 
ing of  a  paper  that  has  grown  to  be  a  portion  of  her  daily  life.  A 
stockholder  tends  to  calculate  on  dividends.  A  student  of  social 
affairs  ponders  its  editorial  tendencies  and  influences.  Onl}"^  a  prac- 
tical newspaper  man  or  j)ublisher  assumes  the  owner's  standpoint, 
and  forms  a  complete  picture  of  the  soul  that  centres  in  this  machine. 

He  alone  sees  in  imagination  the  lumbermen  hewing  timber  in  the 
Northern  forest ;  the  logs  floating  downstream  to  the  mill ;  the  wood 
being  ground  into  pulp,  the  raw  material  of  paper;  the  ground 
pulp  taking  its  tortuous  way  among  the  vats  and  emerging  into  long 
sheets  of  paper  threaded  over  the  hot  rollers  of  the  intricate  paper 
machine;  the  freighting  and  drayage  of  paper  rolls,  witli  the  inci- 
dents of  delay  from  strikes  and  untoward  climatic  conditions ;  the 
news-gathering  by  wire  and  cable;  the  work  of  copying  and  type- 
writing, putting  into  literary  shape,  and  all  the  minutiae  of  editorial 
supervision ;  the  mechanical  details  of  composition  in  type ;  the  stereo- 
typing, and  the  making  ready;  the  printing,  mailing  and  distribu- 
tion, including  the  work  of  the  army  of  canvassers  and  other  agen- 
cies of  subscription;  the  advertisements,  their  solicitation,  arrange- 
ment; and  the  whole  office  machinery  of  receipt  and  of  payment. 
All,  or  most  of  these,  are  outside  the  experience  of  the  casual  ob- 
server. Only  the  publisher,  the  editor,  the  statesman,  and  the 
student  of  social  history  together,  can  adequately  discern  and  appre- 
ciate the  influence  of  such  a  mechanism  upon  the  progress  of  human 
civilization.  Yet  all  this  and  more  is  embraced  in  the  vision  of  the 
press.  Such  is  the  purpose  confided  to  its  mighty  mechanism.  With- 
out the  press  the  realization  of  this  vision  of  united  energies  and 
the  achievement  of  its  purpose,  the  distribution  of  popular  education 
and  enlightenment,  would  be  impossible. 

Whence  came  the  press?  Who  made  possible  its  manifold  benefi- 
cence.^ Not  the  inky  printer's  devil;  not  tlie  printers,  nor  the  feed- 
ers, nor  even  the  chief  pressman.  Their  knowledge  is  limited  to  its 
manipulation.  A  serious  breakdown  demands  the  attention  of  the 
master  mechanic,  the  press  builder,  who  comprehends  the  intricate 
structure  in  its  entirety.  But  the  builder  of  the  press  is  not  in 
reality  its  maker.  Its  true  origin  must  be  sought  elsewhere.  Some 
one,  before  the  press  was,  or  could  be,  contemplating  its  whole 
vision  and  comprehending  fully  its  intended  purpose,  had  first  to 
bring  it  into  existence  out  of  the  realm  of  thought. 

The  inventor  first  gave  being  to  the  great  machine.  Brooding 
over  the  chaos  of  possibilities,  like  the  spirit  of  creation  at  the 
dawn  of  Genesis,  witli  closed  eyes  and  idle  fingers,  he  created  the 
press  out  of  pure  mind  stuff"  in  the  workshop  of  his  imagination. 
Here  he  first  reared  the  needful  framework,  and  attributed  to  it 
the  required  rigidity.  Thus  he  fashioned  platen  and  roller,  shaft 
and  gear,  feeding,  printing,  cutting  and  trimming  apparatus,  until 
the  whole  seemed  complete  and  capable  of  executing  its  confided 


THE  DREYFUS  CASE  OF  AMERICA  25 

purpose.  Finally,  still  in  thought,  the  inventor  applied  the  neces- 
sary power;  and  experienced  the  creative  joy  of  witnessing  in  the 
pure  ideal  the  operation  of  the  perfected  mechanism.  Every  device 
that  has  come  to  bless  or  ban  mankind  has  been  thus  first  built  in  the 
imagination  of  some  man,  apart  from  the  concrete  materials  of  its 
construction. 

The  world  has  ever  been,  and  ever  will  be,  indebted  primarily 
for  the  blessings  attendant  upon  progress,  to  those  few  gifted 
individuals  who  possess  this  order  of  creative  imaginative  intelli- 
gence. All  recognize  the  inventor  and  first  maker  of  the  great 
Goss  printing  press  as  a  benefactor  to  the  race.  How  much  more 
are  we  forced  to  yield  admiration  to  the  superior  intelligence  which 
accepts  so  vast  a  completed  mechanism  from  the  inventor's  hand 
as  but  a  minor,  though  essential  factor  in  the  achievement  of  his 
far  larger  purpose. 

That  Edward  Gardner  Lewis  is  a  man  generously  endowed  by 
nature  with  this  rare  gift,  a  high  order  of  creative  constructive 
intelligence,  I  think  no  one  who  knows  him,  or  knows  the  product 
of  his  life,  will  question.  To  the  correlative  endowment  of  such 
an  imagination,  namely,  a  temperament  sanguine,  buoyant,  opti- 
mistic, I  desire  to  draw  attention.  For  without  proper  allowance 
for  this,  no  such  man's  conduct  is  comprehensible.  Lewis'  crea- 
tive gifts  and  his  optimistic  temper  are  inseparable.  They  are  like 
substance  and  shadow.  His  imagination  teems  with  creative  visions. 
His  temperament  admits  of  no  misgivings  as  to  their  practical  real- 
ization. 

An  imagination  like  that  of  Lewis'  embraces  a  press,  a  city,  a 
nation,  the  whole  world.  It  thinks  in  periods  of  time  past,  present, 
and  to  come.  It  grasps  a  tool,  a  trade,  a  whole  industry,  or  a 
score  of  industries,  with  equal  facility  and  versatility.  His  mental 
workshop  is  adequate  to  any  undertaking.  INIind  stuff  is  plentiful. 
Potential  energy  is  unlimited.  All  is  in  readiness  for  any  emprise. 
And  the  atmosphere  in  which  these  imaginations  gloAV  is  that  of 
perennial  summer  bathed  in  perpetiial  sunshine. 

Turning,  by  way  of  contrast,  to  the  opposite  extreme  of  tempera- 
ment, one  is  reminded  of  the  ancient  poet  who  depicted  the  Adver- 
sary as  going  up  and  down  the  world  among  the  sons  of  men,  and 
appearing  before  the  Lord  to  point  out  their  short-comings  and  ask 
leave  to  test  their  sincerity  and  truth.  Lest  I  be  supposed  to  dis- 
tort the  meaning  of  this  passage,  I  quote  here  a  paragraph  from 
the  introduction  to  the  book  of  Job  in  the  well  known  Modern 
Reader's  Bible,  the  application  of  which  will  be  seen  later  in  our 
story : 

"The  sons  of  God  pass  in  review  before  the  throne,  and  are  ques- 
tioned as  to  the  provinces  of  the  universe  which  they  have  in 
charge.  Among  them  comes  'the  Satan.'  INIost  unfortunately,  the 
omission  in  English  versions  of  the  article  has  led  the  popular  mind 
astray  on  this  incident.     Unquestionably  the  word  is  the  title  of 


26  THE  SIEGE  OF  UNIVERSITY  CITY 

an  office,  not  the  nnme  of  an  individual.  The  margin  of  the  Re- 
vised Version  gives  'the  Adversary.'  The  word  expresses  that  he 
is  the  adversary  of  the  saints  in  the  same  way  that  an  inspector 
or  examiner  may  be  considered  as  adverse  to  those  he  inspects  or 
examines.  It  is  easy  to  understand  how  such  a  title  should  pass 
over  to  form  the  name  of  an  individual — the  Adversary'  of  God, 
Satan,  the  Prince  of  Evil.  *  *  *  Those  who  come  to  this  work 
with  the  association  of  the  other  'Satan'  not  entirely  dismissed,  see 
in  the  attitude  of  the  Adversary  personal  malignity.  I  can  not.  No 
one  would  see  a  sinister  motive  in  a  scientific  experimenter,  who 
revised  his  plans  becaxise  his  experiment  was  shown  to  be  one 
degree  short  of  being  exhaustive." 

Students  of  comparative  literature  will  note  the  similarity  be- 
tween the  function  here  attributed  to  the  Adversary  and  that  as- 
signed by  Goethe  to  the  Mephistopheles  in  Faust.  The  Adversary, 
the  inquisitor,  the  prosecutor,  the  sheriff,  even  the  hangman,  or 
other  executioner,  have  their  undoubted  place  in  the  great  social 
manifold.  Each  in  proportion  to  the  sincerity  and  efficiency  of  his 
services,  is  entitled  to  the  respect  and  appreciation  of  mankind. 
But  such  avocations  implj^  what  may  be  called  the  inquisitorial 
temperament,  a  mental  habit  diametrically  opposed  to  that  which 
accompanies  the  labors  of  constructive  idealism. 

The  inventor  who,  with  boundless  optimism,  has  created  in  the 
sunny  chambers  of  his  imagination  a  device  that  the  world  will 
not  willingly  let  die,  occupies  the  antipodes  of  thought  from  the 
capitalist  to  whom  he  may  appeal  for  financial  assistance ;  or  from 
that  of  the  inspecting  engineer  who  ruthlessly  applies  every  known 
stress  to  test  the  practicality  of  the  mechanical  model.  An  inven- 
tion may  be  sound;  a  model,  unsound.  Thus  will  come  about  con- 
troversy and  disagreement.  A  later  model  which  more  truthfully 
externalizes  the  inventor's  ideal,  may  command  the  unhesitating 
approval  of  both  capitalist  and  engineer;  and  may  win  the  plaudits 
of  an   admiring  world. 

Not  infrequently  the  inventor's  original  conception,  while  ideally 
perfect,  can  not  be  made  to  work  at  all  in  available  materials  of 
construction.  The  inventor  in  such  cases  is  ideally  right,  but 
practically  wrong.  He  then  requires  the  co-operation  of  practical 
mechanicians  to  modify  or  adapt  his  ideal  to  the  needs  of  reality. 
Many  of  the  noblest  dreams  of  the  greatest  constructive  imagina- 
tions of  all  ages  have  failed,  or  been  retarded  in  realization,  for 
the  want  of  such  sympathetic  practical  co-operation. 

The  mind  of  Lewis  produced  in  the  realm  of  the  pure  ideal  dur- 
ing the  period  of  this  story,  conceptions  of  periodicals,  banks,  uni- 
versities, homes,  cities,  and  their  every  appurtenance,  in  a  kind  of 
ecstatic  exaltation  that  was  almost  without  conscious  effort.  His 
problem  was  to  externalize  them  rapidlj'  enough  to  make  way  for 
new  conceptions  crowding  thickly  upon  their  heels.  Money  was 
required.      But  each   of   these   undertakings   would   represent  vast 


THE  DREYFUS  CASE  OF  AMERICA  27 

increments  of  value.  Lewis  proposed  that  those  who  would  furnish 
the  wherewithal  to  externalize  his  conceptions  should  share  freely 
in  the  resulting  gains.  Why  not.^  The  workshop  whence  came 
these  creative  visions  was  still  available;  rich,  as  far  as  he  could 
see,  with  an  opulence  beyond  all  possible  demand. 

The  conceptions  of  Lewis  were  desirable;  so  desirable,  indeed, 
that  thousands  of  people  became  enthusiastic  to  see  them  carried 
out.  He  set  to  work  to  put  his  ideals  in  practice,  and  on  the  largest 
scale.  The  ideas  he  conceived  were  vividly  expressed  on  paper. 
Plans  and  models  followed ;  these  were  no  sooner  seen  than  admired. 
That  they  did  not  always  work  as  he  intended  without  adaptation 
is  an  experience  common  to  every  inventor  and  creator.  Time  and 
continued  adaptation  to  practical  detail  were  needed.  Premature 
interruption  meant  death. 

Now  the  test  of  the  inventor  is  his  model.  Does  it  work?  Here 
is  the  great  question  of  the  capitalist  and  the  engineer.  By  their 
very  temperament  these  men  are  constrained  to  suppose  that  pos- 
sibly it  will  not  work.  Their  business,  before  approving  any  new 
contrivance,  is  to  disclose  faults  of  construction  that  might  develop 
under  workaday  conditions.  Many  an  inventor  has  besieged  the 
doors  of  capital  for  a  life  time,  and  in  the  end  carried  his  cherished 
invention  unrealized  to  the  grave. 

Lewis  applied  his  inventive  mind  to  this  problem  of  securing 
adequate  capital,  and  took  a  short  cut  to  obtain  it.  After  working 
for  a  time  with  a  small  group  of  capitalists,  he  turned  from  them 
and  took  the  whole  world  into  his  confidence.  He  appealed  to  the 
masses.  They  understood  him.  They  sympathized  with  his  views. 
More,  they  assisted  in  the  realization  of  his  visions.  They  provided 
the  needed  capital;  and  awaited  the  results. 

That  is  to  say,  many  persons  of  like  buoyant  temperament 
among  the  masses  co-operated  with  him.  Not  all.  Those  of  the 
opposite,  the  inquisitorial  temperament,  did  not  approve.  Being 
themselves  denied  the  rich  gifts  of  creative  imagination  and  opti- 
mistic hopefulness,  they  honestly  did  not  believe  his  brilliant 
schemes  were  feasible.  Moreover,  there  was  wanting  the  one  test, 
that  of  practical  experience.  The  like  had  not  been  done  before. 
All  such  conservative  individuals  drew  the  attention  of  others  like- 
minded  with  themselves^  and,  especially  those  in  higher  positions  of 
authority,  to  the  nature  of  Lewis'  undertakings.  Professional  in- 
quisitors were  soon  employed.  Duty,  as  these  men  conceived  it, 
required  them  to  demand  for  every  new  device,  whether  social  or 
mechanical,  a  complete  working  model  that  could  withstand  every 
conceivable  test  and  strain.  And  they  required  the  suspension  of 
all  financial  activity  until  such  model  had  been  subjected  to  satis- 
factory trial. 

There,  I  think,  you  have  the  crux  of  the  whole  Lewis  controversy 
in  a  nutshell.  Lewis  boldly  announced  that  the  Woman's  Magazine 
and  the  Woman's  National  Daily    were    destined    to    become  the 


28  THE  SIEGE  OF  UNIVERSITY  CITY 

greatest  periodicals  in  the  world.  He  predicted  that  the  People's 
Postal  Bank  would  be  one  of  the  greatest  financial  powers  in  the 
Nation.  University  City  was  to  be  the  most  beautiful  of  munici- 
palities. The  American  Woman's  League,  and  the  People's  Uni- 
versity, were  projected  by  him  as  well  within  the  possibilities  of 
rajDid  and  complete  realization.  Persons  gifted  with  creative  imagi- 
nation and  its  accompanying  optimism  tend  to  be  readily  persuaded 
that  Lewis  was  not  only  thoroughly  sincere  in  these  beliefs,  but 
that  he  may  have  been  justified  in  his  opinions.  Persons  of  the 
inquisitorial  type  of  mind  look  about  in  vain  for  working  models 
of  any  such  social,  commercial  and  economic  machinery.  Lacking 
what  they  deem  the  one  sure  test  of  practical  experience,  their 
minds  instinctively  repudiate  Lewis's  pretensions  and  stigmatize 
them  as  the  consciously  fraudulent  mouthings  of  a  despicable 
charlatan.  It  is  but  one  step  in  the  thought  of  such  persons  from 
this  position  to  the  conclusion  that  it  is  their  bounden  duty  to 
protect  their  more  visionary  brothers  and  sisters  from  the  financial 
sacrifices  of  over-optimism.  Such  a  belief,  if  sincere,  demands 
action,  and  instant  action.  Soon  after  this,  the  whole  inquisitorial 
machinery  is  in  full  swing.  The  ill-starred  promoter  of  ideals 
is   doomed. 

The  saddest  thing  about  this  case  is  the  apparent  absence  of  any 
intelligent  co-operation  on  the  part  of  those  highest  in  authority; 
of  any  wise  discrimination  and  aid  which  might  have  suggested 
how  the  new  social  and  economic  machinery  devised  by  Lewis 
could  have  been  carefully  modified  and  adapted  to  existing  condi- 
tions and  so  brought  to  final  success. 

THE    QUESTION    OF    MOTIVE. 

Closely  allied  to  the  question  of  temperament  is  that  of  motive. 
What  motives  actuated  Lewis  and  his  associates  in  building  up  his 
enormous  enterprises?  What  motives  impelled  the  men  who  brought 
about  the  catastrophe,  and  from  a  state  of  picturesque  beauty,  and 
busy  profitable  industry,  laid  University  City  in  a  state  of  siege.'* 

Every  year  of  psychological  study  adds  something  to  our  knowl- 
edge of  the  inner  workings  of  the  human  mind.  We  are  beginning 
to  understand  inner  causes.  Lovers  of  Dickens  will  remember  the 
unhappy  consequences  to  Mr.  Wickfield,  in  David  Copperfield,  of 
taking  it  as  a  working  tlieory  that  every  person  is  actuated  through 
life  by  a  single  dominant  motive.  The  action  of  the  mind  far 
more  resembles  that  of  the  great  combination  lock  on  the  modern 
safety  vault,  than  that  of  a  single  steel  spring.  The  bolts  of  these 
locks  are  controlled  by  a  series  of  contrivances  called  tumblers.  As 
the  lock  is  manipulated,  first  one  tumbler,  then  another,  is  released 
or  engaged.  The  last  in  the  whole  series  must  be  reached  in  order, 
without  error  of  manipulation,  before  all  can  be  operated  together. 
Then  the  bars  can  be  shot  freely  to  and  fro.  A  condition  of  single 
mindedness,  that  is,  of  being  controlled  in  any  action  by  a  single 
motive,  is  extremely  rare,  if  not  absolutely  impossible.     Most  per- 


THE  DREYFUS  CASE  OF  AMERICA  29 

sons  would  be  surprised  if  they  could  become  conscious  of  the  inter- 
play of  emotions  and  impulses  in  their  own  minds.  The  last  mo- 
tive in  a  whole  series  leading  to  an  important  act  or  line  of  conduct 
is^  in  fact,  most  often  the  one  least  consciously  regarded. 

With  what  motives  did  Lewis  organize  the  Lewis  Publishing 
Company?  What  motives  led  him  to  propose  and  organize  the 
People's  Bank  ?  Why  did  he  organize  the  Development  and  Invest- 
ment Company;  or  propose  the  University  City  Improvement  Plan; 
or  start  the  American  Woman's  League,  or  any  of  his  other  enter- 
prises? The  true  answer  is  perhaps  as  deej^ly  hidden  from  the 
man  himself  as  from  the  public  at  large.  Was  it  desire  for  wealth, 
for  power?  Was  it  philanthropy?  Was  it  an  aspiration  to  exert 
his  strength  in  the  control  of  new  forces  working  to  the  advance- 
ment of  mankind?  Was  it  a  crude  effort  of  a  youthful  mind  striv- 
ing to  manipulate  levers  of  a  vast  machinery  of  organization  and 
finance,  the  proper  purposes  and  functions  of  which  he  was  unable 
fully  to  comprehend?  Or  was  it  the  sane  and  rational  activity  of 
a  master  mind,  carrying  out  the  studied  plans  of  a  foreordained 
and  competent  leader? 

Then  again,  with  what  motives  did  the  complainants  against  all 
these  institutions — the  postoffice  inspectors  and  otJier  officials  and 
inquisitors — proceed  steadily  on  lines  that  compassed  their  destruc- 
tion? What  motives  guided  the  pen  of  George  B.  Cortelyou  when, 
on  a  certain  night,  he  signed  the  Order  Number  Ten  that  wrecked 
the  People's  Bank?  What  were  the  motives  that  caused  him  to  sign 
the  letter  of  withdrawal  of  the  second  class  entry  that  suddenly 
stayed  the  entire  publication  of  the  Woman's  Magazine  and  Farm 
Journal?  Quite  possibly  the  final  impulse  of  decision  sprang  from 
motives  unconscious  and  unregarded,  motives  hidden  deeply  in  the 
roots  of  mental  habit,  motives  acquired  subconsciously  from  long 
living  in  the  environment  of  conservative  departmental  and  prac- 
tical governmental  affairs.  We  cannot  tell.  But  we  can  and  must 
surmise. 

THE   AIEN   AND  THEIR   MOTIVES. 

Now,  to  establish  a  suspicion,  or  support  an  accusation  against 
any  man,  of  a  wholly  interested  or  an  utterly  unworthy  motive, 
is  extremely  difficult.  A  man  in  front  of  a  rattlesnake,  or  at  a 
fire,  or  in  a  serious  crisis  of  government,  may  be,  and  often  is, 
unconscious  of  the  unloosing  of  the  deep  seated  springs  of  action 
within  himself,  which,  operating  through  a  long  chain  of  previous 
reasoning,  results  in  sudden  and  decisive  action. 

Manifold  are  the  screens  which  conceal  the  secrets  of  depart- 
mental action  from  the  public  gaze !  Difficult  and  dangerous  to 
impute  motives!  Yet  a  proper  judgment  as  to  the  equities  of  the 
Lewis  case  can  hardly  be  reached  without  pondering  well  the 
motives  of  several  public  functionaries. 

Postoffice  Inspectors  Dice,  McKee  and  Sullivan  in  St.  Louis,  were 
all  investors  in  Lewis  enterprises.     Travers,  chief  clerk  in  the  office 


30  THE  SIEGE  OF  UNIVERSITY  CITY 

of  Madden,  who  was  then  third  assistant  postmaster  general  at 
Washington,  contributed  shorthand  lessons  to  the  Winner  Maga- 
zine. Barrett,  assistant  attorney-general  for  the  Postoffice  Depart- 
ment, on  the  occasion  of  the  winding  up  of  Lewis'  first  great  enter- 
prise, the  Progressive  Watch  Company,  by  order  of  the  postoffice, 
accepted  from  Lewis  the  friendly  gift,  or  parting  testimonial,  of  a 
sample  gold  watch.  Shortly  after  retiring  from  tlie  Postoffice 
Department,  Barrett  was  retained  by  Lewis  as  counsel  for  the 
Controller  Company  of  America.  Later  he  also  appeared  as  coun- 
sel before  Madden  on  the  occasion  of  the  citation  of  the  Winner 
Magazine,  in  1902,  to  show  cause  why  its  second-class  entry  should 
not  be  withdrawn.  Complaints  against  the  Winner  Magazine  were 
referred  to  Inspectors  Dice,  McKee  and  Sullivan  as  part  of  their 
official  duties.  They  made  no  adverse  recommendations.  The 
hearing  on  the  Winner  Magazine  held  before  Madden,  with  Barrett 
as  Lewis'  attorney,  and  Travers,  Madden's  chief  clerk,  resulted  in 
no  unfavorable  action.  When,  later,  charges  were  brought  by 
other  inspectors  against  the  Woman's  Magazine,  successor  to  the 
Winner,  and  recommendations  were  then  made  that  its  second-class 
privileges  be  withdrawn.  Madden  refused  to  concur.  Nor  could 
final  action  against  the  Woman's  Magazine  be  secured  by  the  in- 
spectorial service,  until  Madden  himself  had  been  asked  to  resign 
"for  the  good  of  the  service." 

There  are  several  considerations  of  motive  here  evident.  The 
inspectors,  who  throughout  maintain  an  attitude  of  utter  distrust  of 
Lewis'  honesty,  hold  that  his  motives  in  his  relations  with  the  above 
mentioned  postoffice  officials  and  others  were  evidently  bribery  and 
corruption.  Further,  while  there  is  nothing  on  record  directly  to 
prove  that  Madden,  while  a  postoffice  official,  ever  was  in  any  way 
the  beneficiary  of  Lewis,  yet  the  inspectors  can  point  to  the 
fact  that  some  months  after  leaving  the  service.  Madden,  like  Bar- 
rett, became  an  attorney  for  Lewis  to  present  the  case  of  the 
Lewis  Publishing  Company  before  the  United  States  Court  of 
Claims.  The  inspectors  hold  that  this  proves  that  IMaddcn  had  been 
an  obstructionist  to  public  policy  in  the  Department  over  the  Lewis 
case,  from  interested  and  unworthy  motives.  Their  attitude  towards 
Madden  points  to  suspicion  on  their  part,  that  he,  like  Barrett  and 
Travers,  may  have  received,  in  some  manner  undisclosed,-  benefits 
at  the  hands  of  Lewis.  Money  was  plentiful.  Lewis  distributed 
favors  widely.  The  motives  of  bribe-giver  and  bribe-taker  are 
freeh'  attributed  to  him  and  to  all  officials  of  the  Postoffice  Depart- 
ment who  have  in  any  way  shown  him  leniency  or  favor. 

If  the  motives  of  Lewis  himself  are  difficult  to  see;  if  the  mo- 
tives of  the  members  of  Government  and  of  the  postoffice  are  deeply 
hidden,  what  arc  we  to  say  of  the  motives  of  the  men  who  have 
stood  forward  and  ])ublicly  accused  Lewis  as  a  fraud  ? 

These  arc  principally  four:  a  man  named  Nichols,  an  old  em- 
ployee and  co-partner  of  Lewis;  William  Marion  Reedy,  the  editor 


THE  DREYFUS  CASE  OF  AMERICA  31 

of  the  St.  Louis  Mirror;  the  reporter  Betts  of  the  St.  Louis  Post- 
Dispatch,  and  a  discharged  employee,  one  I.  K.  Parshall,  who  turned 
informer.  To  the  writings  of  these  men  we  can  trace  definitely  a 
chain  of  events  which  led  to  this  tragic  downfall  of  a  popular  ideal. 

The  first  definite  attack  of  any  kind  upon  the  People's  Bank 
appeared  in  the  Mirror.  This  is  a  St.  Louis  weekly  literary  jour- 
nal, of  local  circulation,  sometimes  supposed  to  be  subsidized,  or  at 
least  aided  by  what  is  locally  known  as  the  "Big  Cinch,"  a  loosely 
defined  group  of  St.  Louis  monopolists.  However  this  may  be, 
some  articles  certainly  appeared  on  the  subject  of  the  People's 
Bank,  in  the  Mirror,  written  and  signed  by  Reedy.  The  bank  was 
characterized  outright  as  a  fraudulent  scheme.  This  caused  com- 
ment; but  perhaps  not  more  than  such  an  article  would  cause  in 
an  adverse  strain  in  a  similar  paper  on  any  new  financial  enter- 
prise. Often  the  tone  of  such  articles  changes  when  the  new  con- 
cern begins  to  advertise.  But  in  this  case  dire  results  followed, 
because  of  what  happened  afterwards.  The  first  of  the  articles 
was  clipped  from  the  Mirror  by  Howard  E.  Nichols,  with  a  definite 
and  well  considered  purpose.  Nichols  had  been  formerly  associated 
with  Lewis,  as  secretary  and  treasurer  of  the  Mail  Order  Publish- 
ing Company,  publishers  of  the  Winner,  and  had  left  suddenly 
under  circumstances  to  be  hereafter  narrated.  The  clijDping  was 
placed  in  an  envelope,  accompanied  with  an  abject  letter  of  con- 
fession of  trickery  on  his  own  part  by  Nichols,  and  with  a  scurrilous 
accusation  against  Lewis  as  an  accomplice  and  a  fraud.  It  was 
directed  to  the  one  man  who  could  be  supposed  to  act  quickly  and 
decisively,  namely,  William  Loeb,  Jr.,  private  secretary  to  President 
Roosevelt.  Loeb,  presumably,  did  not  know  anything  of  the  mat- 
ter, but  sent  it,  with  all  the  weight  of  his  authority,  to  the  right 
quarter  for  dealing  with  such  an  accusation,  namely,  the  Postoffice 
Department  at  Washington.  The  governmental  machine  was  thus 
set  in  motion. 

The  letter  of  Nichols  and  the  cutting  from  the  Mirror  came 
back  from  Washington  to  the  St.  Louis  division  of  postoffice  in- 
spectors. On  the  basis  of  this  letter,  and  of  sundry  complaints,  the 
possibility  of  which  is  inherent  in  any  widespread  scheme  for  inter- 
esting the  masses,  definite  cases  were  made  up  against  the  Lewis 
enterprises.  Investigations  were  held.  Lewis  announced  his  read- 
iness to  do  whatever  was  suggested.  But  what  was  recommended  by 
Postoffice  Inspectors  Jas.  D.  Stice  and  W.  T.  Sullivan  was  that  a 
fraud  order  denying  entirely  the  use  of  the  mails  be  issued  against 
the  People's  Bank;  and  that  the  privilege  of  second-class  entry  at 
the  one  cent  a  pound  rate  (by  which  alone  cheap  magazines  can 
live)  be  withdrawn  from  both  his  popular  magazines,  the  Woman's 
Magazine  and  the  Woman's  Farm  Journal. 

If  these  suggestions  had  been  carried  out  by  the  authorities,  this 
procedure  would  at  one  stroke  have  wiped  Lewis  out  completely, 


32  THE  SIEGE  OF  UNIVERSITY  CITY 

and  would  have  inflicted  enormous  losses  on  tens  of  thousands  of 
innocent  investors. 

The  inspectors'  reports  were  given  to  the  Inspector-in-Charge, 
Robert  Fulton,  at  St.  Louis.  By  him  and  with  his  approval,  they 
were  transmitted  to  Vickery,  Chief  Postoftice  Inspector  at  Wash- 
ington. He  referred  the  case  against  the  People's  Bank  to  the 
Assistant  Attorney-General  for  the  Postoffice  Department,  Russell 
P.  Goodwin.  The  case  against  the  magazines  was  sent  to  Madden. 
This  latter  was  left  over.  But  Goodwin  recommended  to  the  Post- 
master-General, Cortelyou,  that  a  fraud  order  against  Lewis  and 
the  People's  Bank  be  at  once  issued.  We  are  now  at  the  point  of 
real  decision.  Cortelyou,  wishing  to  act  legally,  delivered  the  pa- 
pers to  Attorney-General  Moody,  for  an  opinion.  Moody  found 
the  process  legal,  and  by  his  assistant,  Hoj't,  advised  that  "upon 
the  facts  submitted"  the  proposed  fraud  order  would  have  the  due 
sanction   of  legality. 

George  B.  Cortelyou,  thereupon,  we  may  imagine,  withdrew  into 
the  private  ofiice  of  the  postmaster-general  in  the  majestic  Post- 
office  Building  in  Washington.  Having  first  secured  himself  from 
interruption  by  instructing  his  uniformed  attendant  to  deny  him 
to  all  inquirers,  he  proceeded  to  review  the  Lewis  case  "upon  the 
facts  submitted."  At  last,  taking  pen  in  hand,  he  crossed  the 
Rubicon  by  attaching  his  signature  to  the  fateful  fraud  Order 
Number  Ten.  Thus  was  Lewis'  doom  sealed.  The  People's  Bank 
was  ruined. 

In  the  meantime  the  inspectors*  report  and  recommendation  as 
to  the  withdrawal  of  the  privilege  of  second-class  entry  from  the 
Magazine  and  the  Farm  Journal,  had  been  referred  in  due  course 
to  the  bureau  of  Third  Assistant  Postmaster-General  Madden. 
There,  imder  circumstances  which  will  appear,  the  report  lay  pend- 
ing nearly  two  years.  In  February,  1907,  the  resignation  of  Mad- 
den was  demanded  "for  the  good  of  the  service."  This  left  the 
post  of  third  assistant  postmaster-general  vacant.  There  was 
then  no  special  official  left  to  decide  this  question. 

Once  more,  in  imagination,  we  may  see  Cortelyou  retire  into  his 
private  office  to  review  for  himself  this  troublesome  Lewis  case. 
Once  more  his  decision  is  adverse.  In  the  closing  hours  of  his  ad- 
ministration, he  took  the  long  debated  matter  in  hand.  Almost  as 
his  last  official  act,  he  affixed  his  signature  to  a  letter  to  the  post- 
master at  St.  Louis  commanding  the  withdrawal  of  second-class 
privilege  from  botli  the  Lewis  publications. 

Now  is  Lewis  doubly  doomed.  Nothing  but  his  own  unflinching 
spirit  and  the  loyalty  of  his  thousands  of  women  subscribers  and 
iriends  could  ever  have  given  him  the  vestige  of  a  chance.  That 
he  is  now,  despite  indictment  after  indictment  which  followed,  still 
upholding  these  same  ideals,  still  fighting,  still  issuing  his  paper,  is 
cause  for  unstinted  admiration  for  liis  pluck,  courage,  and  determi- 
nation; even  though  we  look  upon  his  life  as  a  tragedy,  and  of  the 


THE  DREYFUS  CASE  OF  AMERICA  33 

losses  of  his  thousands  of  investors  all  over  the  country  as  a  still 
deeper  tragedy. 

Nichols  is  a  halfbreed  of  Spanish  blood  of  some  natural  shrewd- 
ness and  sagacity  in  business  affairs,  who  became  dissociated  from 
Lewis  under  certain  very  suspicious  circumstances.  He  is  now  a 
seller  of  hairdye  in  St.  Louis.  Lewis  and  he  were  and  are  enemies. 
Nichols'  letter  to  Loeb  shows  plainly  enough  his  temper,  his  educa- 
tion, his  character.  It  was  written  according  to  his  own  testimony 
when  the  contrast  between  his  own  j^overty  at  Christmas  time  with 
only  twenty-five  cents  in  his  pocket,  and  Lewis'  amazing  prosperity 
was  vividly  present  to  his  imagination. 

William  ISIarion  Reedy,  editor  of  the  INIirror,  a  Avell-known  man 
about  town  in  St.  Louis,  is  a  character  fit  to  challenge  the  pen  of 
a  Dickens  or  a  Maupassant.  Reedy  may  be  aptly  hit  off  in  a  single 
phrase,  as  the  antipodes  of  a  Puritan.  His  publication  combines 
some  of  the  characteristics  of  the  notorious  Town  Topics  of  New 
York  with  others  of  Elbert  Hubbard's  Philistine.  Reedy  himself, 
while  somewhat  corpulent  in  body,  is  a  man  keen  of  mind,  light, 
witty,  apt  at  conversational  repartee,  and  versed  in  every  form  of 
shrewdness,  sensuality  and  savor.  Apparently  devoid  of  the  finer 
moral  scruples,  fixed  princij^les,  or  whole-hearted  spiritual  convic- 
tions. Reedy  is  nevertheless  a  literary  artist  of  no  mean  order.  The 
freedom  with  which  he  spices  and  garnishes  his  weekly  editorial 
diet  of  scandal  and  travesty  of  local  happenings  and  personalities, 
amuses  and  entertains  a  certain  dilettante  class  of  readers.  The 
Mirror,  like  venison  which  epicures  prefer  "high,"  that  is,  slightly 
rotten;  or  like  Camembert  cheese,  which  some  regard  as  best  when 
"soft,"  i.  e.,  meltingly  decadent;  requires  a  cultivated  taste  to 
enjoy.  Happily  its  influence  is  ordinarilj'^  confined  within  the  pale 
of  its  limited  local  circulation. 

Nichols,  whose  office  was  adjacent  to  that  of  Reedy  downtown 
in  St.  Louis  in  the  Ozark  Building,  has  testified  that  Reedy,  meet- 
ing him  in  the  hall  one  morning,  remarked  in  substance: 

"I  spent  the  day  yesterday  with  your  old  partner  Lewis.  He  has 
a  fine  home  out  there;  but  is  a  rotten  judge  of  whiskey.  He's 
getting  rich.  Do  you  think  he  can  stand  the  gaff}"  Nichols, 
averred  later  that  he  did  not  know  what  the  "gaff"  might  be;  but 
replied  that  he  "Did  not  know."  Said  Reedy,  "I  think  not;"  and 
thereupon  published  the  famous  first  of  his  attacks  against  the 
People's  Bank. 

What  was  Reedy 's  motive  in  publishing  this  article?  Was  it  to 
protect  the  people,  or  to  gratify  the  desires  of  his  subscribers  for  a 
sensation  ?  Was  it  to  satisfy  his  own  curiosity  as  to  the  result  of  the 
gaff.?  Did  he  imagine  that  this  instrument  for  landing  a  fish 
might  bring  Lewis  to  negotiate  next  week  for  a  writeup  in  the 
Mirror  of  a  different  sort? 

Reedy  remarks  in  one  of  his  articles  that  if  certain  bankers  and 
capitalists  of  St.  Louis,  naming  them,  would  assure  him  that  the 


34  THE  SIEGE  OF  UNIVERSITY  CITY 

project  of  the  People's  Bank  was  sound,  he  would  withdraw  all 
criticism  and  opposition.  Were  these  bankers  and  business  men 
interested  in  local  newspapers,  railroads,  real  estate  or  banking 
interests  that  would  be  in  any  way  seriously  aifected  by  Lewis  and 
his  bank?  Did  they  make  known  to  Reedy  that  the  People's  Bank 
was  objectionable  to  them?  Did  they  express  to  him  the  opinion 
that  Lewis  was  an  undesirable  citizen,  and  should  be  squelched? 

The  idea  that  Reedy's  true  motive  in  attacking  Lewis  was  the 
protection  of  the  investors  of  the  bank,  or  that  he  was  conscious 
of  a  sense  of  duty,  if  depicted  in  an  after-dinner  speech,  would 
simply  convulse  to  the  verge  of  hysteria  a  group  of  the  St.  Louis 
newspaper  men  and  bon  vivants  who  know  him.  It  may  be  safely 
assumed  that  Reedy  had  some  good  business  reason  for  devoting 
space  in  the  Mirror  to  tlie  People's  Bank  and  E.  G.  Lewis.  It  was 
not  simply  to  fill  up  space.  Whether  his  motives  were  those  of  the 
inuckraker,  the  blackmailer,  or  the  subsidized  press  agent  of  oppos- 
ing interests,  is  a  secret  which  may  be  known  only  to  himself.  The 
truth  is  never  likely  to  come  out. 

Postoffice  Inspectors  Stice,  Reid  and  Sullivan,  whose  names  ap- 
pear again  and  again  in  this  story,  are  men  whose  motives  are  of 
little  consequence.  They  were  mere  cogs  on  the  wheels  of  a  depart- 
mental machine,  for  the  movement  of  which  they  were  in  no  true 
sense  responsible.  They  were  told  to  investigate,  and  they  investi- 
gated. Their  business  was  to  find  out  what  was  Avrong.  They  pro- 
ceeded on  the  theory  that  if  the  Lewis  enterprises  were  honest  and 
properly  conducted  nothing  adverse  to  them  could  be  discovered, 
even  upon  the  most  rigid  investigation ;  and  that  if  not  so  conducted 
they  ought  to  suffer  the  consequences  of  exposure.  The  inspectors 
in  the  original  investigation  were  Jas.  D.  Stice  and  Col.  W.  T. 
Sullivan. 

The  character  of  Colonel  Sullivan,  now  deceased,  has  been  placed 
on  record  by  Congressman  Joshua  W.  Alexander  of  the  third  dis- 
trict of  Missouri,  an  unimpeachable  witness.  Judge  Alexander  de- 
scribes himself  as  being  a  life  long  friend  of  Colonel  Sullivan;  and 
characterizes  him  as  a  man  of  rare  probity  and  a  keen  sense  of  offi- 
cial honor.  Sullivan  may,  therefore,  be  presumed  to  have  been 
sincere  in  his  opinion  and  recommendation  as  to  the  Lewis  enter- 
prises. 

Inspector  Stice  has  told  his  own  story  and  indelibly  impressed 
his  personality  upon  the  record  of  the  Ashbrook  Hearings.  Un- 
questionably Stice  was  and  is  honest  and  conscientious  in  accord- 
ance with  his  conception  of  his  official  duty.  No  man  as  clever  as 
Robert  Fulton  would  have  admitted  to  his  confidence  unneccessarily 
a  subordinate  as  zealous  and  as  transparent  as  Jas.  L.  Stice.  Stice 
placed  himself  before  the  Congressional  inquisitors,  to  employ  his 
own  phrase,  "like  an  open  book."  The  man  unquestionably  has  at 
all  times  meant  well.  He  has  always  done  his  level  best.  But 
Stice's  limitations  are  as  apparent  as  his  virtues.     He  is  simply  a 


THE  DREYFUS  CASE  OF  AMERICA  35 

stolid  felloW;,  slow  and  plodding,  circumscribed  in  his  experience 
and  subject  to  the  envy  and  petty  jealousy  which  narrow-minded 
men  are  prone  to  feel  when  brought  into  contact  with  the  person  or 
affairs  of  those  more  largely  gifted  by  nature  and  more  prosperous 
than  themselves.  Stice,  the  lowly  postoffice  inspector,  drew  a 
stipend  hardly  larger  than  that  of  the  chief  clerks  and  stenogra- 
phers of  the  Lewis  Publishing  Company.  Yet  the  power  lay  in  him 
to  strip  from  Lewis'  face  what  he  conceived  to  be  the  mask  of  his 
pretenses,  and  prick  to  collapse  the  bubble  of  his  fortunes.  Such 
a  man  might  easily  be  puffed  up  by  this  consciousness  of  overruling 
power. 

The  practices  and  policies  of  the  Lewis  Publishing  Company,  as 
we  shall  see,  can  be  comprehended  only  by  projecting  them  against 
the  background  of  the  publishing  industry  of  America  taken  in  its 
largest  and  broadest  aspects.  Similarly,  the  People's  Bank  must  be 
seen  in  projection  against  the  background  of  the  entire  banking 
industry,  not  only  of  America,  but  of  the  whole  world.  An  Alex- 
ander Del  Mar  could  comprehend  the  People's  Bank.  James  L. 
Stice  could  not.  Stice  saw  in  the  favorable  report  of  Del  Mar  only 
another  successful  effort  on  the  part  of  Lewis  to  bribe  an  investi- 
gator and  deceive  the  public.  Even  let  the  members  of  a  con- 
gressional committee,  one  and  all,  arrive  at  a  conclusion  contrary 
to  that  of  Stice;  let  their  conclusion  be  ratified  by  the  court  of 
claims;  and  let  that  verdict  be  approved  by  the  Congress  of  the 
United  States  of  America,  and  by  overwhelming  public  opinion. 
Still,  Stice  would  doubtless  go  to  the  grave  unalterably  convinced 
of  the  propriety  of  his  conduct  and  the  rectitude  of  his  own 
conclusions. 

Nichols,  in  his  letter  to  Loeb,  confessed  to  having  fooled  the 
postoffice  inspectors.  He  also  accused  Lewis  of  guilty  knowledge 
of  his  trickery.  The  Mirror  articles  contained  insinuations  of  the 
corruption  by  Lewis  of  previous  postoffice  officials.  There  was  also 
a  challenge  to  the  newly  appointed  postoffice  inspectors  designed 
to  pique  their  'pride  and  excite  their  suspicions  and  alarm.  On 
demand  of  Inspector-in-Charge  Fulton,  Nichols  furnished  a  detailed 
statement  containing  an  alleged  biography  of  Lewis,  calculated  to 
inspire  that  official  with  mingled  feelings  of  distrust,  aversion  and 
contempt.  Later  one  I.  K.  Parshall,  recommended  by  the  local 
postal  officials  of  St.  Louis  to  Lewis  as  an  employe,  having  been 
discharged,  furnished  the  inspectors  with  an  unsigned  memoran- 
dum, alleging  improper  and  fraudulent  uses  of  the  mail  by  Lewis 
and  his  associates. 

Lewis  alleges  that  the  motive  of  Nichols  and  Parshall  in  their 
complaints  and  accusations  was  envy  and  revenge;  that  of  Reedy, 
either  blackmail  or  the  supposed  interest  of  the  monopolists  of  St. 
Louis,  of  whom  Reedy  is  alleged  to  have  been  the  tool.  The  in- 
spectors in  the  first  instance  appear  to  Lewis  to  have  been  not  un- 
naturally prejudiced  by  the  publicity  of  the  charges  against  him 


86  THE  SIEGE  OF  UNIVERSITY  CITY 

of  having  unduly  influenced  previous  postoffice  officials,  and  of  hav- 
ing conspired  to  deceive  the  Department  upon  previous  occasions. 
The  pride  of  the  inspectors,  according  to  Lewis,  was  likewise 
piqued.  The  case  seemed  conspicuous  and  important  enough,  in 
the  event  of  a  favorable  issue,  to  insure  recognition  for  them,  and 
perhaps  advancement  in  the  service.  The  inspectors,  therefore, 
themselves  deceived  by  misinformation,  are  believed  by  Lewis  to 
have  decided  the  case  in  advance;  and  thereafter  to  have  sought 
only  evidence  such  as  would  justify  their  preconceived  opinions. 

THE  KANSAS-BRISTOW  ANTI-DICE  THEORY. 

Meanwhile  a  curious  situation  revealed  itself  at  Washington. 

During  the  presidency  of  McKinley  and  the  forepart  of  that 
of  Roosevelt,  the  administration  of  the  Postoffice  Department  was 
torn  almost  asunder  by  internal  dissension  and  disorder.  The  spirit 
of  faction,  self-seeking  and  intrigue  was  rife.  The  whole  atmos- 
phere was  imbued  with  mutual  suspicion  and  distrust.  All  sorts  of 
charges  were  being  bandied  about.  These  ranged  from  inattention 
to  duty,  or  incompetency,  to  forms  of  corruption  involving  moral 
turpitude.  A  scandal  of  national  proportions  was  imminent.  Each 
official  and  employee  was  wrung  with  anxiety  to  keep  his  own  skirts 
clear  and  his  official  head  safe  upon  his  shoulders.  Innocent  and 
loyal  employees  reported  to  their  superiors,  as  in  duty  bound,  sundry 
circumstances  tending  to  cast  suspicion  upon  the  actual  wrong- 
doers. Guilty  men,  to  escape  the  consequences  of  their  misdeeds, 
sought  to  shift  back  the  burden  of  suspicion  and  responsibility  to 
their  accusers.  No  one  felt  that  he  could  trust  his  neighbor. 
Treachery  lurked  everywhere.  Not  even  the  most  loyal  and  compe- 
tent employee  could  feel  assured  of  the  loyalty  of  his  associates  or 
even  as  to  the  tenure  of  his  own  office. 

Madden,  the  third  assistant  postmaster-general,  had  under  way 
during  this  period  an  alleged  reform  of  the  division  of  second- 
class  mail  matter,  a  branch  of  the  service  wholly  witliin  his  juris- 
diction. This  reform  policy  provoked  the  publishers  affected  to 
obstructive  litigation.  Madden,  therefore,  had  frequent  need  of 
legal  counsel.  The  evidence  submitted  by  publishers  in  support 
of  their  claims  consisted  moreover  of  subscription  lists  and  orders 
far  too  bulky  to  be  conveyed  to  Washington.  !Madden,  therefore, 
required  also  expert  agents  to  examine  such  evidence  at  the  pub- 
lishers' offices,  and  report  upon  the  facts.  These  duties  would 
normally  have  fallen  to  the  bureaus  respectively  of  Assistant  Attor- 
ney-General for  the  postoffice,  R.  P.  Goodwin,  and  of  Fourth  Assist- 
ant Postmaster  General  J.  L.  Bristow,  then  in  charge  of  the  post- 
office  inspection  service.  The  success  of  the  class  of  work  which 
Madden  had  most  deeply  at  heart  would  thus  have  been  dependent 
upon  the  good  will,  loyalty  and  efficiency  of  their  co-operation. 

So  extreme,  however,  was  the  disorganization  into  which  the 
service  had  fallen,  that  Madden  was  unwilling  to  entrust  these  im- 
portant issues  to  the  handling  of  any  one  not  under  his  immediate 


THE  DREYFUS  CASE  OF  AMERICA  37 

control.  He,  therefore,  took  a  step  which  sowed  the  dragon's 
teeth  of  enmity  and  strife  by  which  his  after  years  of  service  were 
embittered.  He  formally  protested  to  Congress  that  the  services 
of  the  assistant  attorney-general  to  the  postoffice  were  not  accept- 
able, and  that  the  postoffice  inspectors  were  unreliable  and  law- 
less. He  asked  for  special  counsel  and  a  corps  of  special  agents 
amenable  to  him  alone.  Congress  granted  his  request.  Madden 
thus  exchanged,  for  the  co-operation  of  Goodwin  and  Bristow,  their 
personal  and  official  enmity. 

The  storm  cloud  of  threatened  investigation  that  had  long  been 
lowering  over  the  Postoffice  Department  broke  at  last.  Bristow 
was  made  pilot.  As  head  of  the  inspector  service  he  was  consti- 
tuted chief  inquisitor,  and  was  assigned  the  congenial  task  of  inves- 
tigating his  associates.  Bristow  and  the  inspectors  enjoyed  almost 
unlimited  command  for  months.  They  alone  had  access  to  chart 
and  compass.  They  alone  knew  whither  the  investigation  was 
tending.  They  alone  knew  how  to  shape  their  sails  to  ride  the 
fury  of  the  gale.  When  the  tempest  had  spent  its  rage,  it  was  seen 
to  have  made  shipwreck  of  many  an  erstAvhile  fair  career  and  name 
of  good  report.  Sundry  ambitions  and  reputations  were  wholly 
foundered.  Others  came  weatherbeaten  into  port.  A  few,  and 
among  them  those  of  JMadden^  snugly  rode  out  the  gale.  Bristow 
alone  had  been  able  to  spread  all  sail  to  the  breeze.  Thus  the 
storm  which  wrecked  many  of  his  rivals  literally  swept  the  ship 
of  his  own  fortune  safely  into  haven. 

No  man  can  with  propriety  investigate  himself.  Hence  Bristow's 
department  alone  escaped  the  probe.  Sundry  rumors  there  were 
that  the  chief  inquisitor  himself  had  not  previously  scrupled  to 
profit  by  some  of  the  very  irregularities  which  he  so  roundly  con- 
demned in  other  men.  But  these  were  hushed  when  it  became  ap- 
parent that  Bristow  was  basking  in  the  presidential  smile.  From 
being  the  most  obscure  chief  of  the  newest  and  least  influential 
bureau  of  the  Department,  Bristow  suddenly  became  a  leading 
power.  The  whole  inspector  service  shared  with  its  chief  the  glory 
and  prestige  of  his  spectacular  achievement.  Those  inspectors, 
especially,  who  were  most  closely  associated  with  him  and  were 
known  to  possess  his  confidence,  became,  as  it  were,  embodiments  of 
his  authority.  These  men  who  had  but  recently  held  the  whip  of 
inquisition  over  the  officers  of  a  great  department,  and  had  brought 
not  a  few  of  its  guilty  chieftains  to  their  knees,  became,  especially 
in  their  own  esteem,  personages  of  no  mean  consequence.  Mean- 
time, Bristow  had  evidently  cast  eyes  of  political  ambition  upon  his 
native  state.  Once  firmly  seated  in  the  saddle  he  deliberately  made 
use,  it  is  alleged,  of  the  postal  inspection  service  to  destroy  his 
rivals  at  home,  and  build  up  for  himself  a  stout  political  machine. 

Now,  the  St.  Louis  inspectorship-in-charge,  the  authority  of 
which  then  extended  over  Bristow's  native  Kansas,  was  at  that  time 
held  by  George  A.  Dice.     Bristow  is  alleged  to  have  coveted  this 


38  THE  SIEGE  OF  UNIVERSITY  CITY 

post  for  a  henchman  of  his  own,  Inspector  Harrison.  So  one  day 
Inspector  Paul  E.  Williams  made  his  appearance  at  Dice's  office, 
having  come  all  the  way  from  Chattanooga,  his  own  official  domicile, 
or  perchance  from  Washington,  to  St.  Louis  as  Bristow's  emissary. 
His  mission  was  to  convey  a  demand  that  Dice  withdraw  in  Har- 
rison's favor,  and  accept  a  transfer  to  some  other  city.  Any  other 
inspectorship  that  he  might  choose,  except  only  Chicago,  was 
pledged  to  Dice,  an  undertaking  which  argued  the  assurance  of 
despotic  power.  But  Dice,  being  a  native  of  Danville,  111.,  and 
known  to  Representative  Joseph  G.  Cannon,  was  not  without  politi- 
cal influence.  Dice  refused  to  go.  He  appealed  for  protection  to 
the  then  all  powerful  Speaker.  Uncle  Joe  intervened.  Bristow 
was  whipped  off  from  his  prey.  The  affront  that  his  dignity  thus 
suffered  so  angered  Bristow  that,  it  is  alleged,  he  could  never  forget 
nor  forgive.  Dice  was  then  at  an  advanced  age.  He  survived  bat 
a  few  years.  On  his  deathbed  he  was  still  haunted  by  the  enmity 
of  Bristow.  Nor  could  he  die  in  peace  until,  during  his  last  hour, 
he  had  dictated  a  statement  to  his  sons  of  the  manner  in  which 
Bristow  had  hounded  him  into  the  grave.  Thus,  the  victim  of  in- 
spectorial plottings  passed  away. 

Among  the  proteges  of  Bristow,  according  to  the  friends  of 
Dice,  was  one  Robert  M.  Fulton,  a  young  Kansan  whose  appoint- 
ment to  the  postoffice  service,  it  is  alleged,  was  irregularly  obtained, 
and  who  was,  thereafter,  advanced  by  Bristow  over  the  heads  of 
liis  associates,  and  far  beyond  the  merits  of  his  just  deserts.  Ful- 
ton, it  is  further  alleged,  was  placed  by  Bristow  under  Dice  at  St. 
Louis  to  spy  upon  him  and  secretly  report  if  grounds  for  charges 
against  him  could  be  found. 

Now  Dice  and  his  friends,  including  the  inspectors  loyal  to  him, 
and  the  postmaster  at  St.  Louis,  F.  W.  Baumhoff,  were  personally 
friendly  to  Lewis  and  his  enterprises.  They  found  no  fault  in 
him.  Indeed,  Inspectors  Dice,  J.  D.  Sullivan  and  McKee  were  all 
investors  in  the  Lewis  enterprises.  What  more  promising  clue  could 
any  investigator  ask?  Cases  against  the  Lewis  enterprises  had  been 
made  up  at  Washington  and  forwarded  to  Dice.  Investigation  by 
him  and  his  inspectors  resulted  in  no  evidence  of  misconduct  being 
found.  Then  Bristow  sent  Harrison,  who  it  will  be  remembered, 
was  to  have  succeeded  Dice,  together  with  one  Holden.  The  two 
reported  that  the  second-class  entry  of  the  Winner  Magazine 
sliould  be  withdrawn.  The  effect  of  favorable  action  by  the  third 
assistant  upon  their  recommendation  would  thus  have  been  to  dis- 
credit Dice  and  impugn  the  efficiency  of  his  administration.  Fol- 
lowed a  citation  by  Madden,  despite  his  own  suspicions  and  disap- 
proval of  the  inspectors'  service.  Barrett  appeared  as  attorney 
for  the  Winner.  The  case  was  held  up.  Months  passed.  Years 
followed.     Still  no  unfavorable  action  against  Lewis  was  taken. 

Meantime,  Barrett  accepted  a  sample  watch  from  Lewis.  The 
two  men  were  pilloried  together  in  Bristow's  great  report.     Mad- 


THE  DREYFUS  CASE  OF  AMERICA  39 

den's  Chief  Clerk,  Travers,  became  a  paid  contributor  of  shorthand 
articles  in  the  Winner.  Additional  charges  were  formulated 
against  Lewis.  Barrett,  learning  of  these  through  Travers,  warned 
Lewis,  and  advised  him  to  retain  attorneys.  Lewis  complained  to 
the  Department  of  this  warning  as  an  attempt  to  blackmail.  An 
investigation  followed.  Dice  had  meantime  died.  Fulton,  young, 
radical,  flushed  with  triumph  from  his  connection  with  the  recent 
investigation  at  Washington,  in  full  assurance  of  the  confidence  and 
if  need  were,  the  support  of  his  all  powerful  chief,  was  promoted 
to  the  vacant  place.  From  Dice  he  inherited  the  legacy  of  these 
various  complaints  and  charges  that  had  been  accumulated  against 
Lewis  as  a  basis,  according  to  the  friends  of  Dice,  of  charges  of 
corruption  and  incompetency.  The  opportunity  had  come  at  last 
to  prove  that  Dice  and  men  loyal  to  him  had  been  derelict.  Fulton 
grasped  it  with  avidity. 

He  first  made  inquiry  as  to  the  status  of  the  case  against  the 
Winner  Magazine  submitted  long  ago  to  the  third  assistant.  He 
was  advised  that  no  action  had  been  taken  or  was  intended.  Then 
came  the  Travers-Barrett  leak  of  information  opening  the  way 
direct  to  the  bureau  of  the  third  assistant,  hitherto  untainted  by 
scandal's  slightest  breath.  The  third  assistant  had  not  acted.  Per- 
haps the  very  man  who  had  flouted,  condemned,  and  scorned  the 
inspectors  service,  and  had  passed  through  Bristow's  inquiry,  un- 
touched, might  yet  be  reached  by  a  campaign  conducted  with  suffi- 
cient acumen,  energy  and  sagacity.  That  were  indeed  a  triumph. 
Comes  now  a  letter  of  instructions  from  Washington.  The  post- 
master-general had  been  fully  advised.  Fulton  was  ordered  to 
follow  the  case  up  wherever  it  might  lead,  "even  if  it  touches 
people  in  Washington." 

Such,  in  brief  outline,  is  the  theory  that  the  mutual  jealousies 
and  animosities  of  a  cabal  of  the  postoflice  inspector  service,  may 
have  furnished  the  motives  that  animated  some  of  the  principal 
actors  of  this  tragic  drama.  Upon  this  theory,  Lewis  is  not  to  be 
considered  as  in  any  way  fraudulent  or  dishonest,  but  merely  Un- 
fortunate in  becoming  by  the  veriest  chance  the  football  of  depart- 
mental jealousy  and  inspectorial  intrigue. 

THE    PLATT-CORTELYOU    THEORY. 

What  of  the  possible  motive  of  George  B.  Cortelyou?  Madden, 
who  played  no  small  part  in  this  controversy,  boldly  alleges  a  con- 
spiracy between  the  late  Senator  Thomas  C.  Piatt  of  New  York 
State,  and  the  former  postmaster-general.  A  bronze  tablet  upon 
the  entrance  gates  of  University  City  bears  among  other  records 
the  following  legend:  "People's  United  States  Bank,  founded 
November  14,  1904,  assassinated  July  6,  1905."  The  officials  of 
the  Postoffice  Department  concerned  in  the  alleged  conspiracy  and 
"assassination,"  including  Cortelyou,  enter  their  general  denial,  and 
plead  in  justification  their  official  oaths  and  duty.  The  lips  of 
Senator  Piatt  are  closed  in  death. 


40  THE  SIEGE  OF  UNIVERSITY  CITY 

The  late  Thomas  C.  Piatt  of  New  York  was  president  of  the 
United  States  Express  Company.  He  was  reputed  to  be  the  domi- 
nating factor  in  the  so-called  express  trust.  Piatt  was  for  many 
years  the  Republican  "boss"  of  the  Empire  State.  The  election  of 
Theodore  Roosevelt  as  governor  of  New  York  was  made  by  .and 
with  Senator  Piatt's  approval  and  consent.  Later  he  was  active 
in  the  fateful  movement  to  shelve  Roosevelt  as  a  vice-president, 
which  by  a  freak  of  fate  opened  to  him  the  portals  of  the  White 
House.  Piatt,  through  his  power  as  "boss,"  caused  himself  to  be 
appointed  senator  from  New  York,  and  in  that  capacity  represented, 
not  the  people,  but  the  express  trusts  and  their  allies. 

Some  light  was  thrown  upon  this  man's  character,  or  lack  of  it, 
as  well  as  upon  his  motives  touching  national  legislation,  by  the 
celebrated  suit  of  Mae  C.  Woods.  This  young  woman  was  formerly 
employed,  it  is  thought,  upon  Piatt's  private  recommendation,  in  the 
Postoffice  Department  at  Washington.  Miss  Woods  alleges  under 
oath  that  she  was  employed  by  Piatt  to  advise  him  of  the  inception 
of  any  adverse  legislation.  She  did  upon  one  occasion  so  notify 
him.  He  hurried  to  Washington.  The  proposed  measure  was 
squelched.  The  senator,  thereupon,  in  complimentary  fashion  as- 
sured her  that  her  timely  warning  had  enabled  him  to  save  for  the 
express  companies  many  hundreds  of  thousands  of  dollars.  The 
circumstance  that  Miss  Woods*  suit  occurred  shortly  after  the 
elopement  of  the  senator  with  another  woman  employee  of  one  of 
the  departments  at  Washington,  occasioned  much  newspaper  gossip. 
The  whole  affair  in  connection  with  a  senator  of  the  United  States 
amounted  to  a  national  scandal. 

One  of  the  phases  of  national  legislation  opposed  by  Piatt  was 
the  creating  of  a  postal  savings  bank  under  the  auspices  of  the 
postal  establishment  of  the  United  States.  Such  a  bank  did  not 
then  exist,  in  America,  although  postal  banks  have  operated  for 
many  years  in  England,  France,  Germany  and  other  countries  of 
Europe.  Agitation  for  such  a  bank  in  America  had  been  practically 
continuous  for  years.  The  passage  of  such  a  measi:re  by  Congress 
had  been  averted  through  the  influences  commonly  known  as  the 
money  trust  and  the  express  trust.  Of  these  Piatt  was  a  moving 
spirit.  The  People's  United  States  Bank  was  a  mail  bank  institu- 
tion. The  new  bank,  through  its  certified  check  system  as  an  easy 
means  of  forwarding  money  without  charge,  touched  with  the 
finger  of  competition  two  of  the  most  sensitive  nerves  in  the  ex- 
press companies'  business:  the  transportation  of  currency,  and  the 
sale  of  money  orders.  It  is  easy,  therefore,  to  understand  the 
earnest  nature  of  Senator  Piatt's  opposition. 

The  possible  connection  of  Piatt  and  the  express  companies  with 
the  postoffice,  and  of  the  three  Avith  Lewis  and  his  bank,  may  be 
inferred   from  the   following   facts: 

George  B.  Cortclyou  was  appointed  postmaster-general  from  the 
State  of  New  York  by  Theodore  Roosevelt  at  a  time  when  Piatt, 


THE  DREYFUS  CASE  OF  AMERICA  41 

as  senior  senator^  boss  of  the  Republican  party,  and  political  repre- 
sentative of  the  most  powerful  financial  interests,  was  in  control  of 
Federal  patronage.  Cortelyou  had  been  previously  private  secretary 
successively  to  Presidents  Cleveland,  McKinley  and  Roosevelt.  A 
stenographer  by  occupation,  he  owed  his  rise  solely  to  his  fidelity 
to  his  employers'  interests.  Cortelyou  thus  enjoys  the  rare  dis- 
tinction of  having  shared  the  inmost  confidences  of  three  presi- 
dents of  the  United  States  whose  administrative  policies  were  widely 
variant.  His  acquaintance  includes,  it  is  seen,  several  more  or  less 
distinctly  opposing  and  antagonistic  groups  of  public  men,  closely 
associated  with  those  administrations.  A  man  of  strongly  marked 
individuality,  of  fixed  principles,  and  of  the  courage  of  his  con- 
victions could  hardly  have  thus  adapted  himself  with  chameleon- 
like rapidity  to  the  changeful  color  of  his  environment.  The 
ideal  private  secretary  is  the  transparent  glass,  the  open  tube  or 
the  clear  wire  through  which  his  master's  will  can  be  transmitted 
without  let  or  hindrance.  The  capacity  to  adapt  oneself  acceptably 
to  the  service  of  three  men  of  dominating  wills  as  widely  divergent 
as  those  of  Grover  Cleveland,  William  McKinley  and  Theodore 
Roosevelt,  easily  qualifies  Cortelyou  as  the  model  private  secretary 
of  the  world.  The  will  of  a  man  so  constitued,  if  he  can  be  properly 
said  to  possess  such  an  attribute,  must  be,  as  a  mechanic  would  say, 
hung  upon  a  universal  joint,  and  so  capable  of  turning  in  any  direc- 
tion. 

Moreover,  a  private  secretary  must  be  discreet.  One  capable  of 
passing  from  this  opposing  camp  to  that,  yet  in  no  wise  breaking 
faith,  is  evidently  the  very  pink  of  tactful  propriety  and  reticence. 
Cortelyou  is  a  sphinx.  No  private  secretary  ever  employed  about 
the  White  House  has  made  more  friends  by  communicating  tactfully 
the  information  which  it  was  his  duty  to  impart,  or  fewer  enemies 
by  withholding  secrets  that  it  was  his  policy  to  maintain  inviolate. 

None  of  these  relations  ever  disclosed  the  real  Cortelyou.  Cortel- 
you, the  convenience,  was  for  many  years  as  well  known  as  any 
public  figure  in  America.  Cortelyou,  the  man,  has  always  been 
essentially  an  unknown  quantity.  Upon  Madden's  theory  of  a 
conspiracy  in  the  Lewis  case,  Cortelyou  is  alleged  to  have  been  tlie 
tool  of  Piatt  and  his  allies  in  the  abuse  of  the  discretionary  power 
reposed  in  him  as  postmaster-general  of  the  United  States. 

THE    DREYFUS    CASE    OF    AMERICA. 

This  case  is  being  made  up  for  submission  by  the  Congress  of  the 
United  States  to  the  adjudication  of  the  court  of  claims.  But  the 
tribunal  of  last  resort  is  the  aroused  and  enlightened  conscience 
of  the  American  people.  How  may  the  individual  citizen  arrive  at 
a  just  and  tenable  conclusion  as  to  the  manifold  issues  and  equities 
involved  ? 

This  volume  purports  first  to  set  forth  all  the  essential  facts. 
These  are  substantiated  by  official  records.  The  principal  actors 
are  allowed  to  suggest  in  their  own  words  their  own  hypotheses 


42  THE  SIEGE  OF  UNIVERSITY  CITY 

and  theories.  Tlie  author  undertakes  to  indicate  what  allowance  it 
seems  to  him  should  be  made  for  ditterences  of  temperament,  and 
for  possibilities  of  motive.  He  points  out,  also,  what  he  believes  to 
be  the  underlj'ing  social,  commercial,  political  and  economic  tenden- 
cies involved.  Upon  a  careful  study  of  these  considerations,  all 
may  draw  unbiased  and  unprejudiced  conclusions.  At  the  least 
all  may  be  in  the  position  so  to  do,  in  so  far  as  their  own  tempera- 
mental character  will  permit. 

The  fact  that  Lewis  has  been  practically  in  a  state  of  insurrec- 
tion against  the  United  States  Government  for  the  past  six  years, 
interesting  as  this  in  itself  might  seem,  woidd  be  comparatively  in- 
significant were  it  not  for  the  additional  fact  that  he  is  supported  in 
his  rebellious  attitude  by  the  sympatliies  of  many  hundreds  of  thou- 
sands of  his  fellow  citizens,  and  literally  bj^  millions  of  women. 

The  facts  herein  narrated  speak  for  themselves.  They  are  well 
worth  the  attention  of  every  American  citizen,  of  every  leader  of 
social  and  democratic  movements  throughout  the  world,  of  every 
editor  of  responsible  papers,  of  everj'^  professor  of  sociology;  of 
every  man  or  woman  who  delights  in  the  struggle  between  progress 
or  the  spirit  of  life,  and  inertia  or  the  spirit  of  decay. 

Lewis  was  presented  one  evening  as  speaker  on  the  occasion 
of  a  banquet  at  St.  Louis,  to  an  audience  of  four  or  five  thousand 
souls.  When  someone  commented  upon  the  power  of  numbers  rep- 
resented by  such  a  vast  assemblage,  he  rejoined,  "What  would  you 
say  if  you  could  see  the  one  and  a  half  million  readers  of  the 
Woman's  Magazine  all  gathered  together.?"  The  notion  has  clung 
to  Lewis'  mind  as  a  symbol  of  the  power  of  his  editorial  following. 
Let  no  one  lightly  brush  aside  the  Lewis  case  upon  the  theory 
that  it  is  of  trivial  import.  It  is  not.  It  is  a  matter  of  eminent 
national  consequence.  It  is  a  matter  of  world-wide  significance. 
It  is  a  matter  of  abstract  truth  and  justice.  This  fact  is  known  to 
the  leaders  of  progressive  democratic  movements  upon  both  sides 
of  the  world.     The  Lewis  case  is  the  Dreyfus  case  of  America. 


CHAPTER  I. 
THE  CITY  THAT  IS  SET  UPON  A  HILL. 
The  Siege — The  Beleaguered  City — Is  Lewis  Saint  or  Sinner? 
— The     Notoriety    of    the    Siege — Which    Theory    Is 
Right? — The  Truth  About  the  Siege. 

University  City  is  besieged.  There  can  be  no  doubt  of  that.  All 
the  tokens  of  a  siege  are  present,  save  only  the  physical  ruin  that 
comes  from  the  shells,  and  such  marks  can  not  be  long  delayed. 
Leave  the  buildings,  the  machinery,  the  grounds  for  another  year; 
windows  will  crack,  plaster  will  fall,  machinery  be  rusted  and 
ruined,  laAvns  dry  and  unkempt.  That  these  signs  and  those  of 
bullets  are  not  to  be  seen  in  University  City,  as  they  were,  for 
instance,  in  Peking  when,  after  long  months,  the  first  file  of  East 
Indian  troops  crept  up  the  waterway,  and  found  the  waiting  people 
smiling  but  hungry,  is  solely  because  the  siege  is  one  of  paper, 
orders,  indictments,  citations,  fees,  instead  of  one  with  bullets, 
shells,  and  a  visible  investing  army.  All  the  other  signs  of  a  siege 
are  here.  The  army  of  outside  helpers  who  have  fled;  the  small 
number  of  active  fighters  who  are  left;  the  solitariness,  the  hunger; 
the  piecing  out  of  means  to  an  end;  the  weary  watching  for  relief; 
the  presence  of  a  few  war  correspondents  who  every  now  and  then 
get  through  news  to  the  outside  world;  the  band  of  faithful  women 
and  a  few  children,  who  bravely  day  after  day  return  to  their  self- 
appointed  tasks;  the  eager,  inspiriting  voice  of  the  captain;  the 
earnest  endeavors  of  his  lieutenants. 

university  city. 

To  live  in  a  state  of  siege  and  see  no  visible  assailant, — that  is  a 
strange  feeling.  All  round  the  besieged  city  are  courts,  judges,  offi- 
cials, editors,  bankers,  business  men  in  their  strongholds,  waiting 
for  its  final  downfall.  Inside  are  the  few  locked  in  the  tower. 
Afar  are  the  forces,  always  invisible,  but  always  felt,  of  the  higher 
powers;  the  masters  of  equity;  the  presidents  of  organizations;  the 
editors  of  the  great  newspapers  and  journals;  the  President  of  the 
United  States  himself.  There,  without,  are  also  the  educators, 
teachers,  churches,  and  the  masses  of  men  and  women  who,  in  their 
hearts,  wish  only  for  the  right  and  truth  to  prevail.  Sieges  many 
there  have  been.  But  for  all  history  and  for  all  time,  the  siege  of 
University  City  will  stand  out  as  the  one  peculiar  case  of  a  "City 
That  Is  Set  Upon  a  Hill"  besieged  by  invisible  forces,  and  wrecked 
by  invisible  foes. 

University  City  besieged,  is  still  University  City  beautiful.  Del- 
mar  Bpulevard  drives  like  an  arrow  from  the  bow  of  the  Mississippi 

43 


44  THE  SIEGE  OF  UNIVERSITY  CITY 

River,  in  the  bend  of  which  the  City  of  St.  I^ouis  lies,  straight  west 
through  the  heart  of  University  City.  It  bisects  the  central  plaza, 
and  passing  up  a  gentle  incline,  pierces  a  wide  gateway  flanked 
by  Zolnay's  famous  lions.  Beyond  the  gate,  amid  a  clump  of  old 
oak  trees  nestle  the  houses. 

Just  without  the  gateway,  adjoining  the  plaza,  are  the  principal 
buildings  of  the  Lewis  Publishing  Company.  The  home  of  the 
Woman's  National  Daily,  an  enormous  structure  originally  designed 
for  the  People's  Bank,  modeled  from  an  Egyptian  Temple  at  Kar- 
nak,  looms  upon  the  south,  windoAvless  and  mysterious.  The  winged 
globe  of  eternity,  in  weatherbeaten  bronze  is  seen  over  the  narrow 
slanting  gateway  midway  its  pale  expanse  of  sloping  wall.  Upon 
the  north  rise  the  graceful  lines  of  the  Woman's  Magazine  build- 
ing, the  far-famed  Octagon  Tower,  with  its  tall  windows,  and  its 
chubby  cherubs  atop.  Its  stately  steps  are  now  deserted  of  throng:: 
ing  feet  that  have  worn  hollows  in  the  solid  stone.  The  long,  low, 
oblong  two-story  building  of  the  magazine  press  lies  silent  in  its 
rear.     The  presses  are  idle  and  rusting. 

Northeast  of  the  Campus  rises  a  spacious  and  dignified  structure 
in  the  French  Renaissance  style,  the  Art  Institute  of  the  American 
Woman's  League.  The  busy  hum  of  potter's  wheel  is  silent. 
Rooms  lately  full  of  famous  masters  and  eager  students,  modeling 
sculpture  under  Zolna};-,  or  moulding  priceless  porcelains  under 
Taxile  Doat,  the  world  renowned  master  from  Sevres,  in  France,  arc 
empty.  Doat's  famous  collection  of  porcelains  is  sold.  The  art 
treasures  are  locked  up.  Honor  students  have  been  sent  home. 
The  gentle  finger  of  death  has  beckoned  Vanderpoel,  America's 
most  famous  teacher  of  human  figure  painting,  from  the  scene  before 
he  became  aware  that  the  ideal  city  of  his  dreams  was  destined 
again  to  become  the  battle  ground  of  contending  forces.  Others 
have  fled.  Only  Zolnay  in  his  linen  blouse  at  his  sculpture  in  liis 
lofty  studio ;  and  the  genial  Doat,  at  liis  marvelous  pottery,  still  plod 
on,  lonely  in  their  devotion  to  the  ideal  of  the  People's  University, 
faithful  believers  in  the  future  of  the  League. 

The  halls  below  are  deserted.  The  lawns  of  the  Campus  are  un- 
kempt. From  time  to  time  those  in  University  City  hear  the  slow 
booming  of  the  reports  of  the  indictments  of  the  Government. 
Sometimes  they  see  in  the  daily  press  the  flashes  of  wit  from  the 
riflers  in  the  distant  courts.  The  besieging  army  is  one  of  account- 
ants, collectors,  lawyers.  It  is  led  by  inspectors,  captained  by  heads 
of  departments,  urged  on  by  presidents,  judges,  the  leaders  and 
rulers  of  tlie  people.  The  people  themselves  wait,  anxiously  watch- 
ing the  result.  For  if  the  siege  is  not  raised  tliere  will  be  no  papers 
of  the  peo])le,  no  People's  Bank,  no  People's  University'.  Such,  in 
brief,  is  tliis  most  notable  siege  of  the  "Citv  That  Is  Set  Upon  a 
Hill." 

The  little  municipality,  meantime,  carries  itself  with  a  park-like 
air.     Broad  boulevards  run  straiglitway.     Parkways  sweep  in  grace- 


THE  DREYFUS  CASE  OF  AMERICA  45 

ful  curves.  The  lawns  are  wide  and  in  the  summer  time  are  vel- 
vety and  green.  Shade  and  shrubbery  abound.  It  is  an  ideal  place 
for  children.  Their  voices  ring  happily  in  its  open  spaces.  The 
whole  atmosphere  and  surroundings  are  rural  rather  than  suburban. 
St.  Louis,  itself,  lies  below  the  eastern  horizon  in  a  pale  haze  of 
smoke.  Westward,  the  outlook  is  to  the  prairies  of  Missouri.  West, 
North  and  South  stretches  a  wide  rolling  level,  for  hundreds  of 
miles.  Many  miles  from  the  river  come  the  real  foot-hills  of  the 
Ozarks.  University  City  itself  is  set  upon  the  first  beginnings  of 
these  rolling  heights.  It  stands  upon  the  soft  incline  at  the  top  of 
the  street  called  Delmar.  Already  its  brief  life  has  given  it  such 
an  eminence  that  nothing  can  prevent  the  whole  world  from  observ- 
ing and  noting  well  this  story  of  its  siege. 

University  City,  though  small,  is  well  and  solidly  built.  It  con- 
veys on  every  hand  the  unmistakable  impression  of  firm  adherence 
to  the  motto:  "The  end  is  to  build  well."  The  landscape  garden- 
ing and  engineering  of  the  parkways,  sidewalks,  shade  trees,  sewers 
and  promenades,  are  bej^ond  all  rational  criticism.  University 
City  is  no  flimsy  advertisement,  no  exposition  white-washed  shell 
destined  to  be  dismantled  in  six  months.  What  has  been  done  has 
been  well  done.  There  has  been  careful  forethought  and  consid- 
eration. It  has  been  built  with  high  class,  well  paid  labor.  Evi- 
dences of  breadth  of  plan,  thoroughness  and  sincerity  of  purpose 
abound  on  every  hand. 

The  rise  of  University  City,  its  extraordinary  prosperity,  its 
siege  and  bombardment,  and  its  sudden  tragic  downfall,  are  the  sub- 
jects of  this  story.  Eight  years  ago  the  central  plaza  was  all  wild 
cow  pasture;  rough  ground,  of  rich  loany  alluvial  soil,  covered  with 
coarse  grass  and  bushes.  The  surrounding  fields  were  then  worth, 
at  most,  two  thousand  dollars  an  acre;  and  this  was  chiefly  a  pros- 
pective value  because  of  the  proximity  of  St.  Louis.  Within  this 
eight  years  a  beautiful  city  has  arisen.  The  value  of  University 
City  now  runs  far  into  the  millions  of  dollars. 

These  six  or  eight  years  have  Avitnessed  a  series  of  building  opera- 
tions truly  remarkable.  Hundred  of  tons  of  concrete  and  thousands 
of  barrels  of  cement  have  been  incorporated  into  the  plant  of 
the  Lewis  Publishing  Company  alone.  Train  loads  of  stone  have 
been  required  for  the  walls  and  foundations  of  the  buildings.  Tons 
upon  tons  of  terra  cotta  have  been  consumed  upon  their  decorations. 
Tiles  innumerable  cover  the  Press  building,  the  Art  Academy  and 
the  other  structures.  Tens  of  thousands  of  dollars'  worth  of  pol- 
ished white  and  yellow  marble  have  gone  into  the  single  item  of  the 
facing  of  the  Egyptian  Temple,  and  for  mural  decoration  within 
the  other  buildings.  A  single  grand  staircase  in  Italian  marble  and 
bronze  on  the  ground  floor  hall  of  the  Octagon  Tower,  cost  nearly 
twenty  thousand  dollars.  All  this  splendor  was  erected  out  of  the 
profits  of  the  millions  of  dimes  of  the  women  of  America,  given 
willingly  for  the  little  Winner  and  the  Woman's   Magazine,  and 


46  THE  SIEGE  OF  UNIVERSITY  CITY 

for  the  beautifying  and  glory  of  what  they  learned  to  consider  as 
their  own  ideal.  University  City.  Lewis  has  often  said  that  he  has 
no  magic  means  of  coining  money;  yet  these  silver  coins  came  trun- 
dling in,  as  if  at  the  touch  of  a  wizard  wand. 

A  CENTRE   OF  MANIFOLD  ACTIVITIES. 

These  items  comprise  but  the  outer  shell.  The  mechanical  equip- 
ment of  the  separate  publishing  establishments,  each  known  as  the 
largest  and  most  highly  specialized  of  their  kind  in  the  world,  are 
the  real  heart  of  University  City.  We  cannot  see  all  the  invisible 
effects  of  these  presses  in  enlightening  the  minds  of  the  people. 
But  we  can  see  the  visible  mass  of  complicated  mechanism  that  the 
siege  of  the  city  has  stilled.  The  newspaper  plant  of  the  Woman's 
National  Daily  alone,  including  the  great  Goss  printing  press, 
comprises  a  small  mountain  of  printing,  typesetting  and  stereotyp- 
ing machinery,  all  specially  constructed  for  University  City,  and  all 
of  the  highest  grade  of  excellence.  The  mechanical  plant  of  the 
Woman's  Magazine  and  the  Woman's  Farm  Journal,  totals  over  a 
score  of  carloads  of  presses  and  folding,  stitching  and  binding  ma- 
chinery. The  plant,  in  addition,  contains  a  complete  equipment 
of  art  and  protographic  studios,  typesetting,  stereotyping  and 
photo-engraving  paraphernalia.  The  whole  is  equipped  with  elec- 
tric power  motors,  and  fitted  with  the  latest  mechanism.  The  entire 
establishment  of  these  magazines  not  only  bulks  largely  before  the 
eye  of  the  visitor,  but  commands  alike  the  admiration  of  the  archi- 
tect, engineer,  and  practical  man  of  affairs. 

The  physical  aspects  of  University  City  are,  as  we  have  seen, 
tangible  enough.  They  present  themselves  vividly  to  the  eye  of 
the  imagination,  and  lend  themselves  easily  to  that  concrete  im- 
agery wherein  alone  the  masses  of  men  are  wont  to  think.  They 
represent  the  exertion  of  forces  which  can  be  measured.  But  all 
human  experience  and  philosophy  teaches  that  back  of  this  physi- 
cal force,  underlying  as  it  were,  sustaining,  and  acting  through  the 
physical  phenomena,  is  some  kind  of  potent  spiritual  force,  in  the 
living  conceptions  of  the  minds  of  men,  of  which  inner  force  these 
outward  things  are  no  other  than  the  visible,  tangible  embodiment. 

What,  then,  is  the  soul  of  University  City,  which  has  caused  so 
great  a  stir.''  Why  has  it  given  rise  to  so  vast  a  controversy.''  To 
settle  once  for  all  these  questions,  and  clear  the  common  mind  as  to 
what  is  the  inner  meaning  of  this  unseemly  and  bewildering  strug- 
gle between  a  whole  department  of  the  Government  of  the  United 
States  of  America,  and  a  private  citizen,  is  the  object  of  this 
story. 

The  eight  years'  transformation  from  cow  pasture  to  University 
City  seems  little  short  of  a  miracle  of  creation,  a  Monte  Cristo 
dream  turned  to  reality.  It  suggests  the  inevitable  question.  What 
was  the  origin?  How  came  this  wonderful  transformation  to  be 
brought  about  ?  The  answer  is  wrapped  up  in  the  career  of  Edward 
Gardner  Lewis, 


THE  DREYFUS  CASE  OF  AMERICA  47 

Lewis  was  the  pioneer  promoter  of  real  estate  values  in  Uni- 
versity City.  Here,  just  outside  the  limits  of  St.  Louis,  he  built 
his  own  residence.  Here,  he  erected  the  plant  of  the  Lewis  Pub- 
lishing Company,  upon  the  open  fields.  His  was  the  moving  spirit 
in  the  incorporation  of  University  City  as  a  separate  municipality. 
And  it  was  he  who  was  afterward  honored  with  tlie  position  of 
its  chief  magistrate.  The  nub  of  the  controversy  is,  therefore,  the 
personality  of  the  man  who  thus  made  University  City  possible, 
who  brought  about  its  realization,  and  rendered  it  beautiful  and 
famous. 

IS   LEWIS   SAINT    OR    SINNER? 

Is  Lewis  a  saint  or  a  sinner.^  The  Siege  of  University  City 
undoubtedly  turns  on  this  question.  Two  of  the  principal  dej^art- 
ments  of  the  United  States  Government  have  sought  for  six  years 
to  prove  that  Lewis  is  a  fraud,  a  crook,  a  wilfully  evil-minded  man. 
They  have  sought  to  take  him  away  from  University  City,  and  lock 
him  up  for  a  term  of  years  in  a  United  States  penitentiary,  like 
a  common  thief,  or  footpad,  or  embezzler.  It  gives  one  cause  to 
wonder  how  many  of  the  hundreds  of  men  in  that  penitentiary  are 
really  deserving  of  their  fate.  Lewis  behind  bars,  and  Lewis  in 
his  little  city,  happy  and  smiling  through  the  long  Siege,  are  a 
contrast  that  vividly  strikes  the  public  mind. 

And  the  siege  is  still  on.  Lewis  is  now,  not  for  the  second  or 
third  time,  but  for  the  twelfth  time,  under  indictment  by  the  Gov- 
ernment. Had  any  one  of  the  previous  efforts  of  its  attorneys 
been  successful,  the  upbuilding  and  beautification  of  University 
City  would  long  since  have  been  arrested.  The  past  seven  years 
have  thus  witnessed  the  spectacle  of  a  private  citizen,  not  only 
engaged  in  the  creation  and  management  of  extensive  interests, 
real  estate,  publishing,  banking  and  associated  enterprises,  but  at 
the  same  time  withstanding  the  utmost  efforts  and  resources  of  the 
machinery  of  one  of  the  most  powerful  governments  in  the  world 
to  compnss  his  conviction,  incarceration  and  ruin. 

The  losses  of  these  six  years  of  warfare  have  fallen,  as  so  often 
happens  in  war,  not  only  upon  the  principal  combatants,  but  also 
upon  many  thousands  of  persons  innocent  of  all  wrong-doing. 
Lewis'  personal  resources  have  been  completely  wiped  out.  The  in- 
vestors and  creditors  in  his  various  enterprises  have  sustained  losses 
running  into  the  millions.  The  Government  of  the  United  States 
has  expended  hundreds  of  thousands  of  dollars  of  the  public  funds 
on  the  contest.  Two  Republican  administrations  have  sustained 
a  loss  of  prestige  that  is  incalculable.  The  Lewis'  enterprises  at 
University  City  are  at  a  standstill.  The  great  Goss  press  is  silent. 
The  People's  University  is  in  abeyance.  Its  classes  are  stopped. 
There  is  no  magazine  any  more.  The  whole  community  is  suffering 
a  check.  But  Lewis  is  at  large,  and  Lewis  is  not  a  man,  were  he 
in  jail,  to  remain  quiescent.     New  enterprises  are  projected.     Addi- 


48  THE  SIEGE  OF  UNIVERSITY  CITY 

tional  building  operations  are  being  planned.  Some,  indeed,  are 
getting  quietly  under  way.  Books  are  being  prepared  and  printed. 
Friends  are  not  lacking.  The  great  public  is  at  last  rousing  itself. 
A  tragedy  fills  all  with  a  sense  of  impending  evil.  What  has  hap- 
pened to  one,  may  happen  to  all.  Persons  familiar  with  the  story, 
are  filled  with  amazement  at  the  spectacle  of  Lewis'  continued 
courage,  energy  and  optimism.  The  more  distant  and  less  well- 
informed  world  is  vaguely  stirred  with  strange  misgivings  as  to  the 
realities  at  the  bottom  of  Lewis'  prolonged  and  successful  re- 
sistance against  such  overwhelming  odds. 

THE   NOTORIETY  OF  THE  SIEGE. 

Happy,  they  say,  is  a  nation  that  has  no  history.  University 
City  without  its  siege  would  be  University  City  without  its  story. 
The  mere  transformation  of  pasture  land  into  an  attractive  suburban 
municipality  on  the  plains  of  Missouri,  or  the  mere  creation  of  a 
manufacturing  and  printing  establishment,  however  admirable  or 
successful,  would  not  themselves  justify  the  making  of  a  book. 
Nor  would  they  attract  any  widespread  attention.  Yet  the  name 
of  University  City  is  perhaps  today  more  widely  known  through- 
out the  United  States,  and  even  in  Europe,  than  that  of  any  other 
municipality  in  America,  with  the  exception  of  the  four  or  five 
principal  cities. 

The  press  of  the  entire  world  has  given  the  unique  little  com- 
munity extraordinary  publicity.  Public  opinion  has  concerned  itself 
with  University  City  to  a  degree  that  is  unprecedented.  Such 
opinion  is  divided  after  an  astonishing  fashion.  Families,  friends, 
neighbors  and  communities  have  aligned  themselves  upon  opposing 
sides.  A  citizen  of  St.  Louis,  or  indeed  any  resident  of  Missouri, 
can  hardly  travel  anywhere  in  America,  without  finding  himself 
continually  questioned  as  to  the  facts,  and  placed  in  a  position  of 
involuntary  arbitrator  on  this  question:  What  do  you  think  of 
Lewis.''  of  the  American  Woman's  League?  of  the  People's  Bank? 
of  University  City?  University  City  is  a  Mecca  to  many.  To 
others  it  is  a  scandal  and  a  reproach. 

Meantime  that  vast  receptacle,  the  common  mind,  is  slowly 
digesting  certain  information  upon  these  matters.  The  Woman's 
Magazine  was  wont  to  circulate  to  the  number  of  one  and  a  half 
million  copies  each  issue  and  the  Woman's  Farm  Journal  approxi- 
mately half  that  number.  The  Woman's  National  Daily,  for  many 
months  issued  nearly  half  a  million  copies  daily.  The  Wom- 
an's National  Weekly  still  circulates  in  considerable  numbers. 
These  hundreds  of  millions  of  pages  were  full  of  news  and 
illustrations  about  University  City  and  its  doings;  interviews 
articles,  descriptions,  stories,  reports  of  cases,  all  spiced  with 
stirring  editorial  comment.  The  conventions  called  by  notices  in 
these  papers  were  attended  by  thousands  of  delegates  representing 
local  chapters  all  over  the  United  States.  They  came  to  University 
City  in  train  loads.     These  periodicals  circulated  nationally  over 


THE  DREYFUS  CASE  OF  AMERICA  49 

the  widest  area  that  ever  newspaper  supplied.  It  was  the  proud 
boast  of  Lewis  that  no  postoffice  in  America  was  so  small  as  not 
to  receive  two  or  three  copies  of  his  journals.  Supplementing  these 
enormous  channels  of  publicity  came  a  flood  of  circular  matter,  and 
pamphlet  literature  of  such  volume,  that  Lewis'  total  output  is  said 
to  have  comprised  more  by  weight  than  one-fourth  of  the  outgoing 
mail  of  the  entire  City  of  St.  Louis.  All  this  has  enabled  the 
publisher-promoter  to  place  his  own  story  vividly  and  continuously 
before  the  public. 

The  Postoffice  Department  has  added  to  this  original  flood  by 
issuing,  itself,  to  inquiring  citizens  and  to  the  press,  a  series  of 
pamphlets,  at  public  cost,  in  justification  of  its  official  course  in 
endeavoring  to  limit,  withstand,  and  even  arrest  this  tide  of  publi- 
cations sent  at  the  expense  of  the  Government,  in  a  manner  which 
it  sought  to  brand  as  fraudulent. 

The  Lewis  case  has  furnished  quantities  of  newspaper  copy. 
Many  are  the  good  stories  culled  from  it  that  have  gone  the  rounds. 
"Lewis  has  sold  a  million  watches  by  starting  an  endless  chain; 
cured  men  of  smoking  by  putting  tabloids  in  their  coffee;  taught 
his  subscribers  that  the  World's  Fair  was  an  annex  to  his  Publish- 
ing Company;  coaxed  millions  from  old  ladies,  farm  girls,  washer- 
women and  servants,  and  hidden  away  the  spoil;  juggled  discount 
notes,  and  so  confused  bankers  as  to  make  millions  by  ringing  the 
changes;  bought  land  and  sold  it  to  his  deluded  subscribers  for  ten 
times  its  worth;  offered  dollar  shares  in  a  newspaper  that  he  did 
not  own;  sold  worthless  stock  in  a  company  for  manufacturing 
bottle  stoppers  out  of  the  returns  of  his  old  newspapers."  So  the 
tide  runs  on,  tinged  with  charges  of  every  kind  of  exhibition  on 
his  part  of  personal  vanity  and  of  fraudulent  scheming.  And  all 
these  tales  are  colored  with  the  idea  that  Lewis  is  the  great  get- 
rich-quick  man  of  Missouri.  The  great  St.  Louis  dailies  have 
necessarily  covered  the  case  mainly  from  the  news  standpoint.  Its 
most  sensational  facts  and  phases  have  been  purveyed  by  them  to 
the  American  reading  public,  hot  and  well-spiced,  with  the  hectic 
cleverness  of  newspaperdom.  Paragraphs,  more  sober,  have  been 
distributed  through  the  channels  of  the  Associated  and  United 
Press.  The  salient  features  have  been  sent  by  cable  abroad  through 
the  press  associations  of  London,  or  direct  to  English  and  European 
papers. 

WHICH    THEORY    IS    RIGHT? 

The  existence  of  University  City,  and  the  siege  of  it,  having  thus 
become  noised  abroad  by  Lewis,  by  the  Postoffice  Department  and 
by  the  American  and  European  Press,  by  editors  of  associated 
magazines  and  by  writers  attracted  by  its  vivid  interest,  public 
opinion  has  gradually  become  crystallized  on  one  or  another  of  three 
different    theories. 

Lewis'  friends  and  sympathizers  class  him  as  a  genius,  a  wise 
innovator,   an   ardent  reformer.      They  attribute  his  failures   and 


50  THE  SIEGE  OF  UNIVERSITY  CITY 

losses  directly  to  the  opposition  of  the  Government,  moved  thereto 
by  financial  interests^  such  as  the  express  companies,  or  to  the  at- 
tacks of  newspapers  such  as  the  St.  Louis  Post-Dispatch,  the  Rural 
New  Yorker,  and  others,  which  he  has  antagonized  while  setting 
himself  up  as  cliampion  of  local  and  rural  interests. 

The  official  theor}"  of  the  postal  establishment,  commonly  sup- 
ported by  postmasters,  letter  carriers,  and  their  adherents  every- 
where, is  simply  that  Lewis  is  a  law-breaker.  In  their  eyes  he  is 
a  publisher  who  is  wrongly  using  the  mails  to  ask  money  for  the 
promotion  of  his  private  schemes,  or  for  plans  which  he  never 
meant  to  carry  out.  They  hold  that  the  investigation  of  his  enter- 
prises revealed  conditions  such  that  it  became  the  duty  of  the 
authorities  to  proceed  against  him,  as  they  would  against  any  other 
fraudulent  person  using  the  mails  to  get  money  for  goods  he  did 
not  and  could  not  deliver. 

The  newspapers,  in  the  third  place,  depict  Lewis  as  an  extras 
ordinary  get-rich-quick  schemer  of  the  Colonel  Mulberry  Sellers 
type.  They  deem  him  a  man  whose  sensational  career  deserves 
no  more  consideration  at  their  hands  than  is  necessary  to  round  it 
out  into  a  good  newspaper  story,  or  a  cleverly  written  Sunday 
feature  article.  This  theory  is  that  Lewis  is  a  man  bent  on  getting 
rich  by  the  easiest  and  quickest  scheme;  that  he  has  money  hidden 
away  and  wants  more.  All  his  plans  are  said  to  be  self-advertise- 
ments. All  he  desires  is  thought  to  be  the  dollars.  When  he  has 
thieved  enough  from  the  public,  the  paragraphers  intimate,  he  will 
retire  and  start  a  harem,  or  bask  in  California,  or  riot  in  Paris. 
How  unlike  this  reportorial  notion  is  to  the  true  state  of  the  affair, 
readers  of  this  book  can  judge. 

THE  TRUTH  ABOUT  THE   SIEGE. 

The  whole  controversy,  from  the  date  of  its  inception  has  now 
been  extended  over  a  period  of  twelve  years.  The  mass  of  assertion 
and  denial  to  which  it  has  given  rise  is  enormous.  The  news  items 
and  editorials  concerning  it,  cut  from  the  daily  press,  kept  in  Uni- 
versity City,  occupy  a  dozen  large  scrap  books.  They  number  many 
thousands  of  clippings.  The  magazine  articles  and  pamphlet  liter- 
ature relating  to  it  occupy  several  drawers  of  a  large  filing  case. 
They  number  many  hundreds.  The  dockets  of  the  vState  courts 
of  .Missouri  and  the  Federal  courts  are  broadly  blazed  with  a  trail 
of  the  Lewis  case,  leading  up  to  the  Supreme  Court  of  the  United 
States  at  Washington.  The  transcripts  of  the  records  of  these 
cases  constitute  more  than  a  score  of  fat  well-printed  volumes. 
They  occupy  h,undreds  of  pages.  The  standing  committee  of  the 
Congress  of  the  United  States  on  postoffice  expenditure,  kno-\vn 
as  the  Ashbrook  Committee,  has  recently  (1911-1912)  undertaken 
to  investigate  this  subject  thoroughly  from  top  to  bottom,  affix 
the  blame  and,  if  necessary,  advise  changes  in  the  postal  law.  For 
Lewis  has  claimed  damages  from  the  Government  to  the  amount  of 
three  million  dollars  for  the  destruction  of  his  business.    The  testi- 


THE  DREYFUS  CASE  OF  AMERICA  61 

mony  taken  in  the  Ashbrook  hearing  already  runs  into  several  thou- 
sand printed  pages. 

The  justification  for  this  present  volume  becomes  clear  as  the 
noonday  sun,  and  its  necessity  is  felt  as  that  of  fresh  air  in  a 
long  closed  room,  when  in  a  careful  study  of  all  the  documents, 
including  letters  of  the  general  public,  it  appears  that  no  ordinary 
person,  in  fact,  no  one  at  all,  other  than  the  two  or  three  chief 
actors,  could  by  any  other  means  obtain  a  well-rounded  view  of  all 
the  issues  of  this  most  complex  argument.  Every  newspaper  article 
or  editorial,  every  document,  every  pamphlet  heretofore  produced, 
upon  either  side  of  this  controversy,  has  related  to  but  one  phase, 
or  at  most  to  some  one  or  two  angles  of  the  complex  subject  matter. 
Many  such  contributions  have  been  based  upon  utter  misapprehen- 
sion of  the  true  state  of  facts  as  a  whole.  All  manner  of  preju- 
dice, bias,  envy,  spleen,  malice,  greed,  expedienc}'',  and  denial  of 
fairness,  justice,  and  the  rights  of  others,  is  insidiously  instilled 
into  many  of  the  documents.  Seeping  thence  from  mind  to  mind, 
they  have  imbued  the  atmosphere  of  the  case  with  rank  and  poi- 
sonous odors  that  only  the  sweet  fresh  breeze  of  the  noblest  and 
highest  public  opinion,  inspired  by  the  sense  of  fairness  and  the 
love  of  truth,  can  disperse. 

One  of  the  parties  is  a  Department  of  the  National  Government, 
the  Postoffice.  The  gravest  charges  are  made  against  two  Repub- 
lican administrations.  The  other  party-in-chief  is  a  private  citizen. 
The  business  enterprises  involved  are  the  property  of  some  hun- 
dreds of  thousands  of  small  investors,  with  a  few  larger  ones,  scat- 
tered through  every  State  in  the  Union.  There  is  hardly  a  town, 
or  even  a  decent-sized  village  in  America  where  there  are  not  one 
or  more  persons  directly  concerned,  either  in  the  magazine,  the  stock 
of  the  Lewis  companies,  or  of  the  bank,  as  member  of  the  League, 
or  as  student,  actual  or  prospective,  of  the  People's  University. 
The  notoriety  of  the  case  has  been  increased  by  the  Ashbrook  Con- 
gressional investigation.  This  has  drawn  men  from  all  parts  to 
give  outspoken  witness  as  to  the  truth.  Altogether,  it  is  perfectly 
apparent  that  the  public  demands  the  facts.  For  the  case  cannot 
be  settled  until  the  white  light  of  truth  is  allowed  to  penetrate 
the  entire  controversy  and  throw  into  relief  all  of  its  inner  workings. 
Thus  alone  can  every  episode  be  made  to  stand  out  in  proper  per- 
spective and  proportion.  Thus  only  will  the  true  relations  of  the 
varied  parts  of  this  living  drama  at  last  appear. 


CHAPTER  II. 
TRIAL  BY  NEWSPAPER. 

The    Machinery   of   Publicity — A   Job   for   Somebody — When 
E.  G.  Lewis  Was  in  Hartford — The  Modern  Mississippi 
Bubble — Lewis  and  His  Publications — Is  Banker  Lewi!< 
Fraud     or    Victim? — Lewis,    the     Financier — Wild-cat 
Financiering — Fanatical     Finance — Lewis'     Vast     Ex- 
ploits OF  the  Past  Ten  Years — The  Schemes  of  E.  G. 
Lewis — Other  People's  Money — The  E.  G.  Lewis  Bub- 
ble— Lewis,  the  Martyr — The  Motives  of  the  Press. 
Everyone  nowadays  reads  the  newspapers.     Most  men  form  their 
opinions  almost  at  unawares  from  news  items  and  editorials.     The 
court  of  public  opinion  is  the  court  of  last  resort  in  a  democracy. 
Its  final  decrees  are  omnipotent.     The  officers  of  this  great  court 
are  newspaper  men,  the  gentlemen  of  the  Fourth  Estate.     Reporters 
are  the  advocates.     Editors  are  the  judges.     The  public  is  one  vast 
jury  of  fifty  million  or  so,  that  reads  instead  of  listens.     In  some- 
body's happy  phrase,  trial  by  newspaper   has  been  substituted  in 
America  for  trial  by  jur3^     The  court  of  public  opinion  has  become 
the  palladium  of  national  liberties. 

The  subject  of  this  present  story  has  been  brought  prominently 
before  the  court  of  public  opinion  on  several  distinct  occasions 
during  the  period  of  the  last  seven  years.  The  pleadings  have  been 
voluminous.  The  arguments  were  lengthy  and  worded  with  force 
and  skill.  But  thus  far  no  clear  verdict  has  been  rendered.  Each 
newspaper  discussion  has  ended,  to  employ  the  legal  phrase,  in  a 
mistrial.  The  great  jury  has  disagreed.  A  large  number  of  news- 
paper readers  have  undoubtedly  formed  the  opinion  that  Lewis  is  a 
crook.  Others  have  reached  the  opposite  conclusion:  they  think  he 
is  a  very  useful  citizen,  and  a  victim  of  conspiracy  and  persecution. 
Now,  a  man's  judgment  or  opinion  upon  any  subject  can  never  be 
any  better  than  his  information.  The  opinions  of  most  persons  about 
Lewis  have  been  formed  from  newspaper  stories  which  they  have 
read,  but  the  exact  details  of  which  they  have  probably  forgotten. 
Whether  their  present  conclusions  are  right  or  wrong  depends,  there- 
fore, almost  entirely  upon  the  truth  or  falsity  of  tlie  original  stories 
which  they  have  read.  For  the  purpose,  therefore,  of  refreshing 
the  minds  of  many  persons  who  have  formed  their  opinions  as  to  the 
subject  of  this  story  from  the  widely  circulated  press  accounts,  a 
small  group  of  newspaper  stories  has  been  selected  for  republication. 
Tliese  may  be  taken  as  quite  fairly  representative  of  the  hostile 
attitude  of  the  press.     Chosen  from  among  hundreds  of  newspaper 

52 


THE  DREYFUS  CASE  OF  AMERICA  63 

clippings  after  careful  analysis  and  comparison,  they  embrace  prac- 
tically the  entire  mass  of  current  rumor  and  feeling  about  Lewis 
and  his  alleged  frauds.  In  substance,  these  stories  have  been 
reprinted  in  many  forms  throughout  the  English-speaking  world. 
Few  persons  can  have  seen  them  all.  Those  who  have  previously 
read  one  or  more  of  them  will  find  them  convenient  here  for  com- 
parison Avith  the  facts.  Others  may  enjoy  their  picturesque  details 
and  racy  style.  All  will  recognize  that  this  mass  of  comment  must 
have  had  some  origin.  If,  upon  the  whole,  it  does  not  truthfully 
represent  the  facts,  then  the  fountains  of  public  opinion  must  some- 
how or  other  have  been  poisoned. 

THE  MACHINERY  OF  PUBLICITY. 

A  few  words  are  needful  as  to  the  machinery  of  newspaper  pub- 
licity. Neither  the  big  city  daily  nor  the  country  weekly  can  have 
a  special  correspondent  or  other  representative  available  to  cover 
every  important  piece  of  news  in  every  part  of  the  land.  INIodern 
newspapers  depend  primarily  upon  the  Associated  Press  and  similar 
types  of  news-gathering  organizations,  for  their  news  from  distant 
parts.  These  organizations  maintain  what  is  known  as  a  news  ser- 
vice, to  which,  under  certain  conditions,  newspapers  may  subscribe. 
Each  newspaper  covers  its  own  local  news.  The  reporters  and  edi- 
torial staff  of  a  local  paper,  after  preparing  for  their  own  columns 
the  news  items  of  the  hour,  telegraph  the  substance  of  their  stories 
to  a  central  bureau.  Thence,  in  turn,  they  are  dispatched  to  all  the 
subscribers  of  this  special  service  that  desire  them.  A  single  news- 
paper representing  locally  a  great  news  service  can,  therefore,  color 
and  shape  the  entire  news  dispatches  to  all  its  fellow  members 
touching  any  subject  as  to  which  its  owners  may  chance  to  have  a 
personal  interest. 

Another  custom  that  is  practically  universal  among  newspapers 
is  that  of  copying  good  stories  from  the  columns  of  exchanges.  The 
exchanging  of  newspapers  is  quite  usual.  Every  newspaper  main- 
tains its  exchange  list  of  other  periodicals  to  which  it  is  mailed  daily. 
Each  has  its  exchange  desk,  where  an  editor  receives  copies  of  other 
periodicals,  and  examines  them  for  matter  of  possible  interest  to  his 
own  readers.  Thus,  news  items  and  feature  stories  printed  by  a 
local  newspaper,  if  thought  to  be  of  sufficient  interest,  are  clipped 
and  reprinted  in  part,  or  in  entirety,  by  many  newspapers  in  widely 
scattered  places.  The  more  sensational  a  story,  the  more  often  it  is 
likely  to  be  republished.  The  main  events  of  The  Siege  of  Univer- 
sity City,  its  skirmishes,  sorties,  battles,  and  the  outlines  of  its  great 
campaigns,  have  been  thus  prepared  by  the  publishers  of  the  great 
daily  newspapers  in  St.  Louis.  They  have  been  placed  upon  the 
wire  as  news  dispatches  to  the  various  press  associations  with  cen- 
tral offices  in  the  great  cities.  Thence  they  have  been  scattered  as 
exchanges  far  afield,  over  the  length  and  breadth  of  the  whole  con- 
tinent of  America,  and  sent  abroad  to  Europe  or  the  Orient. 

Such  stories  are  unhesitatingly  accepted  by  the  authority  of  news- 


54  THE  SIEGE  OF  UNIVERSITY  CITY 

paper  custom^  without  attempted  verification.  The  law  of  libel  is 
supposed  to  deter  tlie  local  publisher  who  originates  the  story  from 
misstatement.  Other  newspaper  editors  assume  that  the  facts  are 
substantially  as  stated.  They  take  a  chance  on  reprinting  anything 
that  they  think  likely  to  be  of  sufficient  interest  to  their  readers. 
The  mere  fact  of  the  appearance,  therefore,  of  these  items  in  rep- 
utable newspapers  published  in  widely  scattered  places,  is  no  real 
criterion  of  their  reliability.  In  the  interest  of  sober  historic  verity 
they  must  be  traced  to  their  source.  This  source,  in  nearly  every 
case,  must  be  the  office  of  the  newspaper  at  St.  Louis  in  which  they 
were  originally  drafted.  The  sources  of  information  used  by  the 
authors  of  the  story  must  then  be  considered.  The  business  and 
political  interest,  and  the  possible  bias  of  the  owners  of  the  news- 
paper that  first  stood  sponsor  for  these  news  items  or  stories,  must 
be  thought  of.  The  circumstances,  the  prejudices,  the  passions  of 
the  hour,  all  must  be  allowed  for,  in  any  final  test  of  truth.  Finally, 
the  actual  facts  of  judicial  or  commercial  record  must  be  stated  and 
compared  with  the  newspaper  stories  as  sent  to  the  world  at  large. 
It  must  be  remembered,  however,  that  the  first  business  of  a  news- 
paper is  to  interest  its  readers,  even  to  startle,  to  make  them  read. 
Newspaper  reporters  are  not  on  the  witness  stand.  It  is  not  incum- 
bent on  them  to  give  the  whole  truth. 

Certain  of  the  articles  which  follow  were  no  doubt  published  in 
perfectly  good  faith.  But  the  editor  of  the  paper  who  was  respon- 
sible for  their  republication  in  distant  parts  would  be  among  the 
first  to  admit  that  he  had  been  obliged  to  depend  upon  second-hand 
and  hearsay  sources  for  his  information.  He  would  freely  acknowl- 
edge that  the  facts  stated  are  fragmentary.  He  knows  full  well  that 
if  reset  in  their  original  relations  they  might  present  an  altered 
aspect.  He  is  well  aware  that,  in  common  with  other  editors,  he  has 
made  no  attempt  at  verification  and  has  few  or  no  facilities  for  so 
doing.  No  really  accurate  story  of  the  amazing  growth  of  popular 
magazines  and  mail  order  institutions  in  the  great  Middle  West  of 
America  has  yet  been  written.  Few  full  accounts  have  appeared, 
even  of  the  special  institutions  at  University  City  that  have  caused 
this  ever-growing  trouble  with  the  Government,  and  among  other 
things  have  rearranged  for  American  women  the  centre  of  the  hab- 
itable world.  Yet  the  notion  of  The  Siege  of  University  City  as 
a  comprehensive  story  should  make;  a  vivid  appeal  to  the  journal- 
istic mind. 

A  JOB   FOR  SOMEBODY. 

The  editor  of  the  Beacon-Journal  of  Akron,  Oliio,  expresses 
admirably  a  mental  attitude  which  is  doubtless  shared  by  a  great 
majority  of  his  editorial  brethren.  His  challenge  is  here  cheerfully 
accepted  as  a  gage  of  battle.  An  attempt  will  be  made  in  this  vol- 
ume to  give  the  "impartial  survey"  therein  desired,  with  fullness 
and  such  skill  as  the  writer  can  command.  The  text  itself  will,  it  is 
hoped,  be  accepted  as  its  own  "guarantee  of  impartiality."     Cer- 


THE  DREYFUS  CASE  OF  AMERICA  55 

tainly,  the  necessity  for  this  story  could  hardly  be  more  aptly  or 
forcibly  expressed  than  in  the  following  leader  entitled,  "A  Job  For 
Somebody" : 

One  of  the  many  feature  writers  who  are  looking  for  subjects  for  copy 
could  fill  M.  popular  need  by  giving  a  concise  and  unbiased  account  of  the 
drama  that  has  taken  place  in  St.  Louis  and  elsewhere  since  the  suspicion 
of  the  Postal  Department  was  directed  at  the  E.  G.  Lewis  enterprises,  his 
postal  bank,  his  newspaper  and  his  American  Woman's  League,  with  its 
club   features  and  various  ramifications. 

Whether  it  is  prosecution  or  persecution,  the  case  has  gone  to  a  length, 
and  involved  a  number  of  persons  sufficient  to  make  it  of  national  im- 
portance. Yet  the  impartial  searcher  after  truth  is  baffled  at  every  angle 
when  he  tries  to  make  up  his  mind  as  to  its  rights  and  wrongs.  The 
fragmentary  treatment  in  newspapers  is  most  inadequate,  because  it  gives 
only  an  occasional  brief  glimpse  of  a  long  course  of  events.  The  Postal 
Department  has  been  most  active  in  the  matter,  but  has  little  to  say- 
The  Lewis  organizations  have  much  to  say,  orally,  in  their  publications, 
and  through  the  medium  of  press  sheets.  They  call  Lewis  the  American 
Dreyfus,  and  accuse  the  Postal  Department  of  all  manner  of  chicanery 
in  making  cases  against  him,  specifying  in  their  accusations  as  fine  a 
set  of  subterranean  motives  as  ever  the  muckrake  dragged  forth.  The 
loyal  member  of  the  League  believes  that  Mr.  Lewis  is  a  martyr,  and 
that  nothing  which  is  said  against  him  counts. 

To  the  outsider,  the  natural  and  manifest  bias  of  the  statements  which 
come  from  Lcv/is  and  his  organization  interferes  with  satisfactory  study 
of  the  situation.  The  reader  becomes  lost  in  the  maze  of  fervid  counter- 
attack and  unsupported  conclusions,  and  longs  for  at  least  a  skeletonized 
account  of  the  technical  charges. 

The  promoter  of  the  League  is  chiefly  recommended  by  the  large  num- 
ber of  earnest  women  who  have  been  led  to  believe  in  the  sincerity  and 
practicability  of  his  plans.  Every  one  will  hope  that  they  be  not  doomed 
to  disappointment.  Meantime,  if  the  cause  is  just,  it  could  best  be  helped 
by  the  impartial  survey  of  some  skilled  writer  and  investigator  whose 
name  and  emplojTnent  would  be  a  guarantee  of  his  impartiality. 

WHEN  E.  G.  LEWIS  WAS  IN  HARTFORD. 

The  national  celebrity,  or  notoriety,  of  the  Lewis  case,  has  set  at 
work  the  local  reporters  of  the  newspapers  in  the  vicinity  of  his  early 
home.  A  considerable  contribution  to  Lewis'  newspaper  biography 
all  over  the  world  has  thus  been  made  in  articles  first  contributed  to 
the  Connecticut  press.  The  following  story  entitled,  "When  E.  G. 
Lewis  Was  in  Hartford,"  taken  from  the  Hartford  (Conn.)  Globe, 
may  be  quoted  as  a  good  example: 

The  amazing  story  of  the  life  of  Edward  Gardner  Lewis,  who  is  now 
under  indictment  iri  St.  Louis  on  charges  of  using  the  mails  to  defraud, 
and  whose  enterprises,  which  drew  subscriptions  said  to  amount  to  ten 
million  dollars,  chiefly  from  women,  are  in  the  hands  of  a  receiver,  pos- 
sesses more  than  a  passing  interest  for  the  people  of  Hartford,  since  it 
was  in  this  city  that  he  started  his  first  so-called  scheme.  He  was  at  one 
time  a  student  at  Trinity  College,  where  he  possessed  the  reputation  of 
being  an  extraordinarily  bright  young  man  in  everything  but  his  studies. 

Edward  Gardner  Lewis  is  the  son  of  Rev.  William  Henry  Lewis,  rector 
of  St.  John's  Episcopal  Church  of  Bridgeport,  the  largest  church  in  that 
city.  His  father  graduated  from  Trinity  in  the  class  of  1865,  and  has 
since  received  two  honorary  degrees  from  his  alma  mater.  An  uncle  of 
Lewis'  also  graduated  from  Trinity,  and  Lewis  himself  came  to  Hartford 
and  to  Trinity  in  the  fall  of  1886,"  when  he  entered  college  with  the  class 


56  THE  SIEGE  OF  UNIVERSITY  CITY 

of   1890.     He   stayed  onlj  about   a  month,  however,   as  he   was   forced   to 
leave  college  on  account  of  ill-health. 

LEWIS    IN    COLLEGE. 

He  returned  in  the  faU  of  1888  and  entered  the  class  of  1892.  While  at 
college  he  paid  his  board  by  managing  an  eating  club,  and  paid  his  college 
bills  with  wages  received  from  a  tobacco  finii,  for  which  he  traveled  around 
the  state  selling  cigars.  He  was  never  a  good  student,  and  his  friends 
believed  tliat  the  reason  M'hy  he  did  not  stand  v. ell  in  his  studies  was  that 
he  was  interested  in  too  many  outside  activities.  He  did  not  have  time 
to  devote  to  the  pursuit  of  the  sort  of  knowledge  contained  in  textbooks. 

To  show  that  Lewis  did  not  spend  all  of  his  time  in  the  chase  after  the 
mighty  dollar,  it  was  known  to  his  friends  (and  was  one  of  his  proudest 
boasts)  that  he  assisted,  without  pay,  in  studying  and  arranging  many  of 
the  exhibits  in  the  American  Museum  of  Natural  History  in  New  York. 
He  was  an  expert  taxidermist,  and  used  to  spend  hours  in  his  room  at 
college  stuffing  and  mounting  birds.  This  was  his  only  recreation,  as  he 
did  not  indulge  in  athletic  sports. 

At  one  time  in  his  life  he  received  an  injury  to  his  spine,  and  had  gone 
AVest  to  recover  from  it.  His  tales  of  the  West  always  gatiiered  an  inter- 
ested croivd  of  listeners  at  college.  He  was  always  pleased  himself  when 
he  could  gather  a  number  of  fellow  students  to  listen  to  his  talcs  of  bass 
fishing  and  hunting,  and  in  time  he  got  the  nickname  of  "the  great  Western 
liar."  He  left  college  after  about  two  years,  but  kept  up  his  interest  in 
Trinity  and  helped  in  the  education  of  two  younger  brothers,  one  of  whorfl 
graduated  in  the  class  of  1903,  and  is  now  with  Edward  in  St.  Louis. 
After  leaving  college  he  continued  to  work  for  the  tobacco  firm,  and  opened 
offices  in  the  Goodwin  Building  at  the  corner  of  Asylum  and  Haynes 
streets.  He  also  took  an  agency  for  a  diamond  firm,  and  later  started 
selling  watches,  from  which  he  evolved  his  scheme  of  selling  jev/elry  by 
the  endless  chain  plan. 

IN   BUSINESS   AT    HARTFORD. 

Shortly  after  he  started  in  business  for  himself  he  began  selling  on  a 
large  scale  his  cure  for  the  tobacco  habit,  which  he  called  "Corroco,"  or 
"Anti-Tobac."  This  was  prepared  in  tablet  form  by  Parke,  Davis  &  Co. 
of  Detroit,  Mich.,  and  was  sold  to  druggists  on  a  neat  standard,  which 
held  a  dozen  packages  of  the  remedy.  The  packages  sold  for  twenty-five 
cents  each.  In  connection  with  the  remedy,  he  issued  a  pamphlet,  which 
purported  to  tell  the  story  of  the  discovery  of  the  cure. 

According  to  this  pamphlet,  Lewis  was  traveling  in  South  America  when 
he  came  upon  a  tribe  of  Indians,  from  whom  he  received  the  great  secret. 
The  Indians  had  contracted  the  habit  of  smoking  from  the  whites  of  the 
country.  The  health  and  prosperity  of  the  tribe  had  steadily  declined 
imder  the  influence  of  the  weed.  The  chiefs  of  the  tribe  and  medicine 
men  saw  that  something  must  be  done  to  restore  the  lost  powers  of  their 
warriors.  In  response  to  their  prayers  to  the  Great  Spirit,  an  herb  was 
discovered  which  killed  all  desire  for  nicotine.  Under  its  influence  the 
tril)e  again  arose  to  its  old-time  power.  The  pamphlet  was  illustrated 
with  colored  drawings  of  Indians  and  South  American  scenes,  made  by 
Lewis  himself.  For  he  possesses  artistic  ability,  in  addition  to  his  other 
accomplishments.  The  pamphlet  made  interesting  reading;  and  the  remedy 
appealed  to  women  especially,  since  they  could  treat  their  husbands, 
brothers  and  sweethearts  with  the  "Anti-Tobac"  without  their  knowing 
they  were  being  treated. 

It  must  have  been  about  this  time  that  Lewis  discovered  the  principles 
that  have  made  him  so  successful  in  getting  money  out  of  women.  The 
enterprise  prospered.  The  remedy  was  put  on  sale  in  New  York  and  sur- 
rounding states.  Branch  offices  were  being  established  even  as  far  west 
as  Michigan.  But  the  ])roduction  had  outgrown  I^ewis'  capital,  and  he 
began  to  teek  tor  more.    He  interested  Gilbert  F.  and  Louis  F.  Heublein 


THE  DREYFUS  CASE  OF  AMERICA  57 

in  his  scheme.  He  had  persuasive  ways  and  appeared  to  be  a  bright 
young  man  who  was  trying  to  make  his  way  in  the  world,  so  they  sub- 
scribed a  small  amount  of  money  for  the  business.  Even  then  Lewis  did 
not   have  enough  capital.     The  enterprise  went  to  smash. 

At  one  time  he  was  employing  thirty  girls  at  his  offices  in  the  Goodwin 
Building,  packing  and  shipping  the  remedy.  His  offices  were  pretentious, 
and  visitors  immediately  received  the  impression  that  they  were  in  the 
offices  of  a  prosperous  firm,  whose  head  was  destined  to  make  a  name  for 
himself  in  the  world  of  finance.  When  the  business  failed  some  of  the 
furniture  was  taken  by  the  Heubleins. 

HIS   CAREER   AS   PUBLISHER. 

In  1895  Lewis  found  himself  in  Nashville,  Tenn.  His  total  wealth 
amounted  to  one  dollar  and  ten  cents.  His  career  since  has  been  ex- 
ploited in  the  newspapers,  and  is  well  known  throughout  the  country. 
He  has  a  wonderful  newspaper  plant  in  St.  Louis.  In  one  of  the  build- 
ings alone  he  is  said  to  have  an  equipment  of  Goss  presses  worth  over 
one  hundred  thousand  dollars.  His  University  City  outside  of  St.  Louis 
is  known  far  and  wide  as  one  of  the  most  beautiful  places  in  the  country. 
The  streets  are  named  after  colleges  and  universities  througliout  the  coun- 
try, but,  strange  to  say,  none  of  them  bears  the  name  of  Trinity. 

He  built  up  his  magazine  for  women  on  the  supposition  that  thousands 
would  willingly  pay  ten  cents  a  year  for  a  magazine,  where  a  few  would 
pay  one  dollar  a  year.  This  theory  worked  out  with  the  most  flattering 
success.  At  his  magazine  office  in  St.  Louis,  where  thousands  of  sight- 
seers were  attracted  during  the  World's  Fair  and  afterwards,  every  person 
who  came  into  the  building  was  required  to  sign  his  name  in  a  register. 
Lewis'  magazine  circulation  was  built  up  in  this  way.  A  young  woman 
attendant,  who  was  stationed  at  the  register,  asked  each  visitor  to  take 
a  year's  subscription  to  the  magazine.  There  were  few  refusals.  No  one 
wanted  to  think  twice  of  spending  a  dime  while  on  a  pleasure  trip.  Some 
of  those  who  were  asked  to  subscribe  wanted  to  look  at  the  magazine  first. 
One  Hartford  man  who  made  such  a  request  refused  to  subscribe.  He 
describes  the  magazines  as  a  collection  of  clippings  from  more  reputable 
magazines.     He  felt  sure  that  none  of  the  material  in  it  was  original. 

The  magazine  was  successful,  however.  It  always  contained  a  large 
amount  of  advertising,  as  its  women  readers  were  a  most  profitable  field. 
Lewis  always  had  liimself  insured  up  to  the  limit.  At  times  he  was  said 
to  carry  ]>olicios  aggregating  one  million  dollars.  Many  Hartford  com- 
panies have  carried  his  policies.  Lately  his  life  has  been  considered  too 
much  of  a  risk.  He  does  not  now  carry  nearly  so  much  insurance.  He 
made  his  companies  beneficiaries  of  his  policies,  and  made  the  statement 
that  he  did  not  want  his  death  to  interfere  with  the  investments  of  those 
who  trusted   him  with  their  savings. 

One  of  those  who  still  believe  in  the  integrity  of  Lewis,  is  his  wife. 
She  declares  that  she  will  fight  side  by  side  with  him,  and  that  he  will 
eventually  free  himself  of  the  charges  made  against  him. 

Lewis  himself  says  that  he  has  been  persecuted  all  along  by  the  express 
companies.  He  maintains  that  they  are  behind  his  present  prosecution. 
He  says  they  are  jealous  of  him  because  of  the  money  he  handled  in  his 
dollar  bank  scheme,  which  would  otherwise  have  been  passing  through 
their  hands. 

THE    MODERN    MISSISSIPPI    BUBBLE. 

Every  well-conducted  daily  newspaper  maintains  a  "morgue," 
namely,  a  file  of  newspaper  and  other  clippings  on  the  biography  of 
every  person  in  the  public  eye.  From  this  obituaries  and  biographi- 
cal sketches  required  by  news  items  can  be  prepared  on  instant  no- 
tice.    The  occasion  of  the  legal  proceedings  whereby  the  so-called 


58  THE  SIEGE  OF  UNIVERSITY  CITY 

Lewis  enterprises  were  thrown  into  a  receivership  in  July,  1911, 
gave  temporary  news  value  to  Lewis'  life  story.  The  editors  of 
many  newspapers  ordered  from  the  morgue,  the  envelope  marked 
"E.  G.  Lewis,"  and  "heated  up"  a  rehash  of  the  contents.  Articles 
of  this  type  appear  to  have  been  prepared  in  local  newspaper  offices 
at  St.  Louis  and  circulated  either  on  request,  through  some  news- 
paper service,  or  from  interested  motives.  The  following  story 
taken  from  the  Boston  Herald  of  July  31,  1911,  prefaced  by  a  news 
paragraph  about  the  postoffice  inspectors,  from  their  correspondent 
at  Washington,  is  of  this  character.  The  original  sources  from  which 
it  is  drawn  are,  as  we  shall  see,  the  statement  of  Nichols,  the  reports 
of  postoffice  inspectors,  and  a  speech  in  defense  of  the  Postoffice  De- 
partment by  Senator  Burton  of  Ohio.  As  the  sequel  will  show,  it  is 
for  the  most  part  a  tissue  of  fabrications. 

Lewis,  who  was  born  in  Winsted,  Conn.,  the  son  of  a  clergyman,  is 
under  indictment  in  St.  Louis,  charged  with  using  the  mails  to  defraud. 
Enterprises  which  drew  subscriptions  said  to  amount  to  nearly  ten  million 
dollars,  chiefly  from  women,  are  in  the  hands  of  a  receiver.  He  started 
his  career  as  a  financial  wizard  on  a  capital  of  one  dollar  and  ten  cents. 

The  records  of  the  civil  and  criminal  proceedings  against  Lewis  show 
that  in  the  twenty-five  years  since  he  left  college  he  has  invented  many 
schemes  and  won  the  confidence  of  many  persons  who  were  willing  to 
risk  their  savings  in  the  hope  of  being  made  rich  quickly.  Senator  Burton 
of  Ohio,  in  defending  the  action  of  the  Postoffice  Department  toward 
Lewis'  enterprises,  said  '•ecently  on  the  floor  of  the  Senate: 

HIS   MODEST   CAPITAL. 

"They  are  as  numerous  as  the  list  that  Bagehot  gives  of  the  absurd 
enterprises  in  which  jjeople  were  urged  to  invest  about  the  year  1700, 
when  the  wheel  of  perpetual  motion  and  a  lot  of  other  ridiculous  things 
furnished  the  basis   for  the  formation  of  stock  companies." 

Lewis'  wife,  with  whom  he  eloped  (?)  from  Baltimore,  where  he  was 
studying  for  the  bar,  says  that  she  furnished  the  dollar  and  twenty-five 
cents  with  which  he  laid  the  foundation  of  his  dazzling  rise  to  wealth  in 
St.  Louis. 

"It  was  all  he  needed,"  she  says,  "but  he  had  me,  and  I  was  his  vice- 
president.  And  I  have  enough  in  my  own  name  now,  and  always  will 
have,  to  furnish  him  another  dollar  and  twenty-five  cents  should  he  ever 
need  it.     And  I  can  be  his   vice-president  again." 

He  made  money  even  during  his  college  days.  On  leaving  college  he 
sought  to  I)uild  up  a  fortune  with  a  sarsaparilla  blood  medicine.  This 
failed,  and  he  lost  all  he  had  made  with  the  other  cure.  He  was  suc- 
cessively sales  agent  for  a  diamond  broker  and  a  demonstrator  for  watches. 
Finally  he  drifted  to  Nashville,  Tenn.,  where  his  inventive  bruin  originated 
"Anti-Skeet"  ynd  "Bug  Chalk." 

EASY  MOXEY  IN  BUG  KILLIKO. 

It  was  here  that  Lewis  awoke  one  morning  in  1895  to  find  that  his  total 
assets  were  one  dollar  and  ten  cents.  Then  he  had  an  idea.  He  went  to 
a  wholesale  house  and  boi^ght  a  gross  of  ordinary  crayons  for  thirty-five 
cents  and  a  liottle  of  oil  of  wintergreen  for  twenty-five  cents.  He  poured 
the  wintergreen  over  the  chalk,  and  after  capturing  a  live  roach  he  went 
to  the  drug  department  of  the  store  and  announced  a  demonstration  of 
his  "Wonderful   Bug  Chalk." 

He  made  a  chalkmark  on  the  table  and  set  the  roach  free.  When  the 
bug  started  to  walk  across  the  chalkmark  and  smelled  the  wintergreen  it 
backed  off  and  went  the  other  way.     He  sold  the  mixture  of  cravon  and 


THE  DREYFUS  CASE  OF  AMERICA  59 

wintergreen  in  the  store  for  seven  dollars  and  fiftj'  cents,  and  then  made 
a  house-to-house  canvass  with  Ihe  chalk.  He  soon  had  a  small  bank  roll. 
Lewis  then  originated  "Anti-Skeet"  and  "Anti-Fly."  These  preparations 
were  tablets  which,  when  burned,  made  a  cloud  of  smoke  supposed  to  be 
deadly  to  mosquitoes  and  flies.  His  first  corporation  was  formed  to  take 
over  these  preparations,  but  the  sheriff  finally  seized  the  assets,  including 
a  carload  of  "Anti-Skeet,"  and  one  of  Lewis'  partners  committed  suicide. 
The  sheriff  was  induced  to  release  the  carload  of  mosquito  tablets,  and 
Lewis  moved  on  to  St.  Louis  and   began  his  career  in  this  city. 

SCHEMES  GALORE  FOLLOWED. 

There  i'ollowed  in  rapid  succession  "Dr.  Hott's  Cold  Cracker,"  warranted 
to  "crack  a  cold  in  half  an  hour";  "Walk-Easy  Foot  Powder,"  which 
made  money  for  Lewis  the  first  summer,  but  went  out  of  business  in  the 
winter;  "Anti-Cavity,"  a  toothache  medicine;  "The  Progressive  Watch 
Company,"  an  endless  chain  scheme  by  which  one  could  get  a  watch  by 
paying  a  dollar  down  and  inducing  a  number  of  other  persons  to  do  the 
same;  a  mail  order  publishing  concern  through  which  Lewis  first  entered 
the  publishing  business  with  a  small  magazine  to  exploit  cheap  jewelry; 
an  installment  company  to  sell  watches  and  jewelry  for  one-third  down 
and  the  rest  monthly,  the  cost  of  the  article  being  really  covered  by  the 
cash  payment;  an  addressing  machine  company  which  sold  stock,  but  no 
machines;  a  coin  controller  which  sold  devices  for  use  on  telephones,  but 
which  proved  to  be  an  infringement  on  a  patent;  a  collection  agency  to 
assist  mail  order  houses  to  collect  accoimts,  mainly  from  children  who 
answered  advertisements  in  the  weekly  papers  and  magazines;  and  a 
guessing  rontett  on  the  attendance  at  the  St.  Louis  Exposition. 

Then  Lewis  turned  his  back  on  the  smaller  creations  of  his  mind  and 
went  in  for  greater  things.  He  organized  the  Development  and  Invest- 
ment Company,  a  holding  company  for  later  schemes.  The  stock  of  this 
was  guaranteed  to  pay  one  per  cent  dividends  a  month.  In  1901  he 
bought  the  Woman's  Farm  Journal  and  the  Woman's  National  Weekly* 
with  the  purpose  of  drawing  subscriptions  to  his  stock-selling  scheme  from 
women  readers.  He  paid  for  both  publications  chiefly  with  stock  in  his 
investment  company. 

GREAT   MAIL   ORDER    BANK. 

His  first  big  enterprise  came  in  1901  with  the  organization  of  the  Peo- 
ple's United  States  Bank.  This  was  to  transact  all  of  its  business  through 
the  mails.  Its  office  was  at  LTniversity  City,  a  suburb  of  St.  Louis.  Here 
Lewis  had  established  the  University  Heights  Realty  and  Development 
Company  and  the  Lewis  Publishing  Company.  The  bank  was  chartered 
under  the  laws  of  Missouri  in  November,  1904,  with  one  million  dollars 
capital  stock,  half  paid  up.  Lewis  subscribed  to  nine  thousand,  nine 
hundred  and  fifteen  out  of  ten  thousand  shares,  and  said  he  bought  the 
stock  with  his  own  money.  The  following  March  the  capital  was  increased 
to  two  and  one-half  millions,  with  two  millions  paid  up.  It  developed 
later  that  this  two  millions  had  been  entirely  subscribed  by  sixty  thousand 
persons  throughout  the  country,  mostly  women,  who  were  reached  through 
the  Woman's  Magazine  and  Farm  Journal. 

Complaint  was  made  to  the  Postoffice  Department  that  Lewis  was  using 
the  mails  to  defraud  in  connection  with  the  bank,  and  in  July,  1905,  a 
fraud  order  was  issued  against  the  bank. 

The  evidence  upon  which  the  postmaster-general  issued  the  fraud  order 
showed  that  Lewis  had  not  put  in  a  cent  of  his  own  money,  but  that  he 
had  received  and  held  as  payment  for  stock  two  million,  two  hundred  and 
ninety  thousand  dollars,  and  had  accounted  to  the  bank  for  only  two 
million,   two   hundred   thousand   dollars.      He   had    represented   that   there 


*EviclentIy   the   Woman's   Magazine    is   intended.      This   is   an    example   of    the    in- 
accuracies to  which  all  newspaper  stories  are  liable. 


60  THE  SIEGE  OF  UNIVERSITY  CITY 

were  seven  directors,  independent,  strong,  capable  men,  "standing  between 
the  intrigue  and  influence  of  the  cold-blooded  banking  business  and  the 
people's  money."  Investigation  showed  that  there  were  only  five,  and  they 
consisted  of  Lewis,  the  editor  of  his  magazine  and  three  employees  of  the 
publishing  company. 

Out  of  the  paid  up  capital  of  two  million  dollars  Lewis  lent  himself 
nine  hundred  thousand  dollars.  The  State  of  Missouri  finally  acted.  A 
receiver  was  appointed  in  August,  1905.  At  that  time  the  bank  had  about 
one  million  dollars  left.  Lewis  represented  to  the  stockholders  that  he 
was  the  victim  of  a  persecution  by  the  money  powers.  He  notified  all  the 
stockholders  that  no  one  should  lose  a  dollar.  He  would  assume  all  the 
loss. 

He  induced  them  to  send  him  their  stock  and  gave  them  in  return  his 
trustee  notes.  These  were  secured  by  a  trust  deed  on  his  income  above 
his  living  expenses.  He  then  increased  the  stock  in  his  publishing  company 
to  three  and  one-half  million  dollars  and  traded  it  for  bank  stock,  with 
the  residt  that  he  got  back  one  million,  seven  hundred  thousand  dollars 
ot  the  bank  stock.  When  the  receiver  finally  paid  eighty-five  per  cent 
on  the  ))ank  slock  Lewis  presented  what  he  had  and  got  a  half  million 
dollars  in  cash,  and  had  nine  hundred  thousand  dollars  of  his  notes  paid. 

MAGAZINE  WITH  REAL  ESTATE. 

In  1906  Lewis  started  a  daily  paper  called  the  Woman's  National  Daily. 
This  was  used  to  promote  various  new  schemes.  One  was  the  United  States 
Fibre  Stopper  Company.  This  was  to  manufacture  stoppers  of  paper  or 
fibre.  He  represented  that  the  English  rights  had  been  sold  for  half  a 
million  dollars.  This  proved  to  be  untrue.  The  stock  has  never  been 
worth  anything. 

In  1908  Lewis  announced  through  the  Woman's  Daily  a  so-called  "Read- 
ers' Pool."  Every  person  who  sent  in  five  dollars  in  subscri])tions  to  the 
paper  woidd  have  a  certificate  of  membership  in  the  pool.  Of  each  five- 
dollar  remittance  two  dollars  M-as  to  be  set  aside.  When  the  fund  grew 
large  enough  land  was  to  be  purchased   for  the  members. 

Finally  Lewis  announced  that  he  intended  to  close  the  pool  on  a  certain 
date.  He  urged  that  enough  be  sent  for  a  fifty-acre  lot,  to  cost  seventy- 
five  thousand  dollars.  When  the  time  was  up  I>ewis  said  he  had  more 
than  enough  to  buy  fifty  acres.  Since  that  time  the  members  of  the  pool 
have  been  unable  to  get  an  accormting,  to  find  out  how  much  land  was 
bought  or  what  was  jjaid   for  it. 

LEAGUE    TO    MAKE    WOMEN    RICH. 

Following  the  "Readers'  Pool"  came  the  most  pretentious  scheme  of 
all.  He  organized  the  American  Woman's  League  as  an  auxiliary  of  his 
publishing  company.  In  his  first  literature  he  proposed  it  as  a  scheme  for 
paying  his  debts. 

Membership  was  to  be  secured  by  sending  fifty-two  dollars'  worth  of 
subscri])tions  to  his  paper.  One-half  the  money  remitted  was  to  go  for 
subscriptions.  The  other  half  went  into  a  fund  for  the  benefit  of  the 
league  membership.  This  was  to  be  limited  to  one  million  persons.  It 
would  give  an  endowment  of  twenty-six  million  dollars.  The  league  was 
to  own  the  puldishing  com])any,  the  real  estate  and  a  bank.  It  would  have 
an  income  estimated  roughly  at  three  million,  eight  hundred  thousand 
dollars  a  year.  The  endowment  of  twenty-six  million  dollars  would  re- 
main undisturbed.  This  income  would  build  and  support  clubhouses  in 
all  parts  of  the  country;  estal)lish  a  free  university  with  instruction  from 
the  lowest  grades  to  the  highest,  and  in  all  professions;  found  an  old 
ladies'  home,  library,  orphanage  and  loan  and  relief  fund,  and  give  other 
benefits. 

As  a  bait  to  attract  women,  I^ewis  launched  the  Founders'  Chapter, 
to  be  composed  of  the  first  hundred  thousand  members  who  sent  in  fifty- 
two  dollars  each.    Men  could  get  in  for  twenty  dollars.    He  promised  one 


^University  City  Plaza  looking  eastward  down   Dclmar  Boulevard 

"Same  view  in  igos  7vhen  the  site  was  purchased  by  the  Lewis  Publishing  Company 

^Artist's  sketch  prior  to   erection  of  present   buildings 


Tanoraina  of  University  City,  showing  the  iml^ro-'cments  of  the  Lewis  Piihlishiiiji 
Comfiany  and  system  of  parkivays  laid  out  by  the  landscape  engineers  of  the  University 
Heights   Realty  &  Development   Company 

"Same  viciv  (in  part)  in  the  early  summer  of  l()04,  showing  the  above  grounds 
occupied  by   Camp  Lewis.     This  view  shows  the  condition   of  the   estates  of   the   Uni- 


n 


versify  Heights  Realty  &  Development  Company  ivhcn  first  purchased  by  .he  Develop- 
ment &  Investment  Company.  This  tract  was  then  far  beyond  the  extreme  outskirts 
of  the  residence  district  of  St.  Louis.  Land  development  and  building  activities  even 
farther  westward  are  now  rapidly  proceeding  both  to  the  north  and  south  of  this 
location 


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THE  DREYFUS  CASE  OF  AMERICA  65 

million  dollars  of  publishing  company  stock.  He  said  this  endowment 
would  pay  one  million  dollars  the  first  year  and  several  times  that  there- 
after. 

Last  year  the  league  was  announced  to  have  twenty-six  thousand  life 
members  at  fifty-two  dollars  each.  This  would  have  made  a  fund  of  one 
million,  three  hundred  and  fifty-two  thousand  dollars.  Last  fall,  after 
persistent  demands  for  an  accounting,  Lewis  said  he  had  received  only 
some  eight  hundred  and  ninety  thousand  dollars.  He  had  paid  out  over 
one  million  dollars.  Nothing  came  of  the  great  educational  university 
except  correspondence  lessons  from  three  existing  concerns  with  which 
Lewis  had  contracted.  The  league  is  now  said  to  have  nothing  but  an 
indebtedness  of   about  two  million  dollars. 

Last  summer,  when  Lewis  had  defaulted  on  the  notes  of  all  his  enter- 
prises, including  his  trustee  notes,  and  money  had  quit  coming  into  the 
league,  he  had  a  "hurrah  for  Lewis"'  meeting  in  this  city.*  He  insisted 
that  every  one  of  his  schemes  had  proved  a  fortune  maker,  and  boasted 
of  eight  million  dollars  of  assets,  with  liabilities  of  only  one-third  of  that 
amount.  He  said  that  if  a  building  fund  of  two  and  one-half  million  dol- 
lars could  be  raised  all  his  enterprises  could  be  financed.  He  proposed 
to  issue  debentures  against  this  fund,  and  in  spite  of  past  experiences 
the  women  gave  up  one  and  one-half  million  dollars  more  for  debentures. 

From  these  schemes  the  postoifice  authorities  estimate  that  Lewis  had 
taken  in  ten  million  dollars.  He  is  still  optimistic.  He  hopes  to  have 
his  trial  set  down  for  the  week  of  October  23,  when  the  American  Woman's 
League  is  to  have  its  convention  m  St.  Louis. 

"My  trial  v>'ill  draw  twenty-five  thousand  more  women  than  the  con- 
vention," he  says. 

LEWIS  AND   HIS   PUBLICATIONS. 

Occasionally  a  newspaper  paragrapher  attempts  to  sum  up  the 
Lewis  case  by  means  of  a  signed  article.  The  writer  of  the  follow- 
ing extract  from  the  Houston  (Texas)  Chronicle  appears  to  have 
attempted  to  inform  herself,  by  examination  of  the  Lewis  publica- 
tions and  by  reference  to  the  original  documents  of  the  Postoffice 
Department.  This  story,  headed  "Lewis  and  His  Publications,"  by 
Miss  Grace  Phillips  is  a  good  illustration  of  the  difficulty  of  grasp- 
ing the  true  facts  of  the  Lewis  case  from  sources  of  information 
hitherto  available. 

There  is  no  doubt  that  the  arbitrary  power  vested  in  the  postmaster- 
general  by  the  Postoffice  Department  is  dangerous.  So  is  the  power  of 
the  President  as  commander-in-chief  of  the  army  and  navy,  or  that  of 
congress  to  declare  war  or  coin  money.  It  is  expected  in  all  three  cases  that 
this  power  will  be  exercised  with  discretion  and  judgment.  There  are  few 
cases  on  lecord  where  it  has  not  been.  That  of  E.  G.  Lewis  is  most  cer- 
tainly not  an  exemplification  of  the  latter.  This  is  shown  by  his  own 
publications. 

I  knew  the  Woman's  Magazine  as  a  clean,  attractive  little  monthly.  It 
was  printed  on  fairly  good  magazine  paper,  and  embellished  with  many 
cuts.  Its  covci-  pages  compared  favorably  with  those  of  most  magazines, 
whose  single  copy  cost  as  much  or  more  than  the  Woman's  Magazine  for 
the  year.  It  was  utterly  out  of  the  question  to  suppose  that  the  cost, 
five-sixths  of  a  cent  per  copy,  paid  more  than  tlie  expense  of  sending  it 
out.  I  remember,  also,  the  first  picture  I  saw  of  the  home  of  the  Woman's 
Magazine   and   its  curving   marble   stairway.     After   that  there   wasn't   so 


"This  phrase  is  a  clear  "give  away."  It  shows  that  this  article  although  printed 
as  a  news  item  from  Washington  in  the  Boston  Herald  was  actually  prepared  in  some 
newspaper  office  in  St.  Louis.     By  whom  or  for  what  reason,  can  only  be  conjectured. 


66  THE  SIEGE  OF  UNIVERSITY  CITY 

very  much  to  remember,  except  University  City,  the  publishing  house,  and 
those  marble  stairways.  It  was  about  this  time  the  "persecutions"  by  the 
Postoffice   Department   began. 

The  Daily  started  the  same  way — first  as  a  general  newspaper  at  one 
dollar  per  year.  It  was  readable,  general  in  scope  and  clean  in  contents, 
and  must  have  been  a  godsend  to  tens  of  thosands  of  families  who  had 
never  before  subscribed  to  a  daily  paper,  and  who,  probably,  otherwise 
never  would  ha,ve  been  able  to  do  so.  As  in  the  case  of  the  Magazine,  it 
was  utterly  useless  to  suppose  that  the  cost  of  the  Daily,  one-third  of  a 
cent,  more  than  paid  for  sending  it  out.  Its  revenue  came  also  from  Uni- 
versity City.  It  exploited  in  turn  the  People's  Bank,  the  People's  Savings 
Trust  Company,  the  I.eague,  the  Realty  Company,  the  University,  the  Daily 
itself,  the  Fibre  iS topper  Company,  the  Readers'  Pool  and  the  Debenture 
scheme,  all  originating  in  and  centreing  around  that  little  St.  Louis  suburb 
and  forty-year-old  Mr.  Lewis  himself. 

I  have  not  the  sliglitest  desire  of  disparaging  any  good  Mr.  Lewis  may 
have  intended  to  do.  But  as  he  started,  according  to  his  own  statement, 
with  less  than  five  dollars  a  few  years  ago  in  St.  Louis,  and  is  now  writing 
about  his  millions,  and  this  without  a  day  of  manual  labor,  we  realize  that 
he  must  have  made  this  out  of  the  labor  of  many  other  working  people. 
Let  us  see  who  these  are:  He  has  gotten  from  American  women  ten  mil- 
lion dollars  in  the  last  ten  years.  And  this  is  how  he  obtained  it.  It  is 
difficult  in  speaking  of  Mr.  Lewis  to  talk  of  less  than  millions,  but  truth 
and  a  desire  for  consistency  impel  me  to  mention  that  liis  first  plan  for 
saving  womankind  from  the  rapacious  claws  of  capitalized  wealth  v/as  an 
endless  chain  letter.  Each  recipient  was  to  send  ten  cents  for  ten  more 
circular  letters.  These  they  were  to  mail.  The  proposal  was  that  when 
the  chain  was  complete  the  sender  of  the  dime  shoukl  receive  a  thirty- 
dollar  watch  or  bicycle.  The  PostofBce  Department  stepped  in  and  broke 
the  chain.  In  retaliation,  I  suppose,  for  not  receiving  the  watch  or  wheel, 
they  have  been  hounding  Mr.  Lewis  ever  since. 

When  this  was  stopped  his  publishing  proclivities  took  concrete  and 
active  form.  Then  the  Woman's  Magazine,  a  circular  letter  for  the  Peo- 
ple's Bank,  was  started.  Out  of  the  ten  thousand  shares  of  stock  issued 
Lewis  held  all  but  eighty-five  at  the  time  of  organization.  Complaint  was 
soon  made  that  this  bank,  through  Mr.  Lewis,  was  using  the  second-class 
mailing  privileges  fraudulently — that  is,  for  soliciting  money  for  bank 
stock  of  an  unsafe  institution.  A  hearing  was  held  by  the  Postal  De- 
partment. Upon  recommendation  of  the  assistant  attorney-general  for  the 
Postoflice  Department,  and  after  the  attorney-general  of  the  United  States 
had  rendered  an  opinion  it  issued  the  now  famous  fraud  order. 

Here  are  some  of  the  things  the  Department  found:  In  soliciting  sub- 
scriptions Lewis  represented  that  he  himself  would  take  and  pay  for  one 
million  dollars  of  the  stock.  The  board  of  directors  would  be  composed 
of  seven  strong  financial  men.  The  directors  could  not  and  would  not 
loan  either  to  themselves  or  the  president,  Mr.  Lewis,  a  single  dollar 
of  the  bank's  funds.  The  Supreme  Court  of  Missouri  appointed  a  receiver 
and   closed   tliis   bank.     In  their  decision  they  say: 

"How  were  these  sensible  and  practical  promises  kept  and  performed 
by  the  corporation?  Indifferently  well,  it  must  be  admitted.  For  example, 
the  bank  was  organized  with  a  directorate  comjiosed  of  I.ewis  and  nominal 
stockholders,  Lewis  underlings  at  that,  i.  e.,  men  subordinate  to  him  in 
his  other  enterprises — mere  vestpocket  cor]X)rations  of  his — with  not  a 
banker  in  the  lot,  and  within  a  few  months  of  its  organization  nearly  a 
million  dollnrs  of  its  capital  is  found  loaned  to  the  said  publishing  com- 
pany, thus  doing  exactly  what  he  had  promised  should  not  be  done." 

Tlie  evidence  showed  the  following  frenzied  financiering:  On  the  day 
after  the  postal  inspectors  began  their  investigation,  Lewis  deposited  as 
assets  of  the  bank  two  notes  for  two  hundred  thousand  dollars  to  cover 


THE  DREYFUS  CASE  OF  AMERICA  67 

money  expended  by  himself.  One  of  these  notes,  for  fifty  thousand  dol- 
hirs,  was  unsecured.  The  other,  for  one  hundred  and  fifty  thousand  dol- 
lars, was  signed  by  employees  of  his.  At  the  time  the  capital  of  the  bank 
amounted  to  two  million  dollars  Lewis  had  appropriated  for  his  ov/n  in- 
vestments over  nine  hundred  thousand  dollars,  invested  forty-five  thousand 
dollars  in  stocks  of  his  own  enterprises  and  had  agreed  to  loan  sixty-five 
thousand  dollars  on  an  unsecured  note. 

This  article  then  closed  with  a  discussion  in  similar  vein  of  the 
American  Woman's  League  and  a  warning  to  the  women  of  Houston 
who  were  interested  to  beware  of  that  organization. 

IS  BANKER  LEWIS  FRAUD  OR  VICTIM? 

The  story  of  the  People's  United  States  Bank,  for  reasons  which 
will  appear,  resulted  in  enormous  newspaper  publicity.  The  follow- 
ing news  item,  from  the  Chicago  News  of  July  11,  1905,  under 
the  caption,  "Is  Banker  Lewis  Fraud  or  Victim,"  was  among  the 
first  serious  discussions  in  the  great  out-of-town  dailies  immediately 
after  the  fraud  order  was  issued.  The  following  headlines  are  char- 
acteristic of  the  sensational  manner  in  which  the  story  has  been  most 
commonly  handled. 

"Is  Banker  Lewis  Fraud  or  Victim"?  "Romance  of  Rise  of  People's 
United  States  Bank  is  a  Fairy  Tale  in  Realm  of  Finance."  "Lures  Vast 
Hidden  Funds."  "Promoter  Feels  Heavy  Hand  of  Stern  Postal  Authori- 
ties, but  Still  Retains  His  Superb  Nerve." 

In  "going  after  the  money  in  socks  and  under  carpets,"  E.  G.  Lewis, 
promoter  of  the  People's  United  States  Bank  of  St.  Louis,  discovered  wealth 
greater  than  that  in  gold  mines.  The  gold  turned  up  by  his  remarkable 
prospecting  is  in  coin  and  good  paper  of  the  realm. 

How  he  lured  two  million,  four  hundred  thousand  dollars  from  the  pock- 
ets of  frugal  and  suspicious  rural  folk  makes  a  story  which  is  a  climax 
to  liis  daring  \entures  in  the  magazine  field.  His  publication,  the  Woman's 
Magazine,  has,  according  to  postoffice  receipts,  a  circulation  of  one  million, 
six  hundred  thousand.  His  Woman's  Farm  Journal  has  a  circulation  of 
seven  hundred  thousand.  He  sends  either  of  his  papers  for  ten  cents  a 
year.  In  six  years  he  has  built  up  his  business  from  an  original  modest 
capital  of  one  dollar  and  twenty-five  cents. 

OF  TIRELESS   EXERGY. 

This  was  not  enough  for  Lewis'  tireless  energy.  He  also  engaged  in 
the  real  estate  business  on  a  large  scale.  He  invented  a  coin  slot  machine 
for  telephones  and  a  rapid  addressing  machine.  He  started  a  bank  which 
within  a  few  months  had  a  paid-up  capital  of  more  than  two  million  dol- 
lars. 

All  the  banlc  stock  was  sold  through  advertising  in  his  magazines.  His 
readers,  with  few  exceptions,  live  in  small  towns  and  the  rural  districts. 
They  have  been  taught  to  look  up  to  Editor  Lewis  as  an  oracle,  a  financier 
of  the  greatest  ability,  and  a  man  whose  honor  is  not  to  be  questioned. 
In  answer  to  his  advertisements  he  received  one  remittance  of  five  hundred 
dollars  from  a  man  in  Pennsylvania.  The  money  was  in  twenty-dollar 
gold  pieces.  It  was  wrapped  in  old  newspapers  and  bound  up  with  an 
old  pair  of  suspenders.  The  letter  accompanying  this  deposit  informed 
the  banker  that  it  was  the  result  of  seventeen  years'  frugality. 

FEARED  TO  TRUST  JAKE    JOXES. 

"I  send  you  this  money,"  wrote  another  purchaser  of  stock,  "because 
Jake  Jones,  who  runs  the  home  bank  here,  robbed  my  apple  orchard  when 
he  was  a  boy,  and  I  am  afraid  to  trust  him." 

Another  man  said  he  was  glad  to  have  a  chance  to  deposit  his  money 
in  a  St.  Louis  bank.     His  letter  said: 


68  THE  SIEGE  OF  UNIVERSITY  CITY 

"Bill  Applegate  keeps  books  in  the  bank  here,  and  I  know  if  I  put 
my  money  in  there  lie  will  tell  everybody   in  town  how  much   I've  got." 

He  has  taught  each  of  the  stockholders  to  speak  and  write  of  the  bank 
as  "our"  bank. 

Lewis  not  only  imcovered  secret  hordes  in  country  homes.  He  also 
Had  a  design  to  enlist  co-operation  by  coimtry  bankers.  He  planned  to 
have  his  certified  checks  on  sale  at  country  banks  throughout  the  country, 
and  even  in  all  foreign  countries.  His  scheme  was  to  supply  banks  with 
his  certified  cliecks,  to  be  used  to  remit  money  through  the  mails.  The 
countrj'  Ijankev  was  to  sell  the  clieck  and  deposit  the  amount  received  in 
his  own  bank  to  the  credit  of  the  People's  United  States  Bank  at  three 
per  cent. 

Cliicago  mail  order  houses  have  already  begun  to  feel  the  influence  of 
the  bank,  and  within  the  last  few  months  thousands  of  dollars  have  been 
remitted  by   that  method. 

ST.   LOUIS  BOWED  DOWN. 

During  the  St.  Louis  Exposition  the  Lewis  Publishing  Company  kept 
open  house  in  its  new  building  near  the  exposition  grounds.  It  nuiintained 
a  camp  for  its  subscribers  at  a  cost  of  sevent,T-five  thousand  dollars,  and 
its  searchlight  attracted  attention  from  all  visitors.  St.  Louis  spoke  of 
Lewis  as  its  coming  man.  Until  the  Government  discovered  alleged  fraud 
in  his  bank,  Lewis  was  considered  a  great  and  honorable  financier  by 
thousands  of  his  fellow  townsmen.  He  is  thirty-five  years  old.  Since  he 
graduated  from  college  he  has  been  engaged  in  publication  ventures.  One 
after  another  failed  before  he  started  the  Woman's  Magazine.  For  this 
he  secured  subscribers  at  such  a  rapid  rate  by  the  endless  chain  system 
that  there  were  not  presses  of  sufficient  capacity  in  St.  Louis  to  turn  out 
the  required  number  until  he  set  up  his  new  plant  near  the  exposition. 

LEWIS,    THE    FINANCIER. 

That  the  same  theme  has  lent  itself  to  the  service  of  the  editorial 
leader  writer  is  apparent  from  the  following  excerpt  from  the  Min- 
neapolis Times,  of  July  14,  1905,  entitled  "Lewis,  Financier." 

Is  E.  G.  Lewis,  of  the  People's  United  States  Bank  of  St.  Louis,  a 
fraud,  a  genius,  or  an  abused  man?  That  he  may  have  been  a  fraud  re- 
mains to  develop.  That  he  was  a  genius  of  the  Rockefeller  order  is  cer- 
tain.    That  he  was  an  abused  man  is  possiI)Ie,  but  hardly  probable. 

Aladdin's  lamp  never  produced  more  remarkable  things  than  did  this 
same  Len-is,  when  he  brought  two  million,  four  hundred  thousand  dollars 
from  the  stockings,  the  carpets,  mattresses  and  other  mone,v-hiding  places 
of  the  rural  population  of  many  states.  The  owners  of  these  millions  are 
naturally  the  most  suspicious  and  at  the  same  time  the  most  gullible  of 
victims.  But  in  these  days  they  are  learning  caution  and  demand  to  be 
shown. 

That  Lewis  was  a  publisher  of  great  ability  is  not  questioned.  Had  he 
avoided  the  bank  idea  and  stuck  to  the  publishing  business  he  might  have 
made  his  pile  in  a  few  years.  Starting  six  years  ago  with  a  capital  of 
one  dollar  and  twenty-five  cents,  Mr.  Lewis  has,  in  the  interim,  built  up 
two  monthly  magazines,  one  with  a  circulation  of  one  million,  six  hundred 
thousand,  tiie  AVoman's  Magazine,  and  the  other,  the  Woman's  Farm  Jour- 
nal, with  seven  hundred  thousand  average  circulation.  This  is  a  business 
record  that  stamps  Lewis  as  a  circulation  builder  of  rare  ability.  There 
is  hardly  a  daily  paper  in  America  that  would  not  pay  him  a  big  salary. 

This  thirty-five-year-old  man,  Lewis,  was  one  of  the  ornaments  of  St. 
Louis.  His  townspeople  considered  him  the  legitimate  successor  of  Rus- 
sell Sage  before  the  developments  that  led  to  his  downfall. 

Lewis  has  not  accepted  the  interference  of  the  Government  with  good 
grace;  he  has  even  secured  a  temporary  injunction  against  the  Postoffice 
Department,   preventing  the   stamping  of   his   mail   "fraudulent,"   and   its 


THE  DREYFUS  CASE  OF  AMERICA  69 

return  to  senders.     He  will  try  to  make  good  his  claim  to  purity  in  busi- 
ness.    Verily,  the  days  of  miracles  are  not  over. 

WILD-CAT  FINANCIERING. 

The  following  editorial,  entitled  "Wildcat  Financiering,"  from 
the  New  York  Commercial,  was  reprinted  by  the  Peoria  (Illinois) 
Herald-Transcript  of  July  12,  1905.  It  affords  a  good  illustration 
of  the  manner  in  which  news  items  and  editorial  opinions  are  dif- 
fused by  republication  throughout  the  rank  and  file  of  the  daily  and 
weekly  press. 

Another  brilliant  example  of  wildcat  financiering  has  come  to  light  in 
the  aifairs  of  the  failed  People's  United  States  Bank  of  St.  Louis.  Con- 
fiding depositors,  on  the  very  best  showing  that  the  receiver  can  make  in 
his  estimates,  will  lose  six  hundred  thousand  dollars.  The  total  amount  of 
paid-up  subscriptions  and  stock  was  two  million,  four  hundred  and  thirty- 
five  thousand  dollars.  This  immense  sum  was  gathered  in  by  one  Edward 
G.  Lewis,  who  was  a  money-maker  of  the  most  earnest  modern  variety. 
He  succeeded  with  a  mail  order  magazine  and  forced  its  circulation  up 
beyond  the  dreams  of  the  regular  weeklies  and  monthlies.  Money  seemed 
so  plentiful  and  so  easy  to  take  that  Lewis  deemed  it  a  sin  to  permit  it 
to  lie  around  loose  in  the  hands  of  incompetent  owners.  So  he  started 
a  bank  and  gave  the  people  who  read  about  it  in  his  magazines  the  privi- 
lege of  becoming  their  own  bankers.  Everybody  would  be  part  owner  of 
a  bank!  Oh,  inestimable  privilege!  And  Lewis  was  right.  Thousands 
bought  stock,  and  then  deposited  their  remaining  change  in  their  own  bank. 
Such  a  privilege ! 

Lewis  was  the  man  behind  the  bank,  so  to  speak.  As  the  golden  stream 
came  into  the  People's  Bank  from  the  people,  he  "took  what  he  wished  and 
left  the  rest,"  as  Kipling  lias  put  it.  He  might  have  gotten  it  all,  indeed, 
in  course  of  time,  had  not  some  one  stumbled  onto  his  ingenious  scheme 
of  financiering.  Hence,  the  court  proceedings — and  the  subsequent  loss  to 
investors. 

The  St.  Louis  concern  with  the  high-sounding  title  was  presumed  to  be 
owned  by  the  people  who  bought  the  stock.  It  really  was  a  one  man  bank. 
All  that  came  to  the  mill  was  grist  for  Lewis.  Are  more  examples  of 
crookedness  required  to  awaken  oificers  to  a  proper  sense  of  their  duty? 

FANATICAL  FINANCE. 

The  Post-Dispatch  of  St.  Louis  is  the  representative  in  that  city 
of  the  Associated  Press,  unquestionably  the  most  powerful  organ  of 
publicity  in  the  world.  The  motives  of  that  newspaper  in  its  dis- 
cussion of  the  subject  of  this  story  will  appear  hereafter.  Here  it  is 
sufficient  to  observe  how  admirably  the  following  Sunday  supple- 
ment feature,  originally  printed  under  the  caption  "Fanatical 
Finance,"  lends  itself  to  the  out-of-town  newspaper  paragrapher  in 
search  of  the  sensational  for  interesting  copy.  Newspaper  psychol- 
ogy is  unerring  in  its  selection  of  a  point  of  contact  with  the  com- 
mon mind.  Every  reporter  and  editor  instantly  perceives  that  the 
personality  of  Lewis  is  the  central  issue.  Observe  how  this  story  is 
handled  so  as  to  throw  the  biography  of  the  hero — or  as  Lewis  is 
here  regarded,  the  villain — into  high  relief. 

Edward  G.  Lewis,  five  feet  five  inches  tall,  who  five  years  ago  came  to 
St.  Louis  selling  "Anti-Skeet,"  is  the  newest  prophet  of  that  cult  which 
teaches  the  gospel  of  get-rich-quick. 

In  five  years,  from  a  start,  if  his  own  statement  is  to  be  accepted,  of 
one  dollar  and  twenty-five  cents,  he  has  risen  to  a  position  of  leadership 


70  THE  SIEGE  OF  UNIVERSITY  CITY 

which,  according  to  the  statements  of  a  receiver,  a  banli  examiner  and 
others,  will  cost  his  followers  in  one  enterprise  alone  six  hundred  thousand 
dollars. 

He  did  it  all  by  a  vigorous  campaign  of  promising  much  for  little. 
He  pointed  to  one  venture  which  was  a  success,  and  declared  an  original 
investment  of  five  dollars  in  that  venture  would  have  netted  the  investor 
five  thousand  dollars. 

Tiiat  was  enougli. 

The  cupidity  of  the  credulous  ones  was  aroused.  From  old  stockings, 
old  pots  and  kettles  and  old  holes  in  the  floors  there  came  pouring  in  to 
him  a  total  of  approximately  two  million,  seven  hundred  thousand  dollars 
in  less  than  a  year. 

Lewis  l^ecame  a  deity  in  the  minds  of  his  fanatical  worshipers.  They  did 
not  question  his  remarkable  statements.  They  asked  for  nothing,  except 
permission  to  "get  in  on  the  ground  floor" — and  they  took  no  thought  of 
the  fact  that  the  man  on  the  ground  floor  is  in  the  greatest  danger  when 
the  superstructure  collapses. 

LEWIS    LIKE    DOWIE. 

Lewis,  in  tlie  field  of  Fanatical  Finance,  is  much  on  the  order  of 
Dov>ie. 

He  is  not  like  Arnold  and  Ryan  and  Major  Dennis  and  others  of  the 
strictly  get-rich-quick  concerns  which  flourished  before  him,  except  in 
his  long  reach  for  cash  and  his  power  to  drag  it  from  the  secret  hiding 
places  of  men  and  women  all  over  the  country.  He  is  more  like  Dowie 
in  that  his  followers  believed  in  him  fully,  and  that  all  but  a  very  small 
percentage  of  them  seemingly  refused  to  doubt  him,  even  after  the  post- 
office  and  -state  investigations  had  been  started. 

Lewis'  words — and  he  is  a  prolific  word-monger — were  believed  by  his 
more  than  a  million  followers.  Lewis'  building — a  towering  structure  of 
ornate  and  attractive  design,  set  high  on  a  hill  where  twelve  million 
World's  Fair  visitors  could  not  help  seeing  it — lingers  in  their  memory 
as  a  temple.  Lewis'  promises  of  great  wealth  from  little  risk  whisper 
pleasantly,  despite  the  din  produced  by  the  relation  of  facts. 

And  therefore  Lewis'  followers  kept  on  digging  more  deeply  into  their 
old  socks,  their  old  pots  and  kettles  and  their  old  holes  under  their  floors 
to  get  move  money  to  send  him,  even  after  tlie  fact  of  State  and  Federal 
action  was  generally  known. 

Since  the  issuance  of  the  postal  fraud  order  Lewis  has  received  a 
large  sui.i  of  money  which  he  has  turned  over  to  the  receiver  for  his 
bank. 

POWER    OF    PROJIISE. 

In  lifting  himself  into  his  present  position,  Lewis  relied  almost  wholly 
upon  the  Power  of  Promise.  This  gave  him  his  start,  and  his  graduation 
from  "Anti-Skeet"  to  the  Woman's  Magazine,  the  University  Heights  In- 
vestment and  Development  Company,  a  half-dozen  other  concerns,  and 
finally  the  most  gigantic  of  them  all — ^the  People's  LTnited  States  Bank. 

With  the  Power  of  the  Promise,  employed  vigorously  through  the  col- 
umns of  his  magazine,  whose  cheap  price  gave  a  wide  circulation  in 
homes  where  few  or  no  other  publications  entered,  he  lifted  the  lids  on 
remote  family  strong  boxes,  and  attracted  a  golden  stream  to  the  Lewis 
coffers. 

He  pointed  to  his  building,  or  to  the  picture  of  it,  and  said: 

"See  what  one  dollar  and  twenty-five  cents  has  done  under  my  manage- 
ment in  five  years.  Give  me  your  dollars  and  quarters  and  I  will  make 
them  multiply  even  as  my  own  has  done." 

And  the  money  came, 

MAKE    "plain    people"   A    POWER. 

And  thus  would  the  plain  people — those  from  the  headwaters  of  the 
creeks,  the  necks  of  the  woods,  the  remote  fastnesses  of  the  forests  and  the 


THE  DREYFUS  CASE  OF  AMERICA  71 

isolated  localities  of  plantation  and  range  and  field,  become  the  real 
money-power  of  the  Nation,  if  not  of  the  world. 

Their  bank  would  be  the  most  powerful  in  history;  its  support  would 
be  sought  before  any  great  thing  was  done;  its  help  would  be  solicited 
ere  any  powerful  railroad,  any  great  financier,  or  the  Government  itself, 
undertook  a  great  enterprise. 

Did  J.  Pierpont  Morgan  desire  to  startle  the  world  by  some  Titanic 
performance  in  finance?  His  first  step  would  be  negotiations  with  the 
People's  Bank — the  bank  owned  by  the  people  who  heretofore  had  never 
been  considered,  much  less  consulted,  when  anything  was  being  done. 

Did  the  Government  want  to  issue  bonds  for  some  gi*eat  undertaking? 
The  bank  which  held  the  money  that  came  from  old  stockings,  old  kettles 
and  pots  and  old  holes  under  the  floor  would  have  to  be  consulted  in 
advance. 

MILLIOKS    IN   IT. 

And  notice  was  served  that  the  People's  Bank  would  not  lose  money 
through  the  power  it  thus  held.  It  would  make  a  profit  on  evervthing, 
and  this  profit  would  go  into  the  purses  of  the  farmers,  the  farmers' 
wives,  the  small  merchants  and  mechanics,  the  clerks  and  stenographers 
whose  wise  acceptance  of  opportunity  to  combine  their  wealth  had  placed 
them  in  the  position  of  financial  dictators  of  America. 

Were  tliere  doubters?  There  loomed  before  them  a  photograph  of  the 
Woman's  Magazine  Building,  and  this  statement: 

"Great  office  building  of  the  Woman's  Magazine  and  Woman's  Farm 
Journal  (Lewis  Publishing  Company)  erected  for  cash,  without  mortgage 
or  lien,  at  a  cost  of  over  half  a  million  dollars,  in  five  years,  from  a  start 
of  one  dollar  and  twenty-five  cents.  This  shows  what  can  be  done  if 
enough  people  combine  to  do  it,  even  at  ten  cents  per  year  each." 

I^wis  preaciied  this  gospel  of  great  wealth  for  the  common  people, 
if  they  would  send  him  their  money,  with  a  persistency  and  insistence 
which  could  not  be  excelled. 

He  preached  it  with  a  gigantic  searchlight  mounted  on  the  top  of  his 
building  and  flashing  its  gleam  into  the  faces  and  memories  of  all  World's 
Fair  visitors  and  all  others  M'ho  were  within  a  radius  of  forty  miles.  He 
preached  it  with  the  vociferous  voice  of  his  magazines  with  their  enor- 
mous circulations.  He  preached  it  with  pamphlets  and  letters  and  circu- 
lars. He  preached  it  through  the  tongues  of  his  followers,  each  of  whom 
became  a  disciple  who  was  not  afraid  to  let  his  voice  be  heard. 

The  searchlight  was  a  flame  into  which  the  moths  dashed.  The  voice 
was  a  siren  song.  It  lured  them  to  linger  and  forget  their  pain  even 
while  they  were  being  scorched. 

lewis'  vast  exploits  of  the  last  ten  years. 
The  number  and  variety  of  Lewis'  interests  and  enterprises  have 
always  appealed  to  the  newspaper  men  as  "good  copy."  Numerous 
compilations  have  been  published.  The  first  attempt  was  part  of 
the  great  "scoop"  published  by  the  St.  Louis  Post-Dispatch  on  May 
31,  1905.  It  was  based  on  information  compiled  by  postofEce  in- 
spectors. The  Post-Dispatch  widely  heralded  this  story  as  a  "beat," 
or  exclusive  article,  secured  in  advance  of  other  St.  Louis  newspa- 
pers. This,  coupled  with  tlie  sensational  nature  of  the  story,  at- 
tracted the  universal  attention  of  exchange  editors.  Clipped  and 
filed  away  in  the  morgues  of  the  principal  newspapers,  it  has  be- 
come the  source  of  many  subsequent  articles.  The  following  para- 
graphs, under  the  subhead  "Lewis'  Vast  Exploits  of  the  Last  Ten 
Years,"  are  but  a  small  fraction  of  the  original  Post-Dispatch  story. 
The  remainder  will  appear  in  due  course  hereafter. 


72  THE  SIEGE  OF  UNIVERSITY  CITY 

According  to  information  compiled  by  postoffice  inspectors,  it  is  stated 
that  in  August,  1895,  Lewis  was  in  NashvilJe,  Tenn.,  selling  a  tablet  com- 
posed of  saltpeter  and  insect  powder,  a  mosquito  preventive.  It  was  said 
that  he  was  badly  in  debt,  and  that  a  certain  Howard  E.  Nichols  loaned 
hnn  one  Imndied  and  fifty  dollars,  and  agreed  to  exploit  the  business 
in  Memphis.  Having  some  success,  Lewis  organized  a  company,  but 
shortly  afterwards  the  business  failed,  and  was  taken  charge  of  by  the 
sheriff. 

A  preparation  for  perspiring  feet  and  a  tooth  powder  started  by  Lewis 
and  Nichols,  who  had  been  associated  with  him  in  Tennessee  and  in  the 
Diamond  Candy  Company,  enjoyed  good  sales  one  summer,  but  after  that 
died  out. 

The  Progressive  Watch  Company  was  started  in  October,  1898,  with 
a  plan  to  sell  watches  on  an  endless  chain  system.  This  business  was  not 
profitable.  About  April  1,  1899,  the  Postoffice  Department  denied  this 
company  the  use  of  the  mails,  issuing  a  fraud  order. 

The  Winner  Magazine  was  then  started.  The  Progressive  Watch  Com- 
pany, then  known  as  the  IMail  Order  Publishing  Company,  was  merged 
into  the  Winner  Magazine.  Soon  the  National  Installment  Company  was 
started.  This  was  a  scheme  to  sell  jewelry  on  the  installment  plan.  The 
plan  did  not  pay,  and  v/as  dropped. 

The  Development  and  Investment  Company  followed  this.  This  com- 
pany, it  is  alleged,  was  designed  as  a  holding  company  for  the  various 
other  companies  operated  by  Lewis,  or  to  be  later  started  by  him.  Some 
money  was  made  in  this,  the  profits  going  to  pay  the  debts  of  the  Winner 
Magazine. 

In  1901  Lewis  obtained  five  thousand  dollars  from  a  St.  Louis  business 
man,  a  part  of  which  was  used  in  mailing  a  first  payment  on  the  purchase 
price  of  the  Woman's  Farm  Journal,  and  the  remainder  in  paying  the 
debts  of  the  Winner  Magazine.  The  Journal  was  owned  by  F.  J.  Cabot, 
who  is  now  interested  in  the  Lewis  magazines  and  in  the  bank.  The 
remainder  of  the  purchase  price  was  paid  Cabot  in  stock  of  the  Develop- 
ment and  Investment  Company. 

Nichols  and  Lewis  separated  May  12,  1903.  Since  that  time  Lewis  has 
organized  and  incorporated  the  University  Heights  Realty  Company,  AUen 
Steam  Trap  Company,  Lewis  Publishing  Company,  United  States  Fibre 
Stopper  Company,  California  Vineyards  Company,  Camp  Lewis,  Baclielor 
Pneumatic  Tube  Company,  the  World's  Fair  Contest  Company,  and  the 
People's  United  States  Bank.  He  has  increased  the  capital  stock  of  the 
American  Coin  Controller  Company,  the  Development  and  Investment  Com- 
pany, and  the  People's  United  States  Bank. 

THE  SCHEMES  OF  E.  G.  LEWIS. 

Everyone  has  doubtless  played  the  game  of  Rumor  or  Scandal, 
whereby  one  person  of  the  company  whispers  a  story  to  his  neigh- 
bor. He  in  turn  whispers  his  understanding  of  the  same  story  to  a 
third,  and  so  on  around  the  circle.  The  last  person  in  order  tells 
the  story  aloud,  usually  to  the  astonishment  of  all  present.  All  who 
have  tried  this  experiment  will  appreciate  the  humor  in  the  develop- 
ment of  the  paragraphs  just  given  from  the  Post-Dispatch  in  1905, 
to  the  following  article  from  the  St.  Louis  Censor,  a  St.  Louis  week- 
ly of  local  circulation.  An  analysis  of  this  article  shows  traces  of 
the  newspaper  story  of  Lewis'  early  days  from  the  Hartford  Globe, 
of  the  Post-Dispatch  stories  based  upon  the  postoffice  inspectors'  re- 
ports, and  of  many  similar  sources  of  information.  On  comparison 
with  the  facts  concerning  Lewis'  various  incorporations,  the  follow- 


THE  DREYFUS  CASE  OF  AMERICA  73 

ing  lists  will  be  found  to  shrink  by  approximately  two-thirds.  The 
sardonic  humor  of  the  accompanying  paragraphs,  entitled  "The 
Schemes  of  E.  G.  Lewis;  Being  a  Complete  Review  of  His  Many 
Promotions/'  will  then  be  apparent. 

That  old  saw,  "fact  is  stranger  than  fiction,"  is  borne  out  every  day  in 
the  vario-.is  Lewis  cases.  If  the  prototype  of  this  man  had  been  introduced 
to  the  public  as  the  hero  of  a  Chesterton  novel  the  author  would  have 
been  ridiculed  for  his  exaggeration.  I  have  compiled  a  list  of  Lewis'  many 
promotions,  and  I  am  certain  the  reader  will  marvel  at  the  versatility 
shown  by  the  promoter.  This  list  was  obtained  after  some  trouble.  It  is 
authentic,  and  is  as  nearly  chronological  as  possible.  Moreover,  it  is  pub- 
lished in  the  Censor  for  the  first  time: 

CORROCO  TABLETS:  A  preparation  made  and  sold  by  Lewis  while 
he  was  a  student  at  Trinity  College.  It  was  a  cure  for  the  tobacco  habit. 
Appealed  especially  to  women,  who  could  put  tablets  in  coffee  without  hus- 
bands, sons  or  brothers  suspecting  its  presence. 

SARSAPARILLA  BLOOD  MEDICINE:  Lewis  manufactured  and 
sold  this  in  Bridgeport,  after  leaving  college.  Lost  in  this  all  he  had  made 
by  the  sale  of  Corroco. 

DIAMOND  SALES  COMPANY:  In  this  Lewis  acted  as  sales  agent 
for  a  New  York  brokf  r,  who  represented  an  Amsterdam  house. 

WATCH  SALES  CO:\IPANY:  Lewis  here  represented  the  Waterbury 
Watch  Company  as  demonstator. 

CATHARTIC  MEDICINE  COMPANY:  A  company  formed  at  Nash- 
ville, Tenn.,  for  the  manufacture  of  a  medicine  called  Laxative  Prunes. 

ANTI-SKEET  COMPANY:  Also  at  NashviUe;  manufactured  a  tablet 
which,  when  set  on  fire,  made  a  cloud  of  smoke  supposed  to  be  deadly  to 
mosquitoes. 

BUG  CHALK  COMPANY:  This  was  a  chalk  that  would  draw  a  line 
over  whicii  bugs  could  not  crawl. 

ANTI-FLY  COMPANY:  A  tablet  similar  to  Anti-Skeet,  which  had  to 
be  burned  to  be  effective. 

CORROCO  COMPANY:  This  was  a  corporation  formed  in  Nashville, 
the  name  similar  to  the  first  preparation  manufactured.  It  took  over  all 
the  Tennessee  preparations,  such  as  Anti-Skeet,  Anti-Fly,  Bug  Chalk,  etc. 
There  was  some  trouble  with  stockholders,  and  the  sheriff  of  Nashville 
wound  up  the  concern. 

THE  CORONA  COMPANY:  This  was  the  first  corporation  organized 
by  Lewis  in  St.  Louis.  It  included  the  various  bug  poisons  which  had 
been  properties  of  the  Corroco  Company  in  Nashville.  The  Moffett-West 
Drug  Company  was  interested  for  a  time  with  Lewis  in  the  Corona  Com- 
pany. 

DR.  HOTT'S  COLD  CRACKERS:  A  remedy  one  might  suppose  was 
on  the  order  of  Uneeda  Biscuit.  Not  so.  These  were  pellets  which  would 
"crack  a  cold  in  an  hour." 

HUNYADI  SALTS  COMPANY:  A  stomach  preparation  which  in- 
frineed  on  the  rights  of  a  foreign  bottling  house. 

DIAMOND  CANDY  COMP^ANY:  Said  to  have  been  a  meritorious 
proposition,  but  failed  for  lack  of  capital.  Molasses  candy,  put  up  in  yel- 
low tissue  paper,  like  the  Yellow  Jacket  of  more  recent  date. 

HYGIENIC  REMEDY  COMPANY:  Formed  to  take  over  several 
preparations. 

WALK-EASY  COMPANY:  As  its  name  implies,  this  was  a  foot- 
powder,  to  be  dusted  into  shoes. 

ANTI-CAVITY  COMPANY:  A  drug  that  would  instantly  stop  tooth- 
ache. 

PROGRESSIVE  WATCH  COMPANY:  This  was  an  endless  chain 
scheme,    A  dollar  would  be  paid  down,  and  when  the  purchaser  sold  a  cer- 


74  THE  SIEGE  OF  UNIVERSITY  CITY 

tain  number  of  coupons  for  a  dollar  each,  and  had  remitted  the  total  to 
Lewis,  he  would  receive  a  2;old  watch.     Stopped  by  the  Federal  officials. 

MAIL  ORDER  PUBLISHING  COMPANY: '  A  company  formed  to 
exploit   cheap  jewelry.     Published   the   Winner   Magazine. 

NATIONAL  INSTALMENT  CO.AIPANY:  Formed  to  sell  watches, 
jewelry,  etc.  The  purchaser  would  pay  tiiirty-three  and  one-third  per  cent 
down  and  the  balance  monthly.  In  all  cases  the  first  paj'ment  covered  the 
cost  of  the  article  and  allowed  a  small  margin  of  profit.  The  rest  was 
velvet. 

LEWIS  ADDRESSING  MACHINE  COMPANY:  A  stock  seUing  prop- 
osition.    No  machines  ever  sold. 

COIN  CONTROLLER  COMPANY:  A  corporation  in  which  Lewis  in- 
terested many  St.  Louis  bankers.  Every  cent  anybody  put  into  it  was  lost, 
for  it  was  soon  discovered  that  the  device  infringed  on  the  patent  of 
another. 

THE  MAIL  DEALERS'  PROTECTIVE  ASSOCIATION:  Formed  to 
aid  mail  order  houses  to  collect  delinquent  accounts. 

W^OMAN'S  FARM  JOURNAL  COMPANY:  Published  a  magazine  that 
gained  a  large  circulation  through  methods  questioned  by  the  postoffice. 

WOMAN'S  MAGAZINE:  A  periodical  exploited  as  having  the  largest 
circulation  of  any  publication  in  the  United  States.  Ultimately  refused 
admission  through  the  mails. 

ALLEN  STEAM  TRAP  COMPANY:  Manufacturers  of  a  device  to 
catch  condensed  water  and  send  it  back  to  the  boiler.  A  good-talking 
device  for  stock  selling  purposes,  but  not  practical. 

UNIVERSITY  HEIGHTS  REALTY  AND  DEVELOPMENT  COM- 
PANY: A  corporation  with  which  St.  Louisans  are  more  or  less  familiar, 
and  out  of  which  grew  University  City. 

THE  RICHARZ  PRESSROOMS  COMPANY:  Formed  to  print  the 
AVoman's  Magazine  and  Woman's  Farm  Journal. 

CONTROLLER  COMPANY  OF  AMERICA:  A  great  national  com- 
pany, formed  to  take  over  the  local  company.  Much  stock  sold,  but  com- 
pany wound  up  for  infringement  of  patent. 

WORLD'S  FAIR  CONTEST  COMPANY:  A  guessing  contest  as  to 
attendance  at  the  Louisiana  Purchase  Exposition.  It  was  really  a  lottery, 
cleverly  carried  on  so  as  not  to  break  the  letter  of  the  law. 

CALIFORNIA  VINEYARDS  COMPANY:  Land  to  be  cultivated  for 
purchasers  who  bought  on  the  installment  plan. 

LEWIS  PUBLISHING  COMPANY:  A  corporation  formed  to  take 
over  many  of  his  enterprises. 

FIBRE  STOPPER  COMPANY:  To  manufacture  bottle  stoppers  out 
of  wood  pulp.     Much  stock  sold;    no  machines. 

PEOPLE'S  UNITED  STATES  BANK:  A  mail  order  money  scheme 
that  grew  like  a  prairie  fire.  Wound  up  by  Federal  and  State  officials. 
Depositors  recovered  less  than  one-half. 

PEOPLE'S  SAVINGS  TRUST  COMPANY:  A  banking  scheme  that 
siicccpupcT   tlif*  InriK 

INTERNATIONAL  LANGUAGE  SCHOOLS:  To  teach  foreign  lan- 
guages by  correspondence. 

ART  POTTERY  COMPANY:  Lewis  claimed  to  have  discovered  a 
wonderful  clay  in  University  City.  He  sent  to  Europe  for  an  ex]iert  who 
would  run  a  china  factory.  Stock  sold  on  report  of  clay  deposit  and  expert 
coming. 

HYGIENIC  REMEDY  COMPANY:  This  was  revived  by  Mrs.  Lewis, 
who  advertised  in  Lewis'  publications  and  conducted  a  mail  order  business 
in  many  nostrums. 

WOMAN'S  NATIONAL  DAILY:  A  newspaper  which  Lewis  said  would 
revolutionize  the  publishing  business.     Gone  a-gllmmering,  like  all  the  rest. 

ST.  LOUIS  STAR  PUBLISHING  COMPANY:     Purchased  from  Na- 


THE  DREYFUS  CASE  OF  AMERICA  75 

than  and  August  Frank;  part  cash;  mostly  paper.  Used  as  a  great  stock- 
selling  enterprise,  nearly  twelve  thousand  persons  buying  stock.  Question 
of  this  stock  issue  to  be  aired  in  court.  Newspaper  now  said  to  be  back 
in  control  of  the  Franks. 

ST.  LOUIS  SUBWAY  COMPANY:  A  proposition  that  gave  Lewis 
opportunity  to  talk  in  big  figures. 

WOMAN'S  NATIONAL  LEAGUE:  A  scheme  recently  fully  described 
in  these  columns. 

"What  has  become  of  those  various  enterprises?"  I  asked  an  intimate 
friend  of  the  promoter. 

He  shook  his  head,  for  he  didn't  know. 

And  of  all  the  millions  of  dollars  that  have  passed  through  Lewis'  hands, 
how  mucii  do  you  think  he  has  salted  away? 

"Very  little,  if  any,"  he  said.  "Every  time  Lewis  took  anything  In,  it 
went  to  bolster  up  some  other  project.  All  his  life  he  has  been  stepping 
from  one  cake  of  ice  to  another,  like  Eliza  in  'Uncle  Tom's  Cabin.'  It  was 
impossible,  under  such  circumstances,  for  him  to  accumulate  anything." 

OTHER  PEOPLE^S  MONEY. 

The  most  recent  and  exhaustive  summary  of  Lewis'  alleged 
schemes  appears  in  a  tabulation  from  the  Rural  New  Yorker,  of  Oc- 
tober 7,  1911.  The  publisher  of  the  Rural  New  Yorker,  Mr.  John 
J.  Dillon,  may  be  fairly  said  to  have  developed  the  most  extreme 
case  of  Lewisomania  of  which  there  is  any  record.  Dillon,  as  the 
avowed  champion  of  the  PostofRce  Department,  would  seem  to  have 
had  access  to  their  sources  of  official  information.  His  belief  in  both 
the  official  theory  of  the  Postoffice  Department,  that  Lewis  is  a  law- 
breaker; and  in  the  newspaper  theory,  that  he  is  a  get-rich-quick 
schemer,  amounts  to  a  species  of  fanaticism.  Further  reference  to 
the  campaign  against  Lewis  of  the  Rural  New  Yorker  will  be  neces- 
sary in  connection  with  the  American  Woman's  League.  But  the 
reader  should  know  that  Dillon  is  engaged  in  a  crusade  for  Lewis' 
extermination.  Otherwise  the  rancor  in  the  following  paragraphs 
would  be  incomprehensible. 

Whether  the  alleged  letter  with  which  this  article  opens  was  ac- 
tually written  by  "A  Victim,"  or  was  in  fact  manufactured  for  the 
occasion,  is  a  question  suggested  by  glaring  inaccuracies  and  mis- 
statements in  the  succeeding  paragraphs.  The  caption  is  "Other 
People's  Money." 

Why  not  publish  a  list  of  the  E.  G.  Lewis  schemes  and  companies  he 
promoted?  The  people  who  have  been  caught  with  one  scheme  would  be 
mterested  to  know  of  others  and  the  list  would  serve  to  show  the  scheming 
activity  of  the  man.  A  VICTIM. 

Pennsylvania. 

W^e  would  not  feel  justified  in  attempting  a  complete  list.  St.  Louis 
daily  papers,  the  Financial  World  of  New  York,  and  the  Censor  Maga- 
zine of  St,  Louis  have  already  published  lists  more  or  less  complete.  In 
some  of  the  mail  order  schemes  he  seemed  to  have  only  an  indirect  interest. 
The  foUov/ing  list*  is  nearly  if  not  quite  complete: 

*Diamond  Sales  Company,  Watch  Sales  Company.  Cathartic  Medicine  Company, 
Anti-Skeet  Company,  Bug  Chalk  Company,  Anti-Fly  Company,  Corroco  Tablets  Com- 
pany, The  Corona  Company,  Dr.  Hott's  Cold  Crackers,  Hunyadi  Salts  Company,  Dia- 
mond Candy  Company,  Hygienic  Remedy  Company,  Sarsaparilla  Blood  Medicine,  Walk- 
Easy  Company,  Anti-Cavity  Company,  Progressive  Watch  Company,  Mail  Order  Pub- 
lishing Company,  National  Instalment  Company,  Lewis  Addressing  Machine  Company, 


76  THE  SIEGE  OF  UNIVERSITY  CITY 

Practically  all  of  these,  except  the  League,  are  now  defunct,  or  out  of 
his  control.  Several  of  them  are  in  the  hands  of  the  receiver  recently 
appointed  by  the  court.  But  since  the  receiver  took  over  his  concerns  he 
has  proposed  two  more  companies:  The  University  Heights  Publishing  Com- 
pany* and  tiie  Regents  Corporation.  He  is,  however,  under  indictment 
by  a  Federal  Grand  Jury  ciiarged  with  fraud  in  four  of  the  above  schemes, 
and  it  is  not  likely  that  he  will  venture  promises  extravagant  enough  to 
induce  many  people  to  part  with  their  money. 

It  is  only  fair  to  say  that  the  candy  company  has  been  regarded  as  a 
legitimate  business,  but  failed,  and  that  the  endless  chain  scheme  was  not 
classed  as  a  lottery  by  the  Postoffice  Department  at  the  time  Lewis  started 
it.  The  World's  Fair  Contest  was,  however,  started  later,  and  was  a  lottery 
pure  and  simple.  Even  Lewis  now  admits  as  much.  The  Rural  New 
Yorker  and  other  papers  were  solicited  to  go  into  it  at  the  time,  as  it  con- 
tained a  scheme  to  increase  subscriptions.  We,  of  course,  turned  it  down 
with  a  smile  and  a  bang.  But  on  Lewis'  own  testimony  it  took  about  two 
hundred  thousand  dollars  out  of  the  pockets  of  the  people  and  about  one- 
half  of  that  was  profit  to  him. 

Of  course  it  is  impossible  to  tell  now  just  how  much  money  he  has  col- 
lected from  the  people  on  shady  schemes.  It  is  variously  estimated  from 
eight  to  ten  million  dollars.  It  is  practically  all  lost  to  the  people  who  sent 
it  to  him.  Much  of  it  was  sent  him  from  seven  to  ten  years  ago.  Prac- 
tically no  interest  or  dividend  has  been  paid.  Many  of  the  victims  are  dead. 
Others  have  given  up  hope  of  return.  At  first  it  was  thought  that  the 
mortgage  notes  would  be  good.  But  it  is  now  found  that  many  of  the  notes 
are  not  secured  at  all.  In  some  cases  the  mortgages  were  nearly  five  times 
the  original  purchase  price  of  the  land.  In  other  cases  mortgage  notes  were 
sold,  and  e;fter  -the  money  was  received  promissory  notes  were  issued  instead 
of  the  secured  notes.  Stock  was  sold  under  'the  promise  that  a  fiiteen 
per  cent  dividend  was  about  to  be  declared,  and  that  it  would  pay  one 
hundred  per  cent  within  the  year.  Members  of  the  League  were  promised 
extravagant  and  numerous  benefits,  and  millions  of  endowments.  One  alone 
was  to  furnish  an  annual  pavTnent  of  twenty  to  thirty  dollars  for  life. 
In  lieu  of  this,  one  twenty-dollar  ten-year  worthless  debenture  note  has 
now  been  substituted.  Instead  of  the  millions  of  promised  endowments  the 
League  is,  on  his  published  admission,  hopelessly  in  debt.  The  correspond- 
ence schools  have  refused  lessons  because  previous  service  was  not  paid  for. 
Papers  on  his  list  have  refused  to  fill  subscriptions  for  the  same  reason. 

Yet,  with  all  this  record,  Lewis  goes  right  on  and  organizes  two  new 
companies.  He  appeals  to  the  people  to  put  their  money  into  one  of  them 
in  the  hope  of  making  profit  out  of  enterprises  which  he  has  already  aban- 
doned because  he  had  operated  them  at  a  loss.  If  any  person  wants  to 
part  with  money  to  such  enterprises,  we  have  no  protest  to  make,  but  we 
want  our  people  to  know  the  facts. 


Coin  Controller  Company,  IMail  Dealers'  Protective  Ass'n,  Woman's  Farm  Journal 
Company.  Journal  of  Agriculture,  Woman's  Magazine,  Allen  Steam  Trap  Company, 
University  Heiglits  Realty  and  Development  Company,  Richarz  Pressrooms  Company, 
Controller  Company  of  America,  World's  Fair  Contest  Company,  California  Vineyards 
Company,  Laguna  Cliico  Plantation,  Lewis  Publishing  Company,  U.  S.  Fibre  Stopper 
Company,  People's  United  States  Hank,  People's  Trust  Company,  International  Lan- 
guage Schools,  Art  Pottery  Company,  Hygienic  Remedy  Company,  Woman's  National 
Daily,  St.  Louis  Star  Publishing  Company,  St.  Louis  Subway  Company,  American 
Woman's  League,  Development  and  Investnrnt  Company,  Readers'  Pool,  Builders'  Fund, 
Success  Magazine  Endowment,  The  Founders'  Chapter,  Men's  University  League, 
Chemical  Frieze  Company,  Faultless  Suspender  Company,  Art  Museum  Society,  Camp 
Lewis  Company,  Bachelor  Pneumatic  Tube  Company,  Pacific  Trading  Company,  Ozark 
Herb  Company,  Telephone  Controller  Company,  The  Debenture  Scheme,  MofTett-West 
Drug  Company,  Endless  Chain  Scheme  and  Lottery,  Edwards  Publishing  Company, 
Claire  Art  Company,  Publishers'  Reorganization  Company,  Depositors  Agreement, 
Woman's   Republic. 

*This  is  probably  a  mistaken  and  inaccurate  reference  to  the  publishers  of  the  pres- 
ent volume.  Mr.  Lewis  is  not,  and  never  has  been,  connected,  directly  or  indirectly, 
with  this  company. 


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THE  DREYFUS  CASE  OF  AMERICA  79 

The  full-orbed  conception  of  the  Lewis  case,  according  to  the 
newspapers,  may  be  rounded  out  by  the  following  amusing  inter- 
view from  the  St.  Louis  Censor.  Further  and  peculiar  attention  to 
the  attorneys  Claude  D.  Hall  and  Judge  S.  H.  King  will  be  de- 
manded at  a  later  development  of  this  story.  The  delicious  humor 
of  the  comments  of  Attorney  Hall  can  scarcely  be  appreciated  with- 
out a  better  comprehension  of  the  relation  of  that  young  gentleman 
to  the  receivership  proceedings  against  the  Lewis  enterprises,  than 
can,  at  this  point,  be  properly  afforded.  Such  as  it  is,  however,  this 
story  has  been  set  in  circulation  as  veritable  news  matter,  tricked 
out  with  some  skill  of  literary  style,  to  swell  the  turgid  tide  of 
mingled  fact,  fancy  and  falsehood  which  threatens  to  engulf  Lewis' 
reputation,  and  cover  it  forever  with  an  unexampled  depth  of  pub- 
lic contumely. 

THE  E.   G.   LEWIS   BUBBLE. 

We  accept  Attorney  Hall's  challenge  to  write  a  book  wherein  to 
tell  of  Lewis'  many  schemes,  and  incidentally  to  pay  deserved  at- 
tention to  the  hero  of  the  following  interview.  It  is  entitled  "The 
E.  G.  Lewis  Bubble." 

Within  the  next  few  v/eeks  there  will  be  unfolded  in  the  St.  Louis  courts 
a  narrative  that  will  prove  more  sensational  than  the  tale  of  John  Law's 
Mississippi  Bubble  or  De  Lesseps'  gigantic  Panama  swindle.  It  concerns 
E.  G.  Lewis  and  his  manifold  activities.  The  reason  this  matter  is  only 
now  being  brought  to  a  head  is  because  for  the  first  time  a  firm  of  attor- 
neys in  private  practice  has  been  engaged  to  sift  to  the  bottom  all  affairs 
connected  with  the  University  City  publisher.  Heretofore  the  investigations 
and  prosecutions,  undertaken  by  Federal  and  State  officials,  have  been  con- 
fined to  one  line  of  procedure.  It  has  not  been  in  the  province  of  those 
in  charge  of  the  cases  to  go  beyond  certain  boundaries.  Attorneys  in  pri- 
vate practice  have  not  heretofore  been  engaged  to  thoroughly  sift  these 
affairs,  because  those  who  have  claims  against  Lewis  are  so  widely  scattered, 
and  the  amounts  of  the  majority  of  the  claims  have  been  so  small,  that 
a  unity  of  action  has  never  come  to  pass.  Now,  however,  there  is  a  getting 
together  of  those  who  have  lost  their  money,  and  headquarters  for  a  gen- 
eral prosecution  of  Lewis  along  all  lines  h;is  been  opened  in  the  Central 
National  Bank  Building.  The  St.  Louis  attorney  who  leads  in  this  activity 
is  Claude  D.  Hall.  Among  others  associated  is  Judge  H.  S.  King  of  Pow- 
haski,  Okla.,  who  is  attorney  for  the  Osage  Indians.  Judge  King  has  been 
retained  because  of  his  special  knowledge  of  receivership  proceedings.  He 
is  a  Mississippi  an  by  birth,  and  was  a  member  of  the  St.  Louis  bar  prior 
to  his  removal  to  Oklahoma. 

In  these  attorneys'  offices  clerks  and  stenographers  are  working  days 
and  far  into  the  nights  collecting,  classifying  and  preparing  evidence  which 
will  be  used  in  the  various  proceedings.  So  complex  is  the  situation,  and 
so  does  one  event  hang  upon  another,  that  with  a  given  fact  in  hand  it 
often  takes  one  man  a  day  to  trace  it  back  to  its  origin. 

Meanwhile  Lewis,  the  cause  of  it  all,  is  on  the  Pacific  slope,  engaged 
upon  his  latest  scheme,  the  American  Woman's  League.  The  last  word 
from  him  came  Saturday.  It  referred  to  an  event  scheduled  to  come  off 
Friday  night.  The  date  was  not  kept.  Some  people  in  Los  Angeles  had 
asked  Lewis  to  appear  before  them  and  explain  what  he  had  done  with 
certain  of  their  moneys.  He  failed  to  keep  the  engagement,  sending  a 
message  that  he  was  ill,  afflicted  with  gall  stones.  Don't  even  smile,  my 
reader.    That  is  the  word  which  was  sent. 


80  THE  SIEGE  OF  UNIVERSITY  CITY 

But  to  re\'ert  to  the  scene  of  action  in  St.  Louis.  Two  proceedings 
already  iiave  been  commenced,  one  in  the  nature  of  a  foreclosure,  and  the 
otlier  involuntary  bankruptcy.  But  they  are  not  a  marker  to  the  court 
case  whicii  will  be  filed  within  a  few  days,  and  which  will  set  the  whole 
country  to  talking.  The  Censor  is  not  yet  at  liberty  to  state  tb.e  nature 
of  this  proceeding,  but  it  is  of  a  magnitude  to  bring  into  the  limelight 
everything  concerning  the  mayor  of  University  City  and  his  money-squeez- 
ing schemes. 

MOXTE    CRISTO     MILLIONS. 

"When  the  Abbe  Faria  told  Edmond  Dantes  that  the  treasure  hidden  on 
Monte  Cristo  Island  totaled  thirteen  million  dollars,  the  young  man  was 
overwhelmed  with  astonishment.  He  had  never  heard  of  such  a  sum  being 
in  the  possession  of  an  individual.  Attorneys  engaged  in  this  research 
concerning  Levds  state  that  in  the  last  ten  years  he  has  dragged  in  from 
one  source  and  another  the  sum  of  twelve  million  dollars,  only  one  million 
less  than  the  romantic  mind  of  Dumas  dared  conceive  for  his  fantastic 
plot. 

"How  much  is  there  left?"  the  attorneys  were  asked. 

They  sighed  as  they  admitted  they  did  not  know.  "We  can  find  assets 
valued  at  only  two  and  one-half  million  dollars,"  replied  Mr.  Hall,  "and 
that  is  principally  incumbered  real  estate." 

"Who  are  the  losers  of  the  difference?"  I  asked. 

"Principally  women  who  are  scattered  all  over  the  country,  from  Maine 
to  California  and  Washington  to  Florida.  Of  these  there  are  evidently 
several  hundred  thousand.  There  were  some  men  caught  as  well,  princi- 
pally ministers  and  farmers." 

"Tell  me  how  he  got  this  money?"  I  asked. 

"Do  you  want  to  write  a  book?"  queried  Mr.  Hall.  "It  would  fill  a  book 
to  tell  of  his  many  schemes.  Here  is  one,  however,  and  it  is  well  substan- 
tiated by  affidavits.  In  1905  Lewis  purchased,  through  one  of  his  com- 
panies, a  tract  of  land  now  lying  in  University  City.  It  was  seventy  acres, 
and  cost  one  hundred  and  fourteen  thousand  dollars.  A  short  time  after 
this  he  mortgaged  this  same  tract  to  another  of  his  companies  for  five  hun- 
dred, thirty-seven  thousand  and  some  odd  dollars.  Then  his  second  com- 
pany proceeded  to  sell  mortgage  notes  in  various  denominations  all  over 
the  country.  Subtract  one  hundred  and  fourteen  thousand  dollars  from 
five  hundred  and  thirty-seven  thousand  and  you  have  four  hundred  and 
twenty-three  thousand  dollars,  which  the  people  paid  in — and  paid  in  for 
what?  For  Lewis'  imagination.  I'o  be  sure,  they  held  and  still  hold  these 
mortgage  notes,  but  what  is  back  of  the  notes?  Nothing,  so  far  as  the  four 
hundred  and  twenty-three  thousand  is  concerned." 

THE   REOROAXIZATION. 

"Tell  me  about  that  trusteeship  scheme?"  I  asked. 

"That  is  somewhat  complex,"  said  Mr.  Hall,  "yet  the  general  outline  can 
be  easily  given.  Lewis  owed  the  Class  A  publishers  something  like  one 
hundred  thousand  dollars.  Their  representative,  John  H.  Williams,  visited 
St.  Louis,  in  an  effort  to  collect  the  money.  He  couldn't,  and  so  the  trus- 
teeship sciieme  was  thought  of.  It  involved  the  turning  of  everything  over 
to  Williams  for  a  term  of  five  years;  everything,  mind  you,  including  all 
the  evidence  of  debt  .scattered  all  over  the  country.  For  these  Williams 
■svas  merely  to  give  his  receipts.  At  the  end  of  five  years  he  would  tell  the 
people  what  had  been  done,  and  send  them  pro  rata  what  he  had  netted, 
if  anything  had  licen  netted.  Now,  what  a  plan!  It  was  all  right  for  the 
publishers  of  Class  A,  for  they  would  have  got  theirs.  But  how  about  the 
hundreds  of  thousands  of  others:  No,  we  prefer  to  have  a  show-down  now, 
and  that  is  what  we  are  after." 

"Now  that  I  am  on  tlie  subject,"  continued  Mr.  Hall,  "I  want  to  say  we 
have  reason  to  believe  that  some  of  those  mortgage  notes  on  the  University 
City  property  were  issued   before  any  mortgage  was  recorded.     In  many 


THE  DREYFUS  CASE  OF  AMERICA  81 

instances  where  persons  sent  in  money  for  these  notes,  they  now  have  noth- 
ing to  show.  At  the  time  they  received  interim  receipts — Lewis  was  a 
great  fellow  to  give  interim  receipts — and  later,  when  they  called  for 
something  more  tangible  and  were  told  to  forward  the  interim  receiots, 
they  did  so,  and  never  got  anything  in  return." 

THE   AMERICAN    WOJIAn's   LEAGUE. 

"What  about  the  AVoman's   League,   Lewis'  latest  scheme?"   I   asked. 

"We  are  just  getting  into  that,"  said  Mr.  Hall.  It  appears  that  Lewis 
started  out  to  get  $50  each  from  one  million  women.  In  return  they  were 
to  have  subscriptions  from  certain  magazines,  were  to  belong  to  a  certain 
order,  and  chapter  houses  were  to  be  erected  by  Lewis  at  different  points. 
It  was  the  chapter  house  idea  that  caught  most  of  them.  There,  on  a 
prominent  lot  in  their  town  or  city,  would  be  erected  for  them  a  handsome 
building.  Lewis  was  going  Andrew  Carnegie  one  better.  The  Laird  of 
Skibo  only  puts  up  a  part  of  the  money,  letting  the  cities  do  the  rest. 
Lewis  was  going  to  do  it  all.  At  least  that  is  the  way  his  prospectus  reads. 
But,  to  date,  we  have  not  heard  of  a  single  chapter  house  that  has  been 
built;  nor  even  of  a  corner  stone  having  been  laid  for  one.  Toda^^'s  mail 
brings  a  letter  from  some  woman  living  in  Pontiac,  111.,  and  a  second  letter 
from  a  woman  living  in  Wheeling,  W.  Va.  Both  seek  information  as  to 
when  their  chapter  houses  will  be  commenced." 

"Have  all  of  Lewis'  publication  interests  gone  to  smash?"  I  asked. 

"Practically,"  replied  Mr.  Hall.  "The  last  of  those,  published  at  Uni- 
versity City,  the  Woman's  National  Daily,  which  was  recently  changed  to 
a  weekly,  has  v.ithin  the  last  few  days  been  leased  to  the  Woman's  League. 
I  don't  quite  know  what  this  move  means." 

•'How  about  the  St.  Louis  Star?" 

"That  is  another  complicated  matter.  Lewis  bought  the  controlling  in- 
terest in  the  Star  from  Nathan  and  August  Frank,  paying  part  cash  and 
for  the  balance  gave  his  notes,  with  the  stock  as  collateral.  Then  he  in- 
creased the  capital  stock  of  the  paper  and  sold  a  good  many  small  share 
lots  to  people  as  premiums  on  subscriptions.  Here  again  he  made  use 
of  the  interim  receipts;  and  did  not  deliver  the  actual  stock.  All  these 
transactions  have  got  to  be  taken  into  account  when  figuring  that  deal. 
Besides  this,  Lewis  published  the  Star  at  a  continued  loss.  We  understand 
that  he  used  money  for  this  enterprise  which  should  have  gone  into  other 
channels.  It  is  being  shown,  for  instance,  that  some  of  the  Woman's 
League  money  had  gone  into  the  Daily." 

It  is  not  known  just  when  Lewis  will  return  to  St.  Louis,  but  representa- 
tives of  the  attorneys  are  keeping  in  close  touch  with  him  and  are  thor- 
oughly posted  as  to  his  whereabouts. 

SOME  SCHEMES. 

The  present  review  of  newspaper  opinion  would  not  be  complete 
without  the  following  article  from  Collier's  Weekly  of  December  4, 
1909,  The  edge  of  this  article,  tempered  of  the  steel  which  has 
made  Collier's  so  trenchant  a  blade  in  the  fight  for  national  right- 
eousness, cleaves  almost  to  the  dividing  asunder  of  bone  and  mar- 
row. This  stroke  was  weighted  by  some  ten  thousand  dollars'  worth 
of  advertising  in  Collier's  previously  paid  for  by  the  American 
Woman's  League.  It  fell  with  exceptional  directness  upon  thous- 
ands of  subscribers  secured  to  Collier's  under  the  League  Plan.  Col- 
lier's, recognizing  the  part  played  by  temperament  in  human  affairs 
and  aware  that  the  conservatism  proper  to  that  periodical  is  opposed 
to  Lewis'  sanguine  optimism,  characterizes  Lewis  as  a  promoter  to 
an  "unsafe  degree."    It  regards  his  statements  and  promises  as  "ex- 


82  THE  SIEGE  OF  UNIVERSITY  CITY 

travagant."  The  editor  holds,  without  doubt  sincerely,  that  such 
promises  cannot  be  expected  to  be  materialized.  All  these  matters 
must  be  reserved  for  further  consideration  in  connection  with  the 
American  Woman's  League.  No  phrase  could  be  coined  which  would 
hit  off  so  aptly  tliis  editorial  from  Collier's  as  a  recent  pregnant 
avowal  from  its  own  editorial  columns ;  namely,  "Collier's  has  be- 
come notorious  for  its  betrayal  of  its  friends." 

The  American  Woman's  League  is  an  organization  for  soliciting  sub- 
scriptions to  ir.agazines  which  is  being  promoted  by  j^Ir.  E.  G.  Lewis  of  St. 
Louis.  Tn  some  places  the  connection  of  Collier's,  "Everybody's"  and 
various  other  publications  with  the  scheme  has  been  described  by  the  use 
of  the  expressions  "co-operate,"  "participate,"  and  "are  responsible  for." 
This  creates  a  wholly  wrong  impression.  Collier's  and  various  other  pub- 
lications have  permitted  Mr.  Lewis  and  the  members  of  his  organization 
to  solicit  subscriptions  for  them  on  a  percentage  basis.  This  is  exactly 
the  same  connection — and  no  more — that  exists  between  all  magazines  and 
many  thousands  of  subscription  agents  throughout  the  United  States.  For 
the  fulfillment  of  whatever  promises  or  contracts  may  exist  between  Mr. 
Lewis  and  the  members  of  the  American  Woman's  League  Mr.  Lewis  alone 
is  responsible.  It  is  also  true  that  Collier's  has  printed  Mr.  Lewis'  adver- 
tisements. This  entails  upon  us  the  usual  responsibility  for  the  good  faith 
of  our  advertisers.  Fundamentally,  the  plan  of  the  American  Woman's 
League  is  reasonable.  An  ordinary  American  town  of  ten  thousand  pays 
to  the  large  periodicals  about  five  thousand  dollars  a  year.  The  getting  of 
this  business  costs  the  publishers,  in  agents'  commissions  and  otherwise, 
about  thirty  per  cent,  or  one  thousand,  five  hundred  dollars  a  year.  For 
the  women  of  the  town  to  form  a  little  organization,  attend  to  renewing 
the  subscriptions,  collect  the  commissions,  and  use  the  income  to  found 
and  maintain  a  club-house  is  feasible  from  a  business  standpoint  and  a 
wholesome  thing  for  any  commimity.  But  Mr.  Lewis,  having  the  promot- 
er's temperament  to  an  unsafe  degree,  goes  beyond  this  and  makes  extrav- 
agant statements  and  promises  of  a  correspondence  university,  an  orphan 
asylum,  and  various  other  adjuncts  which  can  not  reasonably  be  expected 
to  materialize.  We  believe  that  all  the  women  who  enter  his  organization 
with  any  greater  expectation  than  to  secure  a  small  club-house  for  their 
towns  will  suffer  unhappy  disappointment.  As  to  the  criminal  charges 
which  were  brought  against  Mr.  I>ewis  by  the  Federal  Government  some 
years  ago,  he  was  completely  exonerated  by  the  dismissal  of  one  suit  and 
the  dropping  of  the  others  by  the  Government.  It  is  also  true  that  in 
connection  with  various  schemes  of  past  years,  Mr.  Lewis  has  solicited  and 
received  large  sums  of  money  from  the  public;  in  these  schemes,  those  who 
sent  money  to  Mr.  Lewis  have  not  only  failed  to  receive  the  profits  which 
Mr.  Lewis  led  them  to  expect,  but  have  also  been  unable,  in  many  instances, 
to  get  back  from  him  their  original  investments.  Finally,  the  women  who 
work  for  and  earn  a  club-house  from  Mr.  Lewis  should  in  every  case  see  to 
it  that  the  title  to  the  property  is  taken  in  the  name  of  the  local  women 
who  have  built  it.  Any  other  system  is  unfair  to  the  women  who  do  the 
work. 

LEWIS,   THE    MARTVR. 

The  last  of  the  newspaper  articles  which  it  seems  necessary  to 
republish,  appeared  in  the  New  York  Financial  World  of  July  15, 
1911,  under  the  caption  "Lewis,  the  Martyr:  His  Friends  Insist  He 
is  a  Very  Much  Persecuted  Man."  The  editor  of  the  P'inancial 
World  finds  it  extremely  puzzling  to  understand  how  Lewis'  friends 
can  imagine  that  he  is  a  "nmch  maligned"  individual.  For  staring 
one  in  the  face  is  the  "mountain  of  evidence  that  the  Government 


THE  DREYFUS  CASE  OF  AMERICA  83 

has  gathered  against  him,"  and  also  the  "chronic  financial  embarrass- 
ment" which  has  beset  all  his  various  schemes. 

Let  it  be  admitted  once  again,  that  the  Lewis  case  is  puzzling. 
The  magnitude  of  the  mountain  of  evidence  collected  by  the  Gov- 
ernment is  appalling.  But  over  against  this  mountain  bulks  in  equal 
magnitude  the  accomplished  result :  the  League,  the  Great  Press,  the 
Heights,  the  City  on  the  Heights,  and  the  things  these  stand  for,  all 
in  exquisite  beauty  and  suggestion,  as  seen  in  Lewis'  allegations  and 
reply.  Beyond  all  these,  there  looms  as  background  another  moun- 
tainous pile,  white  at  the  peaks,  pitch  dark  below,  and  green  as 
grass  in  between,  the  theories,  convictions,  imaginings,  fancies,  ac- 
cumulated and  marshaled  in  serried  ranks,  by  the  industrious  gen- 
tlemen of  the  press. 

Thus  the  editorial  in  the  New  York  Financial  World: 
E.  G.  Lewis,  the  St.  Louis  financier  of  meteoric  fame,  has  launched,  in 
his  short  cafeer,  nearly  two  dozen  sejiarate  ventures.  None  of  these  turned 
out  profitably  to  the  multitude  of  stockholders,  notwithstanding  that  he 
raised  for  them  somewhere  in  the  neighborhood  of  between  five  and  eight 
million  dollars.  Yet  he  still  has  staunch  friends  who  strongly  assert  that 
he  is  the  victim  of  persecution  upon  the  part  of  powerful  financial  inter- 
ests. They  even  go  further  by  charging  the  Postoffice  Department  with 
lending  aid  to  his  enemies  to  crush  him. 

There  is  no  question  about  the  sincercity  of  Lewis'  defenders.  But  it  is 
puzzling  how  they  can  bring  themselves  to  think  that  Lewis  is  a  much 
maligned  individual,  in  face  of  the  mountain  of  evidence  the  Government 
has  gathered  against  him,  and  the  chronic  financial  embarrassment  which 
has  beset  all  his  several  ventures.  Throughout  their  defense  of  Lewis,  their 
one  cry  is  that  he  is  honest,  and  that  no  evidence  has  been  produced  to 
prove  he  has  lined  his  own  pockets  with  one  dishonest  penny. 

Herbert  Hungerford,  a  magazine  writer,  in  an  article  published  in  de- 
fense of  Lewis  and  his  American  Woman's  League,  says  of  him,  after  ap- 
praising in  his  own  fashion  the  character  and  work  of  the  man: 

"No  one  can  tell  me  that  this  man  is  working  for  his  own  selfish  ends. 
If  this  were  true  he  could  have  retired  as  a  millionaire  long  before  he  ever 
attempted  to  establish  the  League.  In  fact,  I  cannot  conceive  of  any  in- 
telligent person  who  could  think  for  a  moment,  in  the  light  of  Lewis'  actual 
achievements,  that  he  has  any  other  motive  than  the  betterment  of  his  fel- 
low men." 

Here  is  a  picture  of  a  martyr,  who  has  had  almost  every  evil  force  work- 
ing against  his  altruistic  endeavors  and  is  a  veiy  much  misunderstood  man. 
If  this  be  so,  measured  by  every  other  commercial  sentiment,  and  this  is 
the  only  practical  way  to  judge  any  man  who  has  started  out  to  make  other 
people  happy  on  their  own  money,  Lewis  has  been  a  most  miserable  failure. 
Every  venture  he  has  conceived  was  a  house  of  cards,  a  flimsy  structure, 
collapsing  when  the  first  adverse  wind  came  in  contact  with  it. 

In  an  address  Senator  Burton  of  Ohio  made  in  the  Senate  in- the  de- 
fense of  the  Postoffice  Department's  ruling  in  the  case  of  Lewis'  publica- 
tion, the  Woman's  National  Weekly,  no  words  were  spared  in  tearing  to 
pieces  this  reputed  martyr's  character.  His  whole  record  as  a  promoter  was 
revealed  as  proof  that  the  Government,  instead  of  persecuting  the  man,  as 
his  friends  contend,  was  using  its  great  power  to  protect  the  public  from 
his  further  operations.  Senator  Burton  gave  a  list  of  his  promotions.  *  *  ♦ 
Scarcely  another  instance  can  be  cited  where  any  single  promoter  who 
had  conceived  so  many  schemes  for  the  purpose  of  enlisting  capital,  all  of 
which  at  one  time  or  another  stranded  on  the  rock  of  bankruptcy,  still  had 
so  many  friends  to  plead  his  cause  against  the  power  whose  bounden  duty 


84  THE  SIEGE  OF  UNIVERSITY  CITY 

it  is  to  protect  the  public  against  fraud.  In  that  respect  I.ewis  is  a  phen- 
omenal character.  He  is  possessed  of  a  magnetism  which  wins  friends  for 
him  in  spite  of  the  disaster  he  has  left  in  his  tracks. 

THE  MOTIVES  OF  THE   PRESS. 

The  documents  and  official  records  examined  by  the  present  writ- 
er comprise  very  many  thousands  of  printed  and  typewritten  pages. 
Several  months  of  conscientious  application  would  be  required  upon 
the  part  of  any  journalist  who  aspired  to  acquaint  himself  with  all 
the  facts  which  Avould  entitle  him  to  the  expression  of  a  mature  and 
well  balanced  opinion  on  this  much  debated  case.  Analysis  of  the 
foregoing  stories  or  even  denial  of  their  patent  misstatements  would 
seem,  therefore,  at  this  stage  to  be  a  gratuitous  undertaking. 

A  general  denial  cannot  indeed  be  entered.  For  a  considerable 
proportion  of  the  facts  alleged  are  true.  That  is,  if  separated  from 
their  context  and  considered  independently,  certain  of  these  state- 
ments in  fact  and  word  are  perfectly  correct.  Specific  denials,  un- 
supported by  evidence  and  in  heterogeneous  order,  are  unintelligible 
and  unconvincing.  Accordingly,  these  newspaper  representations 
will  be  allowed  to  stand  without  further  comment.  The  reader  will 
thus  be  in  position  to  form  an  unbiased  judgment  concerning  the 
newspaper  theory  of  Lewis'  personality,  upon  comparison  of  the 
allegations  above  set  forth  with  the  facts  of  record  which  will  be 
stated  as  the  story  proceeds  in  its  development. 

The  fact  ought  not  to  be  overlooked,  however,  that  newspapers 
are  organs  for  the  expression  of  the  opinions  and  promotion  of  the 
interest  of  tlie  persons  by  whom  they  are  controlled.  The  motives 
of  newspapers,  like  the  motives  of  men,  very  often  escape  the  probe 
of  the  most  searching  analysis.  Proof  of  bias  or  umvorthy  motive 
is  mostly  unattainable.  The  general  character  of  a  publication,  its 
past  policies,  as  shown  b}^  its  own  printed  columns,  and  the  known 
affiliations  of  its  owners  and  their  associates,  such  are  the  facts 
from  which  probable  inferences  may  be  drawn. 

The  Post-Dispatch  of  St.  Louis  is  a  widely  read,  influential  and 
responsible  daily  newspaper  with  a  circulation  of  about  three  hun- 
dred thousand.  It  was  the  publication  in  its  columns  of  the  orig- 
inal "scoop"  of  May  31,  1905,  that  first  let  loose  the  dogs  of  rumor 
against  Lewis.  Most  other  publications,  thereafter,  appear  to  have 
regarded  Lewis  as  fair  game,  upon  the  principle  that  when  the  first 
voice  has  been  lifted  with  the  alarm  "Stop  thief!"  all  men  are 
in  duty  bound  to  join  the  hue  and  cry.  Most  newspapers  seem  to 
have  acceiitcd  stories  of  the  Lewis  case  from  press  dispatches,  or  ex- 
changes, and  to  have  republished  them  without  animus,  merely  as 
interesting  news  matter. 

The  controversy  between  Lewis  and  the  Postoffice  Department  in- 
volves the  last  tw^o  Republican  administrations.  Presumption 
might  arise  tliat  such  stories  as  the  above  would  be  most  acceptable 
to  the  administration  press.  Such,  however,  docs  not  appear  to  have 
been  the  case,  except  at  particular  crises.     Lewis  has  always  been 


THE  DREYFUS  CASE  OF  AMERICA  85 

nominally  a  Republican.  He  has  continuously  proclaimed  his  con- 
fidence in  Theodore  Roosevelt  and  in  President  Taft.  These  facts 
have  prevented  the  case  from  assuming  any  kind  of  political  com- 
plexion. 

On  this  question  of  motive,  the  publications  above  quoted  may  be 
taken  as  fairly  representative.  Let  us  see  what  they  are.  The 
Akron  Beacon- Journal  speaks  for  the  large  class  of  progressive 
publications  and  their  readers  who  are  honestly  seeking  for  more  in- 
formation about  Lewis  enterprises.  The  Hartford  Globe  repre- 
sents the  type  of  publication  actuated  by  the  not  unkindly  interest 
of  a  local  newspaper  in  the  spectacular  career  of  a  financial  pro- 
moter born  in  their  neighborhood.  The  Boston  Herald  might  pos- 
sibly be  suspected  of  generally  hostile  motives  arising  from  conser- 
vatism, from  sympathy  with  the  Administration,  or  from  the  busi-' 
ness  interests  and  affiliations  of  its  proprietors.  The  article  of  Miss 
Grace  Phillips  in  the  Houston  Chronicle  concludes  with  the  follow- 
ing paragraph:  "It  might  be  well  for  those  Houston  ladies  who  are 
so  enthusiastic  in  Mr.  Lewis'  behalf  to  acquaint  themselves  with  the 
facts  in  the  case;"  which  sage  counsel  awakens  the  suspicion  of 
some  local  differences  in  mental  attitude  already  taken.  It  like- 
wise calls  to  mind  the  graceful  classic  rejoinder,  "Tu  quoque"  (Do 
thou  likewise"  fair  ^vriter!"). 

The  Chicago  News,  the  JNIinneapolis  Times,  New  York  Commer- 
cial, and  Peoria  Herald  are  types  of  journals  that  reprint  the  news 
as  they  receive  it,  in  good  faith  and  make  such  editorial  comment 
as  the  news  dispatches  seem  to  warrant. 

The  motives  of  the  Post-Dispatch  and  the  Rural  New  Yorker 
have  already  been  intimated.  The  editorial  from  Collier's,  the 
Pharisee  of  American  journalism,  appears  to  be  in  the  nature  of  a 
self-serving  declaration.  Like  the  smile  of  the  cat  that  swallowed 
the  canary,  it  suggests  mingled  emotions  of  self-satisfaction  and 
apology.  As  to  the  St.  Louis  Censor  and  the  New  York  Financial 
World,  they  may  be  dismissed  as  periodicals  of  a  type  such  that  the 
least  said  concerning  them  the  better. 

Lewis'  early  business  ventures,  or  try-outs,  which  embrace  a  con- 
siderable proportion  of  his  alleged  schemes  and  failures,  will  be  dis- 
posed of  in  the  next  chapter. 


CHAPTER  III. 
THE  MAKING  OF  A  GREAT  MAIL  ORDER  MAN. 

HoAVARD  E.  Nichols — Lewis    in    College — The   Corroco   Com- 
pany OF  Connecticut — The  Truth  About  No-To-bac — 
Lewis  as  a  Salesman — The  Corroco  Company  of  Tennes- 
see— Anti-Skeet  in  St.  Louis — The  Corona  Company — 
The    Hunyadi   Salts   Company — The    Hygienic    Remedy 
Company    and    Others — Lewis'    Early    Ventures — The 
Proprietary  Medicine  Business. 
Edward  Gardner  Lewis  makes  his  first  appearance  upon  the  hor- 
izon of  the  postoffice  insi^ectors'  official  record  in  the  fall  of  1895  at 
Nashville,  Tennessee.     Carlyle  has  remarked  by  what  insignificant 
accidents  men  live  in  history.     Lewis'  entire  career  has  been  colored 
by  a  chance  meeting  at  that  place  with   an  uncultured  half-caste 
drummer  for  a  patent  medicine  concei'n,  who  would  else  have  been 
utterly  unknown  to  fame.       No  casual  contact  could  have  seemed 
more  insignificant  than  the  meeting  in  Nashville  of  these  two  young 
men,  Lewis  and  Nichols.     Yet  the  crossing  of  their  paths  is  the  first 
turning  point  upon  which  hinged  the  action  of  this  American  na- 
tional drama. 

HOWARD   E.   NICHOLS. 

The  sequel  will  show  that  Howard  E.  Nichols,  in  time,  became 
Secretary  and  Treasurer  of  the  Mail  Order  Publishing  Company, 
established  by  Lewis  as  publisher  of  the  Winner,  afterwards  the 
Woman's  Magazine.  As  subscription  manager,  Nichols  received  the 
postoffice  insi3ectors  on  the  occasion  of  their  several  examinations  of 
the  Winner.  He  boasted  of  having  juggled,  on  one  occasion,  the 
card  cabinets  containing  the  subscription  lists  of  the  Winner,  in 
such  fashion  that  the  inspectors  were  induced  to  count  portions  of 
the  subscription  list  the  second  time.  This  alleged  trick  resulted  in 
many  and  serious  consequences  for  Lewis  and  his  associates  in  after 
years. 

Nichols  severed  his  connection  with  Lewis  under  circumstances 
already  mentioned.  The  two  men  became  totally  estranged.  Nich- 
ols droits  from  sight  for  several  years.  Lewis  prospers  amazingly. 
Comes  a  critical  moment.  Lewis  is  under  attack  by  the  Postoffice. 
Nichols,  like  a  concealed  viper,  suddenly  rears  his  head  and  strikes 
the  envenomed  fangs  of  scandal  and  libel  deep  into  Lewis'  business 
reputation.  The  poison  of  mistrust,  with  which  the  public  esteem 
of  Lewis  was  thus  inoculated,  pervades  the  public  records.  It  still 
circulates  in  the  columns  of  the  press.  Probably,  it  can  never  be 
altogether   neutralized.      Partly,   it   would   appear,   in   revenge   for 

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THE  DRF:YFUS  case  of  AMERICA  89 

Lewis'  charges,  and  partly  out  of  envy  and  from  spite,  Nichols  has 
struck  at  Lewis,  time  and  time  again. 

His  first  reprisal  took  the  form  of  certain  conversations  with  Wil- 
liam Marion  Reedy,  editor  of  the  Mirror.  The  nature  of  these  in- 
terviews, one  of  which  we  have  given  from  Nichols'  own  testimony, 
may  be  further  surmised  from  the  surrounding  circumstances.  The 
first  overt  act  was  the  letter  from  Nichols  to  William  Loeb,  Jr.,  Sec- 
retary to  President  Roosevelt,  which  enclosed  a  clipping  from  the 
Mirror  by  Reedy  containing  an  attack,  itself  doubtless  inspired  in 
part  by  Nichols,  against  the  People's  United  States  Bank.  Fol- 
lowed an  affidavit,  furnished  by  Nichols  to  Postoffice  Inspector-in- 
charge  Fulton  of  St.  Louis,  containing  the  untruthful  biography  of 
Lewis  according  to  Nichols.  It  was  on  this  Nichols'  biography  that 
the  postoffice  inspectors  in  large  part  based  their  first  investigation 
and  report.  The  Post-Dispatch  of  St.  Louis  published  lengthy  ver- 
batim extracts.  Then  and  thereafter  the  Nichols'  conception  of 
Lewis'  personality  and  character,  and  of  the  nature  of  his  business 
transactions,  furnished,  as  we  have  seen,  the  standards  for  the  char- 
acterization of  Lewis  for  the  whole  press  of  the  United  States. 

Nichols  again  struck  by  ajDpearing  as  a  witness  at  the  Ashbrook 
Hearings.  During  that  testimony,  he  discloses  a  close  personal 
relationship  with  one  of  the  attorneys,  S.  H.  King,  who  appeared 
in  the  recent  (1911)  receivership  proceedings  against  the  Lewis  en- 
terprises. Nichols  thus  appears  as  Lewis'  Nemesis,  ever  applying 
to  Lewis'  later  exj^ectations  and  achievements,  the  standards  of  those 
earlier  days. 

The  story  of  Nichols  will  be  developed  more  fully  in  connection 
with  the  Mail  Order  Publishing  Company  and  the  People's  United 
States  Bank.  The  object  of  anticipating  it  here  is  to  meet  fairly 
the  challenge  that  Lewis  is  shown  to  be  essentially  a  faker  by  his 
first  choice  of  vocation,  and  by  his  early  association  with  a  man  of 
the  Nichols  type.  For  Nichols'  own  letter,  affidavit  and  testimony, 
now  matters  of  public  record,  reveal  a  soul  so  petty,  a  mind  so 
warped  and  twisted,  that  his  claim  of  intimacy  with  Lewis  is  by  far 
the  most  serious  of  his  accusations.  "Tray  is  known  by  the  com- 
pany he  keeps."  Lewis  has  since  associated  with  many  distinguish- 
ed men;  yet  his  connection  with  Nichols,  from  their  first  meeting 
at  Nashville  in  1895  to  the  settlement  and  severance  of  their  aff'airs 
seven  years  later  at  St.  I^ouis,  has  cast  a  sinister  shadow  over  that 
period  of  Lewis'  life.  The  personality  of  Nichols  has  unquestion- 
ably been  among  the  most  blighting  influences  of  Lewis'  whole  ca- 
reer. 

Nichols  overreached  himself  in  his  last  appearance  against  Lewis 
before  the  Ashbrook  Congressional  Committee  at  Washington.  The 
Committee  yielded  somewhat  reluctant  permission  to  hear  this  wit- 
ness upon  what  seemed  a  trivial  and  collateral  issue.  But  in  the 
end,  two  entire  days  were  devoted  to  his  testimony  and  cross-exam- 
ination.    When  Nichols  left  the  stand  he  had  been  thoroughly  taken 


90  THE  SIEGE  OF  UNIVERSITY  CITY 

apart  and  the  truth  elicited  from  him.  Incidentally  the  members  of 
the  Committee  and  the  cross-examining  attorneys  had  with  unspar- 
ing candor  limned  his  picture  upon  the  sober  pages  of  the  official 
record.  The  incisive  query  of  one  stern  analyst  after  another  laid 
bare  Nichols'  ignorance,  his  moral  obtuseness,  his  total  lack  of  ante- 
cedents, his  petty  malice,  his  envy,  his  lust  for  vengeance.  When 
Nichols  left  the  committeeroom,  one  fancies  that  all  present  breathed 
a  sigh  of  relief.  Certainly  the  whole  atmosphere  of  the  Lewis  case 
clears  sensibly  when  the  testimony  of  Nichols  is  analyzed,  and  the 
motives  of  his  accusations  are  disclosed. 

Had  Nichols  and  Lewis  been  able  to  foresee  at  the  time  of  their 
first  meeting  in  the  private  office  of  the  Spurlock-Neal  Drug  Com- 
pany at  Nashville,  Tennessee,  in  the  summer  of  1895,  the  nature  of 
their  respective  testimony  before  a  Congressional  investigation  in 
1911,  they  would  have  recognized  that  moment  as  a  dramatic,  even 
a  tragic  one.  As  their  hands  fell  apart  after  the  moment  of  their 
introduction,  a  chain  of  influence  was  started  which  was  fraught 
with  untold  ruin  and  disaster.  In  blissful  ignorance  of  the  future, 
they  merely  comjoared  notes  as  to  their  respective  lines  of  business, 
and  arranged  to  meet  again  at  Lewis'  office  in  the  building  of  the 
Board  of  Trade.  Nichols  took  on,  as  a  side  line,  the  sale  of  one  of 
Lewis'  proprietary  articles.  The  men  then  parted,  to  meet  again 
years  later  under  circumstances  which  will  appear  hereafter.  Let 
us  see  how  they  chanced  thus  to  come  in  contact.  This  occasion  and 
what  took  place  afterwards,  will  be  understood  more  clearly  if  we 
fall  back  to  Lewis'  first  extensive  business  ventures  while  still  a  stu- 
dent at  Trinity  College,  Hartford,  Connecticut. 

LEWIS    IN    COLLEGE. 

Lewis  first  entered  Trinity  in  1886  as  a  member  of  the  class  of 
1890,  but  was  obliged  to  withdraw  a  month  later  on  account  of  ill- 
ness. Returning  to  college  in  1888  with  the  class  of  1892,  he  shortly 
became  a  member  of  Delta  Psi,  a  well-known  college  fraternal  or- 
ganization. He  took  quarters  with  his  fraternity  brothers  in  their 
local  club  house.  His  natural  aptitude  for  affairs  led  to  his  elec- 
tion as  house  steward  and  business  manager.  As  such  he  formed 
the  acquaintance  of  the  representative  of  sundry  importers  of  fine 
Havana  cigars,  whose  custom  it  was  to  supply  influential  student  or- 
ganizations Avith  samples  of  their  wares  as  a  means  of  stimulating 
the  demand  for  new  brands  which  they  were  placing  upon  the 
market.  Perceiving  a  business  opportunity,  Lewis  secured  from  cer- 
tain of  these  concerns,  the  wholesale  agency  for  the  Connecticut 
Valley  and  \  icinity.  His  personal  jjopularity  enabled  him  to  create 
a  vogue  for  these  goods  in  the  college  and  university  towns  so  num- 
erous in  that  locality.  Thence  the  demand  spread  throughout  his 
territory.  He  was  thus  successful  in  introducing  a  number  of  the 
new  brands  of  cigars,  and  in  developing  a  considerable  business. 
The  manufacturers  from  time  to  time  made  up  and  submitted  to  him 
complete  sample  cases  of  new  lines  of  fine  cigars.     These  he  would 


THE  DREYFUS  CASE  OF  AMERICA  91 

distribute  among  influential  collegians,  who  would  ask  for  tnem  at 
the  local  shoj^s.  Lewis  in  this  way  would  often  have  sold  the  goods 
before  shipments  could  be  delivered. 

Tempted  by  the  quality  of  the  fine  cigars  which  he  thus  had  con- 
stantly at  hand  without  expense,  Lewis  smoked  inordinately.  He 
tells  in  this  connection  the  following  story: 

I  was  smoking  at  that  time,  eiglit  or  ten  cigars  a  day.  One  day  an  old 
smoker  came  in  to  call  on  me,  and  while  he  was  there,  I  put  down  a  cigar, 
saying  I  would  have  to  cut  down  my  smoking  a  little.  He  asked  me  if  the 
habit  was  getting  the  better  of  me.  I  said  it  was.  He  then  suggested  that 
if  I  would  chew  a  little  piece  of  black  licorice  it  would  overcome  the  ill  ef- 
fect of  the  tobacco.  I  tried  it  and  thought  that  the  result  was  good.  That 
suggested  to  my  mind  an  opportunity  to  promote  my  sales  still  more.  It 
occurred  to  me  that^  no  doubt,  many  smokers  would  use  more  cigars  if  they 
knew  of  any  waj'  to  prevent  the  injurious  consequences. 

So  I  commenced  to  read  the  matter  up.  I  found  that  the  nicotine  in 
the  tobacco  is  an  alkaloid  poison.  I  remember  that  I  came  across  stories 
about  soldiers  in  the  war  who  to  avoid  going  into  battle  would  tie  a  piece 
of  plug  tobacco  under  their  armpits.  The  efPect  would  be  to  bring  on  a 
temporary  but  very  violent  sickness.  They  would  be  carried  back  to  the  field 
hospital  in  the  rear,  but  about  the  time  the  battle  was  over  they  would  re- 
cover and  be  all  right. 

I  then  had  the  key  to  what  the  licorice  did.  I  knew  it  must  contain 
some  substance  which  acted  as  an  antidote  or  palliative  to  nicotine  poison- 
ing. So  then  I  took  up  the  matter  with  Parke,  Davis  &  Co.,  the  manufac- 
turing chemists,  and  had  them  go  to  the  bottom  of  it.  I  found  through 
them  that  the  commercial  source  of  licorice  is  the  roots  of  certain  legumin- 
ous plants  growing  in  the  Mediterranean  region  of  Europe.  This  plant  is 
called  Glycyrrhiza,  a  plant  with  sweet  root,  from  two  Greek  words  meaning 
sweet  and  root.  The  English  word  licorice  is  originally  from  the  same 
source.  The  root  grows  several  feet  long  and  an  inch  or  more  thick,  has  a 
sweet  taste  and  has  sootliing  and  laxative  properties.  The  licorice  of  com- 
merce is  either  the  root  of  this  plant  or  an  extract  from  it.  It  is  exten- 
sively used  in  the  manufacture  of  tobacco.  Its  active  principle  is  glycyr- 
rhizin,  a  peculiar  sugary  substance. 

About  that  time  I  got  acquainted  with  a  young  Spaniard  from  Central 
America,  who  was  a  chemist.  He  told  me  that  the  natives  in  Central 
America  chew  the  roots  of  certain  plants  for  relief  from  tobacco  poisoning, 
and  that  the  native  doctors  make  a  brew  for  that  purpose  from  these  roots. 
He  investigated  the  matter  and  found  that  this  root  produced  a  better  ex- 
tract than  licorice  as  a  source  of  glycyrrhizin.  This  was  a  substance  weU 
known  in  trade  channels,  the  extract  of  which  was  very  much  thicker  and 
better  suited  to  my  purpose.  I  therefore  adopted  this  and  employed  Parke, 
Davis  &  Co.  to  make  me  up  a  tablet  containing  the  proper  amount  of  gh'- 
cyrrhizin.  Each  tablet  contained  more  of  this  active  principle  than  a  large 
amount  of  stick  licorice  and  was  therefore  much  more  beneficial  to  the 
smoker.  I  called  these  tablets  Corroco,  and  made  up  my  mind  to  organize 
a  company  and  put  them  on  the  market.  That  was  the  origin  of  the  Corroco 
Company  of  Connecticut,  incorporated  about  188S,  my  first  important  busi- 
ness venture.  I  coined  the  word  Corroco  on  the  spur  of  the  moment,  for 
no  particular  reason  except  that  I  wanted  a  word  for  a  trade-mark  that 
had  a  Spanish  sound. 

THE  CORROCO   COMPANY  OF   CONNECTICUT. 

Lewis  succeeded  in  interesting  local  capital  in  this  project.  While 
still  a  student,  he  opened  offices  in  the  Goodwin  Block,  Hartford, 
and  employed  quite  a  large  force  of  girls,  wrapping  and  mailing 
samples,  filling  mail  orders  and  issuing  circular  letters  to  the  trade. 


&2  THE  SIEGE  OF  UNIVERSITY  CITY 

He  advertised  extensively.  Totally  inexperienced  in  this  class  of 
business^  Lewis,  as  many  another  would-be  advertiser  has  done,  em- 
barked upon  a  campaign  of  national  publicity  without  any  proper  ap- 
]ireciation  of  the  enormous  sums  of  money  that  such  policy  would  re- 
quire. The  new  jDrejDaration  Avas  popular.  Initial  orders  were  large. 
The  trade,  as  is  usual  in  such  cases,  overstocked  in  anticipation  of 
future  demands.  This  comi:)elled  Lewis  to  manufacture  heavily  to 
fill  orders.  Then  came  the  lull  which  always  occurs  with  a  new 
preparation,  while  the  demand  is  slowly  absorbing  the  first  stock 
ordered  and  before  second  and  subsequent  orders  can  come  in. 
Good  strategy  now  requires  that  the  demand  be  stimulated  by  heavy 
iidvertising.  But  Lewis'  resources  had  been  exhausted  by  his  first 
advertising  appropriation  and  by  the  manufacturing  necessary  to 
fill  the  resulting  orders.  His  backers,  realizing  for  the  first  time 
the  amount  of  money  that  would  be  required,  were  unwilling  to  sup- 
port the  project,  which  Lewis  therefore  regretfully  abandoned.  A 
gross  business  of  approximately  one  hundred  and  fifty  thousand  dol- 
lars was  transacted  by  the  first  Corroco  Company,  most  of  which,  ac- 
cording to  Lewis,  went  to  swell  the  profits  of  advertising  agencies 
and  periodicals.  The  net  effect  upon  Lewis'  mind  appears  to  have 
been  the  suggestion  that  the  purchase  and  sale  of  advertising  space 
was  likely  to  be  more  profitable  to  the  publishers  of  periodicals  than 
to  the  advertiser.  And  this  conclusion,  so  far  as  Lewis  personally 
is  concerned,  his  subsequent  experience  seems  to  have  confirmed. 

The  object  of  "Corroco,"  as  advertised  by  Lewis,  was  to  increase 
the  sale  and  use  of  tobacco.  He  sold  chiefly  by  wholesale  to  drug 
stores  and  tobacconists.  He  advocated  his  preparation  as  a  means 
of  increasing  tobacconists'  sales,  and  to  that  end  invited  their  co- 
operation. His  inventive  mind  suggested  a  simple  form  of  vending 
machine  upon  the  principle  of  the  penny-in-the-slot  instruments  now 
so  universally  employed.  Lewis,  in  fact,  perfected  this  device  and 
obtained  his  first  patent  at  a  time  when  there  was  but  one  previous 
American  and  two  British  patents  in  existence.  His  plan  of  cam- 
paign contemplated  placing  one  of  these  vending  machines  contain- 
ing packages  of  "Corroco"  tablets  upon  the  dealer's  cigar  case.  He 
proposed  then  to  supply  the  trade  with  literature  for  distribution, 
showing  that  the  habit  of  smoking  would  be  rendered  less  harmful 
by  "Corroco."  Hence  men  who  enjoyed  smoking,  but  feared  the 
injurious  eft'ects,  need  not  discontinue  but  might  smoke  all  they 
pleased. 

THE  TRUTH   ABOUT  NO-TO-BAC. 

An  amusing  incident  growing  out  of  this  early  experience  is 
notable  as  the  point  of  contact  between  Lewis  and  the  man  who 
afterwards  became  his  stauncliest  backer,  H.  L.  Kramer,  now  far- 
famed  as  the  proprietor  of  "Cascarets."  While  manufacturing  the 
"Corroco"  tablets,  Lewis'  attention  was  attracted  to  the  advertise-^ 
ment  by  Kramer  of  a  similar  ])rcparation  under  the  trade  title  "No- 
to-bac,"  but  for  a  totally  different  purpose;  namely,  to  enable  smok- 


^Residence  of  Jackson  Johnson,   Aiacnuau   of    L  nii^ersity   City 

^Lenox  Hall,   University  City.     Exclusive  boarding  school  for  yoitiig  ladies.     Erected 
1910 


^Art  Institute  of  the  American   Woman's  League. 
^City  Hall  of  University  City.     Erected  igio 


Erected  1909 


THE  DREYFUS  CASE  OF  AMERICA  96 

ers  to  break  oiff  the  habit.  Kramer's  advertising  contained  a  sugges- 
tion that,  as  the  preparation  was  harmless,  wives  and  mothers  could 
administer  it  secretly  in  coffee  or  other  liquids,  and  thus  cure  the 
male  members  of  their  families  of  the  smoking  habit  by  creating  a 
distaste  for  the  effects  of  nicotine.  This  latter  style  of  advertising, 
it  will  be  remembered,  is  among  the  various  species  of  deception  of 
which  Lewis  has  been  accused.  In  fact,  he  was  highly  indignant 
when  his  product  was  pirated  as  he  supposed,  and  a  style  of  adver- 
tising made  its  appearance  which  was  directly  hostile  to  the  aims  he 
had  in  view,  and  injurious  to  his  business  projects. 

Lewis'  first  communication  to  Kramer  took  the  form  of  a  sharp 
letter  asking  why  the  latter  did  not  think  up  something  original  in- 
stead of  pirating  his  product  and  counteracting  the  effect  of  his  ad- 
vertising by  a  competitive  publicity  campaign.  Kramer  rejoined 
that  he  had  been  at  the  point  of  writing  a  similar  letter.  The  two 
men,  in  other  words,  both  contend  that  each  had  an  original  idea, 
and  that  both  chanced  upon  the  same  product  by  an  odd  coincidence. 
The  two  future  friends  wholly  lost  sight  of  one  another  for  several 
years  after  this  exchange  of  correspondence,  except  through  hearsay 
and  their  observation  as  competitors  of  one  another's  publicity  cam- 
paigns. Kramer  afterwards,  as  an  advertiser,  formed  the  acquain- 
tance of  LcAvis  as  publisher  of  the  Winner  Magazine.  The  two  be- 
came fast  friends  under  circumstances  which  will  appear  hereafter. 

Lewis  eventually  succeeded  in  interesting  a  group  of  New  York 
business  men  in  the  "Corroco"  tablets.  To  them  he  sold  out  his  in- 
terests in  the  fall  of  1892,  on  consideration  of  their  taking  over  the 
imfinished  business  and  assuming  the  liabilities  of  the  corporation. 
A  new  charter  was  taken  out  by  them  as  the  Corroco  Company  of 
New  York,  but  in  this  Lewis  was  not  personally  interested. 

Lewis,  after  winding  up  the  Corroco  Company  of  Connecticutj 
abandoned  for  all  time,  as  he  supposed,  the  manufacture  of  proprie- 
tary articles.  But  the  bent  of  his  mind  toward  commercial  life  was 
altogether  too  strong  to  warrant  his  continuing  long  in  college.  He 
therefore  left  Trinity  in  1890.  about  the  close  of  his  sophomore 
year. 

LEWIS  AS   A   SALESMAN. 

During  his  college  days,  he  also  acted,  for  a  time,  as  salesman 
for  diamonds  and  other  precious  stones.  A  taste  for  crystallo- 
graphy is  one  of  the  strongly  marked  characteristics  of  Lewis' 
many-sided  personality.  One  day  while  still  a  freshman  at  Trinity, 
chancing  to  pass  through  iVL-iiden  Lane  in  New  York,  he  happened 
to  see  an  especially  fine  display  of  uncut  diamonds  in  the  window 
of  an  importing  jeweler.  He  stepped  inside  to  get  a  closer  look 
at  them.  As  the  stones  were  displayed  by  the  proprietor  upon  a 
tray,  Lewis  amused  himself  by  idly  classifying  them  according  to 
their  several  degrees  of  clarity,  or  as  it  is  technically  known,  of 
"water."  A  natural  eye  for  these  fine  distinctions  of  value  in  prec- 
ious stones  is  a  rare  gift,  very  essential  to  the  successful  dealer.  The 


96  THE  SIEGE  OF  UNIVERSITY  CITY 

jeweler,  observing  that  Lewis  had  this  gift,  engaged  him  in  conver- 
sation, tested  him  somewhat  furtlier,  and  in  the  end  employed  him 
as  wholesale  agent  or  broker  for  the  Connecticut  Valley. 

Lewis,  therefore,  during  his  brief  tv/o  years  as  a  college  student, 
maintained  regular  offices  in  a  downtown  office  building  in  Hartford, 
and  there  carried  on  two  distinct  lines  of  trade  as  wholesale  broker, 
in  addition  to  the  business  of  the  Corroco  Company.  He  continued 
these  activities  after  leaving  college  until  the  sale  of  the  latter  con- 
cern. He  then  entered  the  employ  of  his  uncle,  George  C.  Edwards, 
in  the  fall  of  1892,  as  traveling  salesman. 

Mr.  Edwards  was  at  that  time,  president  of  the  Bridgeport  Chain 
Company.  Their  product  was  based  upon  a  patent  swivel,  which, 
when  introduced  into  a  chain  at  intervals,  prevented  it  from  kink- 
ing and  becoming  twisted  into  knots.  Lewis'  ingenious  mind  im- 
mediately suggested  a  multitude  of  new  uses  for  this  device.  His 
orders  kept  the  designers  and  the  factory  constantly  busy  producing 
new  styles  of  chain  of  every  imaginable  size  and  quality,  required  to 
adapt  the  product  to  a  great  variety  of  different  uses.  Without 
samples  or  instructions,  he  booked  orders  for  chain  curtain  pulls,  cow 
chains,  dog  chains;  chains,  in  short,  for  every  sort  of  purpose  for 
which  a  chain  could  be  employed.  The  firm  caught  the  inspiration. 
Other  salesmen  were  taken  on.  The  business  was  speedily  put  upon 
a  paying  basis. 

Mr.  Edwards  was  a  director  of  the  Waterbury  Watch  Company 
of  Waterbury,  Connecticut.  As  such  he  chanced  to  be  consulted  at 
this  time,  touching  a  new  sales  problem  of  that  concern.  The  long- 
wind  two-and-a-half  dollar  Waterbury  watch  was  the  first  cheap 
watch  to  be  successfully  placed  upon  the  American  market.  It's 
fame  had  created,  on  the  part  of  both  the  trade  and  the  public,  the 
presumption  that  a  Waterbury  watch  and  a  cheap  watch  were  syn- 
onymous terms.  The  company  was  now  ambitious  to  manufacture  a 
line  of  watches  of  higher  grade.  It  had  invested  heavily  in  this 
connection  and  had  developed  a  satisfactory  product.  Its  sales- 
campaign,  however,  had  proved  an  utter  failure.  Neither  the  pub- 
lic nor  the  trade  could  be  readily  made  to  believe  that  a  W^aterbury 
watch  could  be  worth  anything  over  two-and-a-half  dollars. 

After  vainly  suggesting  that  the  company  adopt  another  trade 
name  than  Waterbury  for  its  high  class  line,  Mr.  Edwards  told  the 
story  of  Lewis'  campaign  for  the  Bridgeport  Chain  Company,  and  at 
his  suggestion,  Lewis  was  emjiloyed  to  demonstrate  the  new  line  of 
Waterbury  watches  to  the  trade.  He  was  married  at  this  time,  and 
after  attending  the  World's  Fair  at  Chicago  with  Mrs.  Lewis,  he 
continued  on  a  wide  swing  through  the  West  and  South,  thus  oc- 
cupying something  over  a  j'^ear. 

Those  who  have  known  Lewis  in  more  recent  years  can  readily 
understand  the  sources  of  his  early  success  in  this  capacity.  Easy 
of  address  and  winning  of  personalitj'^,  he  combines  the  qualities  of 
initiative  and  fertility  of  imagination  with  a  degree  of  energy  and 


THE  DREYFUS  CASE  OF  AMERICA  97 

resourcefulness  altogether  exceptional.  His  progress  through  the 
West  and  South  from  city  to  city  was  marked  by  lavish  campaigns 
of  newspaper  advertising  and  spectacular  window  displays  of  high 
grade  Waterbury  watches  by  foremost  local  jewelers. 

At  the  conclusion  of  this  campaign,  Lewis  entered  into  a  contract 
with  the  company  as  Southern  sales  manager,  the  exact  extent  of  his 
territory  to  be  determined  by  experiment.  This  connection,  which 
appears  to  have  been  creditable  to  Lewis  and  acceptable  to  his  em- 
ployers, was  terminated,  to  the  regret  of  both,  at  Nashville,  Tennes- 
see, in  the  spring  of  1895,  b}'^  the  sudden  and  serious  illness  of  Mrs. 
Lewis.  Lewis  was  married  in  Baltimore  in  1891.  His  wife  had  ac- 
companied him  on  his  business  journeys.  This  illness  demanded 
his  presence  at  her  bedside.  Attempts  to  cover  his  territory  by  oc- 
casional trips  from  Nashville  as  headquarters  were  frustrated  by 
acute  symiDtoms  of  danger.  The  physicians  recalled  him  again  and 
again  to  the  detriment  of  his  business  interests. 

Compelled  in  this  wise  to  sever  his  lucrative  connection  with  the 
Waterbury  \\''atch  Company,  a  stranger  in  Nashville,  without  funds, 
yet  confronted  with  the  extraordinary  expenses  attendant  upon  Mrs. 
Lewis'  illness,  Lewis  Avas  compelled  to  cast  about  for  another  busi- 
ness opening.  His  attention  was  attracted  quite  by  accident  to  the 
properties  of  pyretlirum,  the  chief  ingredient  of  the  ordinary  "Per- 
sian" insect  powder,  as  an  insecticide,  and  especially  if  burned  as 
a  mosquitocide.  Lewis'  own  account  of  this  simple  incident  is 
characteristic  of  the  alertness  of  his  mind  and  the  versatility  with 
which  he  has  often  adapted  himself  to  the  most  untoward  circum- 
stances.    He  relates  the  incident  as  follows: 

"When  Mrs.  Lewis  was  sick  at  Nashville,  I  had  to  give  up  my 
position  with  the  Waterbury  Watch  Company  because  she  couldn't 
move.  She  was  sick  for  months,  and  nearly  died.  With  a  sick  wife 
and  practicallj'-  without  funds,  I  was  thrown  on  my  own  resources. 
During  that  time  I  noticed  the  nurse,  an  old  colored  woman,  kill- 
ing mosquitoes  in  the  room  with  something  she  was  burning  on  a 
shelf.  I  inquired  what  it  was  and  found  that  it  was  a  pyrethrum 
powder." 

On  looking  at  it  he  found  that  it  appeared  to  contain  a  resinous 
substance  which  gave  off  thick  fumes,  and  had  the  property  when 
burnt,  of  stupefying  or  killing  the  mosquitoes.  Not  content  Avith  the 
mere  folklore  of  a  negro  mammy,  Lewis  began  to  question  local 
cliemists  and  wholesale  dealers.  He  also  corresponded  on  the  sub- 
ject of  mosquitoes  and  mosquitocides  with  the  Department  of  Agri- 
culture at  Washington.  His  investigations  in  the  end  led  him  to  de- 
vise a  mosquitocide  consisting  of  a  particular  quality  of  pyrethrum 
rich  in  certain  resinous  ingredients.  The  fumes  of  these  resins  ap- 
peared to  be  the  active  principle  in  destroying  insect  pests.  This 
particular  quality  of  pyrethriun  made  up  in  the  form  of  tablets 
mixed  with  other  substances  to  facilitate  burning,  he  placed  upon 
the  market  as  a  mosquitocide  under  the  trade  title  of  "Anti-Skeet." 


98  THE  SIEGE  OF  UNIVERSITY  CITY 

Those  who  have  been  annoyed  by  the  pest  of  mosquitoes  will  not 
be  surprised  to  learn  that  Anti-Skeet  under  Lewis'  spectacular  ma- 
nipulation was  an  instant  success.  Thousands  of  purchasers  used  it 
continuously  to  their  entire  satisfaction.  The  sale  was  literally 
enormous  and  was  maintained  until  its  quality  was  impaired  in  later 
years  by  the  unwise  policy  of  Lewis'  St.  Louis  associates  in  the 
Corona  Company.  ^luch  the  same  formula  is  now  publicly  recom- 
mended as  a  mosquitocide  in  bulletins  of  the  Department  of  Agri- 
culture. These  facts  would  seem  to  dispose  of  any  question  as  to 
the  legitimac}'^  of  Lewis'  enterprise  in  this  direction. 

THE    CORROCO    COMPANY   OF   TENNESSEE. 

Emboldened  by  the  success  of  Anti-Skeet,  Lewis  recalled  to  mind 
his  earlier  experiment  with  the  "Corroco"  tablets,  and  organized 
the  Corroco  Company  of  Tennessee — his  second  incorporation.  This 
concern  brought  out  a  number  of  proprietary  articles,  including 
"Anti-Fly,"  "Bug-Chalk,"  and  others  of  a  similar  nature.  Lewis' 
mind  was  working  actively,  but  had  not  yet  found  its  proper  bent. 

The  following  extract  from  the  report  of  the  postoffice  inspectors 
in  re  the  People's  Bank  is  of  interest  in  this  connection: 

Howard  E.  Nichols  met  him  (Lewis)  in  Nashville,  Tennessee,  about 
August,  1895,  when  lie  was  in  debt  for  his  board  and  was  selling  Anti- 
Skeet,  a  tablet  composed  of  saltpetre  and  insect  powder.  Taking  an  interest 
in  him,  Nichols  loaned  him  a  hundred  and  fifty  dollars,  and  promised  to  ex- 
ploit his  business  in  Memphis,  Tennessee.  I.ewis  had  some  little  success.  He 
organized  a  company  with  himself,  Gilford  Dudley,  a  note  broker,  and  Otto 
Stoelker.  Stoelker  sold  his  store  for  quite  a  sum  and  ])ut  his  money  into  the 
business.  Bad  management  soon  summoned  the  sheriff  to  take  an  interest 
in  the  company,  who  attached  everything  in  sight,  among  which  was  a  car- 
load of  Anti-Skeet.  By  fraud  and  deception,  Lewis  induced  the  sheriflF  to 
loosen  up  on  the  carload  of  Anti-Skeet  which  Lewis  shipped  out  of  the 
State,  and  the  Corroco  Company  left  Tennessee  with  several  judgments 
against  it,  and  Stoelker  from  grief  and  humiliation  committed  suicide. 

The  inspectors  acknowledge  upon  the  witness  stand  that  no  ef- 
fort was  made  to  verify  the  above  statements.  Lewis  testifies  that 
he  was  keeping  house  at  the  time  mentioned,  hence  he  could  not 
have  been  in  debt  for  his  board.  There  is  no  evidence  that  the 
sheriff  attached  a  carload  of  Anti-Skeet  or  any  other  property  of  the 
company.  Lewis  enters  his  denial.  The  utter  worthlessness  of 
Nichols'  testimony  may  be  inferred  from  the  following  letter  writ- 
ten by  Stoelker  himself,  sixteen  years  after  he  was  alleged  by 
Nichols  to  have  committed  suicide  through  grief  and  shame.  This 
letter  was  dated  at  Birmingham,  Alabama,  on  December  3,  191 L 
It  is  addressed  to  Lewis  and  signed  by  Otto  Stoelker.  It  was  sub- 
mitted in  evidence  before  the  Congressional  Committee  in  Washing- 
ton: 

Your  favor  of  the  18th  instant  was  duly  received,  but  owing  to  the  rush 
of  Christmas  business,  I  have  been  imal)lc  to  reply  sooner.  You  state  that 
because  of  my  former  business  connection  with  you  in  1891'  or  1895,  it  was 
claimed  by  some  postoffice  inspectors,  during  your  recent  trial,  that  I  had 
committed  suicide.  I  am  astounded  that  oppression  and  injustice  should  be 
carried  so  far  in  a  country  supposed  to  be  the  freest  on  earth.     It  seems 


THE  DREYFUS  CASE  OF  AMERICA  99 

high  time  that  our  people  become  aroused  in  defense  of  their  rights  and  lib- 
erties. 

I  congratulate  you  on  your  vindication,  and  trust  that  you  will  receive 
reparation  for  the  losses  inflicted.  If  I  can  be  of  service  in  any  way  in  this 
matter,  let  me  know. 

In  due  course  of  introducing  Anti-Skeet  and  other  products  of 
the  Corroco  Company,  Lewis,  in  the  summer  of  1896,  made  a  trip 
to  St.  Louis,  and  there  opened  up  an  energetic  advertising  cam- 
paign. Having  ascertained  by  previous  correspondence  that  the  pest 
of  mosquitoes  was  then  troublesome,  Lewis  brought  over  from  Nash- 
ville a  carload  of  Anti-Skeet,  and  contracted  for  full  page  adver- 
tisements in  the  St.  Louis  daily  papers. 

ANTI-SKEET  IN  ST.  LOUIS. 

While  not  quite  a  stranger  to  St.  Louis,  having  formerly  visited 
that  city  in  his  capacity  as  salesman  and  demonstrator  for  the  Wat- 
erbury  Watch  Company,  Lewis'  appearance  on  this  occasion  may 
be  taken  as  the  beginning  of  his  permanent  connection  with  St. 
Louis  as  a  citizen  and  business  man.  What  manner  of  man  was  he 
at  this  period  of  his  career?  What  were  his  first  impressions  of 
St.  Louis?  What  were  the  impressions  of  the  business  community 
with  regard  to  him? 

The  testimony  of  Nichols,  quoting  further  from  the  inspectors' 
report,  is  as  follows: 

Ivcwis  came  to  St.  Louis  and  induced  the  Moffett-West  Drug  Company 
to  exploit  the  business  here  under  the  name  of  the  Coronii  Company.  Re- 
sults were  not  forthcoming,  and  Lewis  abandoned  the  business  to  the  Mof- 
fett-West Drug  Company,  which  now  owns  it. 

Lewis'  own  statement  at  the  Ashbrook  Hearing  is  as  follows: 
That  was  about  sixteen  years  ago.  I  went  to  St.  Louis  from  Nash- 
ville, and  the  sale  of  Anti-Skeet  in  St.  Louis  was  very  heavy.  It  amounted, 
I  believe,  to  some  forty  or  fifty  thousand  dollars  there  in  a  couple  of 
weeks'  time.  One  of  the  principal  purchasers  of  it  was  the  MofPett-West 
Drug  Company.  I  became  personally  acquainted  with  Mr.  Courtney  West 
of  that  concern,  and  also  with  another  partner,  Mr.  Niedringhaus  of  the 
Granite  City  Iron  Ware  Company.  One  afternoon  they  asked  me  if  I 
would  not  join  them  in  a  corporation  which  the  Moffett-West  Drug  Com- 
pany would  back  up  with  ample  capital,  for  the  manufacture  of  a  num- 
ber of  different  preparations,  including  this  "Anti-Skeet."  I  decided 
that  I  would.  The  company  was  incorporated.  Mr.  West,  myself,  and 
Mr.  Niedringhaus,  I  believe,  were  the  stockholders  and  officers.  It  was 
made  a  part  of  the  Moffett-West  Drug  Company,  a  side  concern  to  it, 
their  agreement  with  me  having  been  that  they  would  back  it  up  to  ap- 
proximately one  hundred  thousand  dollars. 

The  St.  Louis  campaign  which  brought  Lewis  to  the  attention  of 
the  MoiFett-West  Drug  Company  affords  an  example  of  his  early 
business  methods.  The  facts  show  him  to  have  been  both  enthusias- 
tic and  practical,  an  unusual  combination.  He  first  placed  orders 
through  a  local  firm  of  advertising  agents,  with  the  principal  St. 
Louis  dailies  for  full  page  advertisements  of  Anti-Skeet,  bearing 
the  legend  ''For  Sale  at  All  Druggists."  He  then  called  upon  the 
principal  wholesale  merchants  and  boldly  demanded  orders  for  one 
hundred  gross  lots  of  Anti-Skeet,  then  a  comparatively  unknown 


100  THE  SIEGE  OF  UNIVERSITY  CITY 

preparation,  upon  the  basis  of  net  cash  with  the  order  or  cash  on  de- 
livery. The  wholesale  merchants  of  the  "Fourth  City"  were  in 
doubt  whether  to  be  the  more  astonished  or  amused  at  Lewis'  au- 
dacity. The  MofFett-West  Company,  however,  smilingl}'^  gave  him  a 
small  order  upon  the  usual  terms  of  credit.  Lewis  offhandedly  re- 
fused. Mr.  Courtney  West  thereupon  declined  to  have  anything 
further  to  do  with  Anti-Skeet  or  its  proprietor.  Lewis  already  knew 
the  effect  of  his  peculiar  methods  of  campaign.  He  retired  to  his 
hotel,  knowing  that  he  could  afford  to  wait  for  his  advertisements 
to  come  out. 

The  plague  of  mosquitoes  was  very  annoying  just  then  in  St. 
Louis,  as  Lewis  had  previously  found  out.  The  full  page  advertise- 
ments of  Anti-Skeet  were  hailed  with  delight.  Buyers  descended 
upon  the  local  drug  stores,  like  the  swarms  of  invading  mosquitoes 
they  wished  to  fight,  ready  to  exchange  their  dimes  for  boxes  of  the 
tablets  advertised.  Moffett-West  and  other  wholesale  merchants 
received  rush  orders  by  telephone,  by  letter,  and  by  special  messen- 
ger, for  Anti-Skeet,  Anti-Skeet,  nothing  but  Anti-Skeet.  Unwilling 
to  purchase  on  Lewis'  terms,  Moffett-West  were  compelled  to  refuse 
all  inquiries-  Other  merchants  bethought  them  of  Lewis'  visit, 
humbled  their  pride,  and  placed  small  orders  with  LcAvis  for  Anti- 
Skeet  for  cash. 

Next  day  witnessed  a  rapidly  increasing  sale.  This  was  stim- 
ulated by  additional  huge  advertisements  and  the  word  of  mouth  en- 
dorsement of  already  satisfied  patrons.  Demands  upon  the  Moffett- 
West  Company  became  incessant.  Finally,  an  associate  of  Mr. 
West's  in  that  concern,  took  upon  himself  the  responsibility  of  dis- 
regarding the  latter's  wishes.  He  took  from  the  cash  drawer  daily 
the  large  sums  required  to  supply  the  demand  of  retail  druggists 
and  other  merchants  for  about  two  weeks  when  mosquitoes  were 
numerous  and  sales  plentiful. 

Lewis  stuck  to  his  cash  terms,  both  upon  the  principle  of  treat- 
ing all  alike,  and  to  avoid  leaving  a  quantitj-^  of  his  product  unsold 
upon  his  own  hands  or  those  of  the  dealers.  Suddenly  a  shifting 
of  climatic,  or  other  conditions,  put  an  end  to  the  mosquito  pest. 
Thereupon,  the  sales  of  Anti-Skeet  were  temporarily  at  an  end. 
The  fact,  however,  that  an  unknown  young  man  without  credit  or 
influential  acquaintances  could  thus,  in  a  single  raid,  lay  open  the 
business  fortresses  of  a  considerable  city,  dictate  terms  to  her  prin- 
cipal merchants,  and  gather  up  a  gross  earning  of  forty  or  fifty 
thousand  dollars  within  so  brief  a  period,  seems  to  have  commanded 
respect  and  admiration. 

THE    CORONA   COMPANY. 

Lewis'  recollection  as  to  the  organization  of  the  Corona  Com- 
pany is  at  fault.  The  official  announcement  of  that  company  to  the 
trade,  according  to  their  advertisement  in  the  "Western  Druggist," 
bears  the  signature  of  W.  B.  Woodward  of  Woodward  &  Tiernan 
Printing  Company,  the  leading  firm  of  printers  of  St.  Louis ;  C.  H. 


THE  DREYFUS  CASE  OF  AMERICA  101 

West  of  the  MofFett-West  Drug  Company  and  C.  P.  Van  Shaak  of 
Peter  Van  Shaak  &  Sons,  wholesale  drug  company  of  Chicago,  as 
directors  and  of  E.  G.  Lewis  as  general  manager.  Lewis  does  not 
appear  to  have  been  an  incorporator  or  stockholder  of  this  concern. 
He  seems  to  have  received,  as  general  manager,  a  proportion  of  the 
profits  on  condition  of  assigning  to  the  concern  the  trade-mark  and 
formula  of  Anti-Skeet  and  Anti-Fly. 

This  announcement  states  that  the  subscribers  have  demonstrated 
their  ability  successfully  to  conduct  a  proprietary  medicine  busi- 
ness. One  of  their  preparations,  Anti-Skeet,  has  reached  the  enor- 
mous sale  of  three  millions  of  boxes  in  one  season.  The  Corona 
Company  has  therefore  been  organized  to  handle  their  preparation 
with  improved  facilities  and  to  extend  their  trade  connections.  Their 
dealings  are  alleged  to  cover  seventy  per  cent  of  the  wholesale  and 
retail  drug  trade  of  the  United  States  and  to  extend  in  addition  to 
many  foreign  countries. 

In  addition  to  Anti-Skeet,  the  Corona  Company  formulated  and 
placed  upon  the  market  the  preparation  known  as  Dr.  Hotts  Cold 
Crackers,  "guaranteed  to  break  up  a  cold  in  one  night."  Thia 
preparation  was  said  to  be  based  on  a  physician's  prescrijjtion,  and 
consisted  of  three  small  tablets.  Each  tablet  was  said  to  be  a  sep- 
arate prescription,  "the  best  for  the  purpose  that  skill  and  all  the 
facilities,  wide  knowledge,  perfect  machinery,  and  unlimited  cap- 
ital can  produce." 

In  regard  to  this  remedy,  Lewis  states  that  the  title  proved  to  be 
the  cause  of  failure.  The  success  of  Anti-Skeet,  Walk-Easy  and 
Anti-Cavity  was  largely  due  to  their  happy  trade-marks.  But  the 
title.  Dr.  Hott's  Cold  Crackers,  suggested  to  many  readers  some- 
thing to  eat  rather  than  a  medical  preparation.  The  advertising  of 
this  medicament,  therefore,  proved  to  be  unprofitable.  It  was  short- 
ly withdrawn  from  the  market. 

Dr.  Flott's  Cold  Crackers,  as  we  have  seen,  masquerades  in  the 
published  lists  as  one  of  the  companies  organized  by  Lewis.  In  this 
connection,  he  makes  the  following  statement: 

There  is  one  other  concern  I  have  been  accused  of  organizing;  that 
is,  Dr.  Hott's  Cold  Crackers.  This  is  merely  one  of  the  preparations  of 
the  Mctfett-West  Drug  Company.  It  is  a  sort  of  cough  mixture  made  to 
"crack"  or  bre;ik  up  a  cold.  It  did  not  succeed  so  well  as  some,  as  many 
persons  thought  it  might  be  something  to  eat — some  sort  of  an  iced  or  cold 
cracker.  The  idea  of  classifying  it  as  one  of  the  companies  I  organ- 
ized is  simply  ridiculous." 

Walk-Easy  and  Anti-Cavity  were  preparations  gotten  up  in  connec- 
tion with  the  proprietary  medicine  business  at  the  time  I  intended  to  be- 
come permanently  identified  with  the  Moffett-West  Drug  Company.  The 
rights  were  not  made  over  to  the  Corona  Company,  however,  and  when 
they  were  unable  to  carry  out  their  agreement  I  kept  those  preparations 
myself.     I   still  own  the   patent   rights   and   trade-marks. 

The  similarity  of  these  to  a  great  number  of  the  proprietary  ar-i 
tides  now  on  the  market  is  at  once  apparent.  The  postoffice  inspec- 
tors' report  asserts  that  after  Lewis'  withdrawal  from  the  Corona 


102  THE  SIEGE  OF  UNIVERSITY  CITY 

Company,  and  the  failure  of  the  Hunyadi  Salts  Company,  Lewis 
was  for  a  time  dependent  upon  sales  of  these  preparations.  The  fol- 
lowing is  their  comment: 

Early  in  1898  Mr.  I-ewis  started  the  Diamond  Candy  Company.  Lewis 
and  Nichols  then  started  the  Walk-Easy  foot  powder,  a  preparation  for 
sweaty  feet,  and  Anti-Cavity,  a  tooth  powder.  They  lived  on  tlie  proceeds 
during  the  summer  of  1898,  but  when  cold  weather  approached,  feet  did 
not  sweat  as  much  and  the  business  dried  up  as  well.  That  concern  owed 
nothing,  however,  as  their  credit  was  below  toleration. 

Lewis  is  thus  depicted  in  violently  contrasting  colors.  On  the 
one  hand  are  the  representations  of  Nichols  adopted  by  the  post- 
office  inspectors  without  investigation.  On  the  other  are  his  own 
business  records  and  the  statements  of  his  associates,  reputable  mer- 
chants engaged  in  extensive  business  dealings  with  the  wholesale 
trade.  The  stock  of  the  Corroco  Company  of  Tennessee  was  held 
by  Lewis  and  his  immediate  associates.  None  was  ever  placed  upon 
the  market  or  sold  to  the  general  public.  He  abandoned  that  con- 
cern and  became  associated  with  the  Corona  Company  of  Missouri 
for  the  best  of  business  reasons ;  namely,  to  secure  the  financial  sup- 
port and  co-operation  of  the  Moffett-West  Drug  Company,  and  to 
become  established  in  a  leading  centre  of  tlie  wholesale  trade.  Lewia 
was  not  among  the  owners  or  incorporators  of  the  ^Moifett-West  or 
the  Corona  companies.  Hence  these  concerns  are  wholly  out  of 
place  in  any  list  of  his  alleged  incorporations.  No  complaints  are 
of  record  concerning  any  of  these  companies  from  investors,  cred- 
itors or  others.  They  are  simply  among  the  stepping  stones  whereby 
Lewis  rose  to  the  amazing  position  which,  for  a  time,  he  afterwards 
occupied  as  one  of  the  most  admired  and  respected  business  men 
of  the  entire  Southwest,  and  one  of  the  best  known  and  most  loved 
men  in  the  whole  of  America. 

THE  HUNYADI  SALTS   COMPANY. 

The  IMofFett-West  Drug  Company  was  caught  in  the  panic  of 
1897  and  financially  crippled.  They  were  unable  to  live  up  to  their 
agreement  to  finance  the  Corona  Company.  Consequently,  Lewis 
was  again  thrown  upon  his  own  resources.  His  second  venture  at 
St.  Louis  is  thus  characterized  by  Nichols,  as  quoted  by  the  post- 
office  inspectors: 

Lewis  then  started  the  Hunyadi  Salts  Company,  taking  W.  B.  Wood- 
ward and  other  St.  Louis  business  men  into  the  enterprise.  The  Hunyadi 
Water  Company  got  after  them  in  court  for  infringement  of  copyright. 
Lewis  determined  to  fight  while  the  others  abandoned  him.  The  result 
was  I^ewis  lost  his  case,  and  owed  considerable  for  printing,  advertising, 
l)ottles,  cartons,  and  bonds.  Some  of  these  debts  on  account  of  street 
car  advertising  were  recently  paid,  to  prevent  further  advertising  in  the 
state  courts. 

That  is  what  Nichols  states.     Lewis'  own  version  is  as  follows : 
After  leaving  the  Corona  Company,   I  organized   an  enterprise   for  the 
manufacture  of  efFervescent  salts.     Among  thrm  was  one  known   as   Hun- 
yadi Salts,  and   another  known  as  Hunyadi  Bromo.     This  business  devel- 
oped   successfully.     We   had   large   sales    throughout   the    United    States; 


THE  DREYFUS  CASE  OF  AMERICA  103 

but  we  got  into  a  law  suit  with  the  Hunyadi  Water  people.  This  dragged 
on  a  3"ear  or  two  and  exhausted  our  resources.  We  won  the  suit.  But, 
meantime,  I  had  been  obliged  to  compromise.  The  Hunyadi  Water  Com- 
pany paid  the  lawyers  fees  and  costs;  and  I  dropped  that  proposition. 

By  an  oversight  on  the  part  of  the  inspectors,  apparently  due 
to  the  omission  of  Nichols  to  furnish  the  name  of  Hunyadi  Bromo 
as  a  separate  proprietary  article,  it  has  escaped  being  included  in 
the  list  of  Lewis'  alleged  schemes  compiled  by  the  publishers  of  the 
Censor,  the  Rural  New  Yorker  and  others.  By  parity  of  reasoning 
it  should  be  included  therein  as  the  Hunyadi  Bromo  Company;  al- 
though in  fact  no  such  incorporation  ever  existed. 

The  Hunyadi  Salts  Company  was  the  last  venture  in  the  field  of 
proprietary  articles  to  Avhich  Lewis  gave  his  own  time  and  attention. 
Many  traces  of  these  early  experiences,  however,  are  indelibly  im- 
pressed upon  his  after  life.  We  may  anticipate  the  future  here 
to  give  an  explanation  which  will  clear  away  the  prejudice  attach- 
ing to  a  number  of  Lewis'  alleged  proprietary  schemes. 

THE  HYGIENIC  REMEDY  COMPANY  AND  OTHERS. 

A  large  amount  of  mail  order  advertising  is  done  by  individuals 
who  employ  trade  names  as  a  mere  matter  of  convenience  in  keying 
their  advertisements.  Sometimes  a  separate  trade  name  is  used  for 
every  article,  or  a  number  of  articles  may  be  sold  under  the  same 
trade  title.  The  word  company  is  used  in  deference  to  custom.  But 
there  is  no  sufficient  reason  why  these  small  ventures  should  be  act- 
ually incorporated.  In  many  cases  the  cost  of  incorporation  would 
be  prohibitive.  The  only  legal  responsibility  thus  incurred  is  that 
the  owner  becomes  personally  liable  for  all  the  debts  of  the  con- 
cern. Thus  the  absence  of  an  actual  incorporation  is  a  protection 
to  creditors,  rather  thkn  the  opposite. 

The  names  of  a  number  of  these  so-called  companies  appear  in 
the  list  of  Lewis'  schemes.  These  include  the  following:  Hygienic 
Remedy  Company;  Edwards  Publishing  Company;  Claire  Art  Com- 
pany; Chemical  Freezer  Company;  Walk-Easy  Company;  Anti-Cav- 
ity Company;  and  many  more.  Lewis  makes  the  following  statement 
in  this  regard: 

The  origin  of  the  Hygienic  Remedy  Company,  Anti-Cavity,  Walk- 
Easy,  and  similar  trade  names,  which  have  been  quoted  among  the  com- 
panies I  have  organized  is  as  follows.  I  suppose  I  must  tell  the  whole 
story. 

Mrs.  Lewis  has  a  sister  who  has  lived  with  us  for  many  years,  and 
has  been  without  means  of  her  own.  In  order  that  she  might  not  feel 
she  was  living  with  us  as  a  matter  of  charity  or  without  return  to  us,  I 
have  helped  to  find  little  novelties  and  preparations  of  one  sort  or  an- 
other for  her  to  sell.  Then  I  would  make  up  advertisements  for  her 
under  whatever  name  she  adopted  for  that  particular  novelty  and  run  them 
in  my  paper.  I  paid  for  the  advertisements  myself.  She  attended  to  the 
business  that  resulted.  This  would  bring  her  a  little  income  each  week, 
and  thus   made  her  independent. 

I  have  preferred  to  do  that  rather  than  give  money  direct.  There  is 
no  one  concerned  with  these  matters  except  myself.  There  is  nothing  ob- 
jectionable in  any  of  the  schemes.  Nobody  else  was  interested.  They 
were  not  companies.    Nobody  was  invited  to  take  stock.    Everyone  of  those 


lot  THE  SIEGE  OF  UNIVERSITY  CITY 

advertisements  was  charged  to  my  personal  account  and  settled  for  at 
regular  intervals.  Mrs.  Lewis  has  helped  her  sister  from  time  to  time 
and  shared  her  profits.  This  has  been  a  nice  little  source  of  modest  in- 
come. I  will  frankly  say  that  at  times  it  has  been  the  only  source  of  in- 
come we  have  had.  This  was  the  case  during  the  early  days  of  tb.e  Win- 
ner ^Magazine.  AVe  started  the  paper  with  nothing,  and  built  it  up  with- 
out capital  and  without  resources.  It  took  every  penny  that  I  could  raise 
and  scrape  to  do  it.  Mrs.  Lewis'  sister  was  then  living  with  us,  and  in- 
stead of  giving  them  spending  money  or  money  with  which  to  run  the 
house,   I  would   run  these  advertisements. 

The  Edwards  Publishing  Company  was  one  of  these  small  affairs.  I 
believe  they  sold  little  stocking-foot  patterns  and  dress  patterns.  They 
would  go  down  town,  pick  up  these  things,  advertise  them  under  these 
trade  names  and  sell  them.  That  was  not  a  company.  There  was  no 
stock  issued.  They  merely  got  up  some  novelty,  gave  it  a  name,  and  ran 
it  for  a  year  or  so,  until  they  shifted  to  something  else. 

The  Claire  Art  Company  was  also  Mrs.  Lewis'  sister.  Her  name  is 
Claire.  It  related  to  little  fancy  work  novelties:  but  was  not  a  company 
and  had  no  stock.  That  is  a  regular  mail  order  custom.  That  is  all  there 
was  to  that. 

The  Faultless  Suspender  Companj-  was  another  of  the  same  sort.  So 
was  the  Chemical  Freezer  Company. 

The  Hygienic  Remedy  Company  was  the  name  finally  adopted  under 
which  to  sell  a  variety  of  different  preparations.  Among  these  were  Walk- 
Easy  and  Anti-Cavity.  They  also  had  a  line  of  several  other  proprietary 
articles  including  a  tooth  paste,  a  complexion  powder,  and  several  good 
pharmaceutical  preparations.  That  was  their  standard  company.  That 
consisted  of  Mrs.  Lewis  and  her  sister.  That  is  not  a  corporation.  No 
stock  was  ever  issued  or  placed  upon  the  market. 

Numerous  testimonials  from  the  patrons  of  these  different  ar- 
ticles are  preserved  by  the  owners.  Their  operations  do  not  seem 
to  be  subject  to  serious  criticism. 

Two  other  concerns  are  also  mentioned  by  the  inspectors  and  the 
press  in  this  connection;  namely,  the  Pacific  Trading  Company  and 
the  Ozark  Herb  Company.  Both  were  organized  by  a  St.  Louis 
chemist  and  mail  order  man  named  Duby. 

Lewis  makes  the  following  explanatory  statement  as  to  the  former 
concern,  which  plays  a  somewhat  important  part  in  the  story  of  the 
"Siege:" 

Duby  was  a  chemist  who  had  developed  quite  a  nice  little  mail  order 
business.  He  was  a  particular  friend  of  Frank  J.  Cabot,  publisher  of 
the  Woman's  Farm  Journal.  After  I  bought  the  Journal  and  Cabot  had 
become  associated  with  me,  Duby  felt  the  need  of  additional  cajiital.  He 
induced  both  Cabot  and  myself  to  join  him  in  the  Pacific  Trading  Com- 
pany. We  had  practically  nothing  to  do  with  it  except  to  furnish  the 
capital.  With  us  it  was  simply  a  venture  whereby  we  might  make  a  few 
hundred  dollars  each.  Duby  organized  the  company  and  ran  the  busi- 
ness. I  afterwards  gave  Nichols  my  interest  in  the  Pacific  Trading  Com- 
pany to  get  him  off  my  hands. 

The  articles  of  incorporation  of  this  concern  are  dated  September 
10,  1901.  'Ihe  incorporators  and  first  directors  are  Messrs.  Cabot, 
Nichols  and  E.  P.  Stark,  who  subscribed  for  twenty,  twenty  and  ten 
shares  of  stock,  respectively.  The  capital  was  mentioned  as  five 
thousand  dollars.  It  was  divided  into  fifty  shares  of  the  par  value 
of  one  hundred  dollars  each.     The  objects  and  purposes  were  stated 


THE  DREYFUS  CASE  OF  AMERICA  105 

as  the  purchase,  sale  and  manufacture  of  all  kinds  of  chemicals  and 
pharmaceutical  compounds  and  preparations,  and  the  acquisition  of 
needful  formulas,  copyrights,  and  letters  patent.  Lewis  does  not 
appear  as  an  incorporator  or  otherwise  as  directly  connected  with 
this  concern.  Any  interest  he  may  have  had  was  by  way  of  loan 
or  merely  as  an  outside  investor.  Our  chief  interest  in  this  com- 
pany is  due  to  the  fact  that  it  figured  in  the  settlement  whereby 
Lewis,  to  quote  his  own  phrase,  aserts  that  he  "gave  Nichols  the  Pa- 
cific Trading  Compan}^  to  get  him  off  his  hands."  Exact  details  of 
this  transaction  do  not  appear  to  be  on  record. 

The  Ozark  Herb  Company  was  also  originated  by  Duby.  Lewis 
stated  that  when  this  company  was  incorporated  he  either  loaned  it 
a  thousand  dollars  or  took  a  thousand  dollars  of  its  stock.  The  loan 
was  afterwards  repaid  or  the  stock  repurchased  by  Duby,  who  was 
the  originator.     Lewis'  interest  was  only  an  accommodation. 

The  A.  W.  Cooley  Chemical  Company,  the  Cathartic  Medicine 
Company,  and  the  Sarsaparilla  Blood  Medicine  Company,  are  pure 
fictions,  at  any  rate  as  far  as  any  connection  of  Lewis  with  them  is 
concerned. 

lewis'  early  ventures. 

The  accompanying  table*  will  assist  the  reader  to  grasp  all  of 
Lewis'  early  ventures  in  their  proper  relations  as  a  single  fact.  His 
activities  as  a  cigar  broker  are  seen  to  have  given  rise  to  the  Corroco 
Company  of  Connecticut,  in  some  sense  the  parent  of  the  Corroco 
Company  of  Tennessee.  His  experience  as  agent  for  precious  stones 
led  to  his  connection  with  the  Bridgeport  Chain  Company  as  sales- 
man. This  in  turn  procured  his  appointment  as  demonstrator  for  the 
Waterbury  Watch  Companj'.  Thus,  in  due  time  he  arrived  at  Nash- 
ville. There;  the  illness  of  Mrs.  Lewis  was  instrumental  in  his  dis- 
covery of  Anti-Skeet.  This  preparation  brought  him  to  the  atten- 
tion of  the  ]MofFett-West  Drug  Compan}^,  and  led  to  the  organization 
of  the  Corona  Company.  The  partial  failure  of  that  concern  again 
threw  him  upon  his  own  resources,  and  led  to  the  organization  of 
the  Hunyadi  Salts  Company'  and  the  temporary  sale  of  Walk-Easy 
and  Anti-Cavity.     Such,  in  brief,  is  a  summary  of  the  early  experi- 

*LEWIS'   FIRST   BUSINESS   CONNECTIONS 

Manager  ^t//  Club,  Trinity  College  (iSgo-i^i)    Wholesale  Diamond  Broker  (iSgo-gs) 

Wholesale  Cigak  Broker  (1890-92)  ^Bridgeport  Chain  Co. 

.,„  r^         c  r^         „  -.,,«  (Salesman   1892-0^) 

^Corroco  Co.  of  Connecticut  nV.ATERBURy  Watch  Co. 

(President   1899-92)  (Demonstrator    1893-94) 

^Corroco  Tablets  (Southern  Sales  Manager  1894-95) 

^Corroco  Company  of  Tennessee 
t  President  1895-96) 
*Anti-Skeet     <Anti-Fly      ^Bug  Chalk      ^Peruvian  Chill  Belt      ^Laxative  Prunes 
'Corona  Company  of  Missouri 
(General  Manager  1896-97) 
*Walk  Easy  *Dit.  Hott's  Cold  Crackers  <Anti-Cavity 

^Hunyadi   S.\lts  Company  ^Diamond  Candy  Company 

(President    1S97)  Lewis   and   Leonard 

*HuNVADi  Salts         ^Hunyadi  Bromo  (Partner   1898) 

^Lewis  an   Employee   Only,     ^incorporated.     ^Not   Incorporated.     ^Proprietary   Articles 

(not   Companies.) 


106  THE  SIEGE  OF  UNIVERSITY  CITY 

ences  which  lie  at  the  background  of  Lewis'  astonishing  career.  The 
Corroco  Company  of  Connecticut,  the  Corroco  Company  of  Tennes- 
see, and  the  Hunyadi  Salts  Company  were  the  only  three  concerns 
in  which  Lewis  definitely  figured  as  incorporator.  No  stock  of  either 
was  placed  upon  the  market.  None  was  sold  to  the  general  public. 
Nor  is  there  any  evidence  whatever  that  anybody  was  defrauded. 

The  Moifett-West  Drug  Company  was  a  large  and  wealthy  cor- 
poration as  to  which  Lewis  had  no  responsibility.  The  Corona 
Company  was  subsidiary  to  that  concern.  Lewis  was  merely  em- 
ployed as  general  manager.  The  incorporators  were  men  of  wealth 
and  standing  in  the  community  of  St.  Louis.  One  of  them  was 
president  of  a  company,  then  and  still  the  largest  and  most  reput- 
able printing  house  of  St.  Louis.  Another  was  a  partner  in  the 
celebrated  granite  ware  manufactories  at  Granite  City,  Illinois.  A 
third  was  president  of  a  wholesale  drug  business,  a  very  respectable 
concern  of  the  city  of  Chicago.  The  fact  that  such  men  as  these 
adopted  Lewis'  preparation  known  as  Anti-Skeet  and  their  an- 
nouncements concerning  it,  would  certainly  seem  to  indicate  that  in 
their  opinion,  at  least,  it  was  in  no  wise  fraudulent. 

Two  of  the  incorporators  of  the  Corona  Company,  Messrs.  West 
and  Woodward,  joined  Lewis  in  the  Hunyadi  Salts  Company  ven- 
ture, a  fact  which  would  seem  to  indicate  that  the  company  was  a 
reputable  concern.  Its  failure  was  due  solely  to  the  pressure  of 
wealthy  competitors,  proprietors  of  the  famous  Hunyadi  Waters. 
The  management  does  not  appear  to  have  been  derelict  in  any  way. 
No  presumption  arises  in  relation  to  any  of  these  concerns  that 
would  not  attach  to  the  proprietors  of  any  similar  line  of  business. 

Some  half  dozen  of  the  alleged  companies  attributed  to  Lewis 
are  merely  the  names  of  the  proprietary  articles.  Others  are  trade 
names  not  incorporated.  Still  others  are  incorporations  in  which 
Lewis  had  no  part.  Many  are  pure  figments  of  someone's  imagina- 
tion. No  fewer  than  twenty-one  of  the  alleged  schemes  compris- 
ing the  list  described  by  Dillon  of  the  Rural  New  Yorker  as  being 
"nearly,  if  not  quite,  exhaustive,"  are  thus  disposed  of,  and  seen  to 
be  what  they  are. 

One  hesitates  to  characterize  this  enumeration  in  a  supposedly 
reputable  periodical,  of  various  proprietary  articles  placed  upon  the 
market  by  Moffett-West  Drug  Company  and  one  of  their  subsidiary 
concerns,  as  so  many  separate  incorporations  among  the  false  and 
fraudulent  schemes  of  E.  G.  Lewis.  Yet  this  list  is  padded  by  such 
terms  as  Anti-Skeet  Company;  Anti-Cavity  Company;  Bug-Chalk 
Company ;  Anti-Fly  Company ;  Walk-Easy  Company  and  others,  for 
the  obvious  j^urpose  of  creating  prejudice  against  Lewis'  later  en- 
terprises.    The  absurdity  of  this  is  manifest. 

Messrs.  Parke-Davis  &  Co.  of  Detroit,  INIichigan,  and  many  other 
reputable  merchants,  issue  to  the  drug  trade  catalogues  of  proprie- 
tary articles  containing  many  thousand  different  formulae.  The 
publication  of  the  trade  titles  of  these  different  articles  followed  by 


THE  DREYFUS  CASE  OF  AMERICA  107 

the  word  "company"  could  hardly  be  taken  as  evidence  that  the  pro- 
jDrietors  of  that  concern  were  the  authors  of  an  extraordinary  num- 
ber of  illegitimate  schemes.  Inquiry  through  the  commercial 
agencies  or  the  ordinary  channels  of  the  trade,  would  readily  dis- 
close that  many  of  the  companies  falsely  attributed  to  Lewis  had 
no  existence  except  in  the  spleen  or  fancy  of  the  sponsors  for  these 
gross  misrepresentations. 

Dillon  opens  the  paragraph  introducing  his  truly  amazing  list  of 
some  sixty- five  separate  alleged  schemes  with  the  remark:  "We 
would  not  be  justified  in  attempting  a  complete  list."  About  fifty 
titles  are  alleged,  directly  or  by  inference,  to  be  separate  incorpora- 
tions. Official  records  establish  beyond  peradventure,  however,  that 
the  name  of  E.  G.  Lewis  appears  as  an  incorporator  in  fewer  than 
tAventy  separate  instances,  the  circumstances  as  to  all  of  which  will 
be  later  related.  Ignorance,  malice,  or  criminal  carelessness  may 
account  for  this  discrepancy.  Its  total  inconsistency  with  every 
sentiment  of  candor,  fairness,  or  sincerity  of  purpose  is  manifest. 
Such  gross  and  obvious  manipulation,  such  piling  up  of  evident  mis- 
statement upon  misstatement,  operates  upon  the  candid  mind  like 
an  overdose  of  poison.  The  system  rejects  the  entire  nauseous  mix- 
ture, and  escapes  the  dangers  attending  the  more  subtle  administra- 
tion of  the  same  poisonous  elements  in  lesser  quantities  and  by  slow 
degrees. 

THE    PROPRIETARY   MEDICINE    BUSINESS. 

Lewis'  activities  as  a  manufacturer  and  vendor  of  proprietary 
articles  were  confined  to  a  portion  of  the  decade  between  1888  and 
1898.  This  was  many  years  before  the  agitation  against  the  so- 
called  patent  medicine  business  which  culminated  in  the  notable  ex- 
pose by  Sanmel  Hopkins  Adams  in  Collier's  Weekly,  called,  "The 
Great  American  Fraud,"  and  in  the  editorials  against  the  same  evils 
of  Edward  W.  Bok  in  the  Ladies'  Home  Journal.  That  agitation 
has  in  recent  years  created  much  public  sentiment  against  all  patent 
medicines.  This  entire  agitation  has  borne  fruit  in  the  National 
Pure  Food  Legislation,  and  the  campaign  in  that  behalf  of  Dr. 
Wiley.  All  this  subsequent  change  of  sentiment  tends  in  no  small 
degree,  to  strengthen  the  prejudice  which,  from  the  statements  of 
Nichols  and  the  inspectors,  attaches  to  Lewis'  early  and  perfectly  in- 
nocent commercial  ventures.  A  prejudice  so  founded  is  wholly  irra- 
tional. Prior  to  this  recent  agitation  the  most  reputable  newspapers 
and  periodicals  willingly  accepted  the  advertising  of  the  so-called 
patent  medicines  and  proprietary  articles  without  question.  Collier's 
Weekly  itself  must  blush  for  the  former  contents  of  its  advertising 
columns.  The  revelations  and  arguments  adduced  against  this  class 
of  trade  were  then  unheard  of,  and  unthought  of.  Many  persons 
then  engaged  in  business  of  this  character,  and  many  periodicals 
aided  and  abetted  them,  who  might  not  have  done  so,  had  the  con- 
clusions and  reflections  suggested  by  present  knowledge  been  at  that 
time  forcibly  presented  to  their  minds. 


108  THE  SIEGE  OF  UNIVERSITY  CITY 

There  is_,  however^  notliing  to  indicate  that  the  substances  em- 
ployed in  the  proprietary  articles  sold  by  Lewis  would  have  been 
objectionable  to  the  most  conscientious  reformer,  or  contrary  to  the 
regulations  of  the  Pure  Food  and  Drugs  Act  of  1906.  Lewis  is  not 
accused  of  having  vended  alcoholic  preparations,  or  opium,  or  mor- 
phine derivatives,  or  any  of  the  subtle  poisons  against  which  the  re- 
formers so  properly  and  feelingly  inveighed.  The  whole  attempt  to 
belittle  and  discredit  Lewis  in  this  fashion,  when  strictly  analyzed, 
falls  of  its  own  weight.  "The  mountain  labors  and  brings  forth  a 
mouse." 

The  two  titles,  Anti-Skeet  and  People's  United  States  Bank,  do, 
nevertheless,  form  a  remarkable  antithesis,  which  is  much  harped 
upon  in  the  official  literature  at  the  Postoffice  Department,  and  in 
the  ncAvspapers.  These  terms  may  fairly  be  taken  to  represent  the 
two  extreme  points  of  Lewis'  career.  They  represent  the  beginnings 
and  the  end  of  his  imaginative  and  practical  efforts,  as  Watts'  tea 
kettle  and  his  pumping  engine  represent  two  extremes  of  the  inven- 
tive engineer. 

Postmaster-General  Cortelyoxi,  under  cross-examination,  has  tes- 
tified substantially  as  follows: 

I  recall  that  one  report  on  the  People's  United  States  Bank  outlined  Mr. 
lewis'  career.  Statements  were  made  that  he  was  born  in  a  certain  place, 
was  first  here  and  then  there,  and  connected  with  various  lines  of  business, 
ending  up  finally  at  St.  Louis.  These  were  simple  facts  elicited  in  course 
of  the  investigation.  The  kinds  of  business  he  had  previously  engaged  in 
and  how  he  had  conducted  them  had  a  certain  bearing.  The  career  of  any 
man  has  a  bearing  upon  his  present  operations.  It  gives  some  indications 
of  his  methods  and  leads  to  the  discovery  of  things.  Any  man's  past  record 
might  have  a  bearing  on  what  he  is  doing  today,  but  not  materially.  That 
cuts  very  little  figure. 

"Past  question,"  says  Gen.  Lew  Wallace,  "all  experience  is  ser- 
viceable to  us."  Lev/is'  early  ventures  in  the  drug  trade  brought 
about  two  results  of  life-long  consequence.  The  first  was  that  they 
caused  him  to  become  a  publisher.  As  an  extensive  advertiser  of 
proprietary  articles,  he  had  the  handling  of  many  large  appropria- 
tions. He  was  exposed  to  the  solicitation  of  advertising  agencies, 
and  especially  to  the  visits  of  advertising  men  connected  with  the 
early  type  of  mail  order  periodical.  From  these  contacts  and  his 
own  early  experience,  came  his  knowledge  of  the  mail  order  field. 
The  knowledge  thus  obtained  revived  his  boyish  taste  for  printers' 
ink.  Later  it  enabled  him  to  build  up,  for  the  Winner  and  the 
Woman's  IMagazine,  the  third  largest  mail  order  advertising  patron- 
age in  the  world. 


CHAPTER  IV. 

THE  FOUNDING  OF  THE  WINNER. 

Lewis  vs.  Ex-Governor  Hill;  A  Contrast — Nichols'  Biography 
OF  Lewis — A  Word  About  Periodicals — The  Diamond 
Candy  Company — The  Barrett  Watch  Episode — Early 
Advertising  Policies — The  Mail  Order  Protective  Asso- 
ciation— Commercial  Success  Assured — The  Endless 
Chain — -The  Masthead  of  the  Winner — -The  Ten- 
Cent-a-Year  Idea— Mile-Stones  of  Progress. 

The  first  issue  of  the  Winner  Magazine  bears  date  of  May,  1899. 
Six  years  later  Lewis  claimed  to  be  a  millionaire.  The  Woman's 
Magazine,  successor  to  the  Winner,  was  then  said  by  him  to  be 
earning  over  a  quarter  of  a  million  a  year.  This  Monte  Cristo 
change  from  poverty  to  affluence;  this  spectacular  bound  from  the 
lowest  point  of  his  career  to  the  highest;  this  sensational  and  almost 
unbelievable  access  to  prosperity,  has  riveted  the  attention  of  the 
newspaper  paragraphers  of  a  continent.  Lewis  himself  has  said 
that  he  had  one  dollar  and  twenty-five  cents  in  his  pocket  when  he 
decided  to  found  the  Winner  Magazine.  When  pressed  as  to  the  lit- 
eral accuracy  of  this  statement,  he  replied  facetiously  that  he  could 
remember  about  the  twenty-five  cents,  but  was  not  sure  about  the 
dollar.  Lewis  embodies  this  statement  in  one  of  his  circular  letters 
in  the  promotion  of  the  People's  Bank.  He  responded  as  follows  to 
the  sarcastic  challenge  of  PostofBce  Inspector-in-Charge  Fulton, 
"Explain  the  process  of  organizing  the  Woman's  Magazine  on  a 
cash  cajDital  of  one  dollar  and  twenty-five  cents." 

The  organization  of  a  magazine  from  a  start  of  one  dollar  and  twenty- 
five  cents  into  the  largest  publication  of  any  sort  in  the  world  has  been 
similar  to  the  raising  of  a  new  born  babe  into  a  president  of  the  United 
States.  That  process,  I  believe,  has  been  carried  out  fifty-two  times.  I 
had  the  idea  and  secured  the  credit,  backing  and  result  by  ceaseless  work 
night  and  day  for  years.  The  banks  of  St.  Louis,  Chicago  and  New  York 
have,  during  that  period,  loaned  me  approximately  two  million  dol- 
lars. I  do  not  recall  having  one  of  these  notes  protested.  By  work  and 
the  use  of  my  credit,  I  have  built  up  this  business  until  it  is  universally 
regarded,  with  the  possible  exception  of  those  who  have  been  unable  to 
do  likewise,  as  in  many  respects,  a  leading  publication  of  the  world. 

Tlie  political  opponents  of  the  late  John  Johnson,  Governor  of 

Minnesota,  once  tried  to  discredit  him  by  asking  the  voters  if  they 

"wanted  as  governor  a  man  whose  mother  was  a  washer-woman,  and 

who,  as  a  young  lad,  had  collected  and  delivered  the  wash  by  which 

the  family  was  supported.     They  answered  at  the  polls  by  giving 

him  an  overwhelming  majority.     It  used  to  be  the  chief  glory  of  our 

109 


no  THE  SIEGE  OF  UNIVERSITY  CITY 

democracy  that,  however  lowly  a  man's  origin,  he  might  rise  to  any 
height  his  merit  would  permit,  unhampered  and  unashamed.  The 
instances  of  Garfield  tramping  barefoot  behind  the  tow-path  mules, 
and  of  Lincoln,  the  rail  splitter,  are  of  absorbing  interest  to  every 
school  boy,  because  they  are  supposed  to  symbolize  an  inalienable 
right  of  every  free-born  American. 

Lewis,  the  Yankee  manufacturer  of  proprietary  articles,  the  pat- 
ent medicine  man,  the  vendor  of  nostrums,  might  well  have  been 
added  to  the  ranks  of  these  immortals  as  an  ensampler  of  the  moral- 
ist's favorite  virtues  of  energy,  enthusiasm,  courage  and  economy, 
except  for  tlie  misfortune  of  having  been  born  too  late. 

LEWIS    vs.    GOVERNOR    HILL;   A    CONTRAST. 

A  striking  contrast  is  afforded  by  comparison  of  Lewis'  experience 
with  the  postofHce  officiary  to  that  of  his  business  rival,  ex-Governor 
Hill  of  Maine.  The  latter  preceded  Lewis  by  several  years  as  a  pub- 
lisher of  mail  order  periodicals.  His  publications  were  among  the 
most  conspicuous  violators  of  all  the  postal  laws  and  regulations, 
the  exclusive  application  of  which  laws  to  Lewis  plucked  from  him 
both  the  profits  and  honors  of  his  labor.  Hill  was  ahead  of  Lewis 
by  so  many  years  as  to  become  a  member  of  the  Republican  auto- 
cracy which  for  some  years  past  has  administered  the  law  in  the 
interest  of  its  own  aggrandizement.  "As  goes  the  state  of  Maine, 
so  goes  the  Union."  Hill  as  a  prominent  and  influential  politician 
in  this  pivot  state,  appears  to  have  been  immune  from  governmental 
interference.  He  has  since  become  the  chairman  of  the  National 
Republican  Committee.  As  such  he  enjoys  the  approval  of  the 
men  who  rule  over  the  destinies  of  the  American  people.  Lewis 
entered  into  the  same  arena  only  to  find  that  the  American  ideal  of 
equal  opportunity  had  become  a  thing  of  other  days. 

Lewis  built  the  Winner  upon  the  model  afforded  by  Hill's  and 
similar  publications.  He  at  first  adopted  the  same  methods.  He 
indulged  in  similar  practices.  But  he  afterwards  did  more  than 
they.  He  became  a  reformer.  He  modified,  refined  and  improved 
upon  the  practices  of  Hill  and  other  rivals,  until  his  publications 
were  perhaps  the  least  objectionable  of  any.  Certainly  they  were 
superior  to  those  of  Vickery  and  Hill,  which  were  exempt  from  the 
criticism  of  the  latters'  political  associates. 

Suddenly  the  agents  of  Government  discovered,  or  thought  they 
did,  that  Lewis'  previous  business  ventures  had  been  unsuccessful. 
He  had  been  in  debt  for  his  board,  it  was  alleged.  Lincoln  was  in 
debt  for  his  board  on  one  occasion;  but,  happily  for  him,  that  was 
before  it  was  deemed  prosier  for  postoffice  inspectors  to  conduct  ex- 
haustive investigations  into  men's  personal  affairs.  He  had  per- 
suaded others  to  join  him  in  a  manufacturing  company,  which  had 
turned  out  badly.  He  had  sold  nostrums.  A  former  associate,  it 
was  alleged  (falsely),  had  committed  suicide  upon  his  account. 
Everything  he  touched  had  failed. 

He  was,  therefore,  entitled  to  no  credit  for  the  great  new  enter- 


Homes  of  E.   G.  Lewis  and  his  brother,   John   W.   Lewis,  respectively 


Views  of  the  srounds  and  nut-huildinss  of  the  Lewis  residence  at  University  Citv  ■ 
the  conservatory,  duck  pond,  garage,  spring,  rustic  bridge  and  summer  house.  The 
small  views  are  snap-shots  taken  by  Lewis 


THE  DREYFUS  CASE  OF  AMERICA  113 

prise  wliieh  had  sprung  up  niagically  beneath  his  hand.  His  pre- 
vious ventures  having  proved,  in  the  inspector's  opinion,  unworthy, 
tlie  new  ones  also  were  assumed  to  be  a  mushroom  growth.  His 
whole  history  must  therefore  be  placarded  to  the  world.  His  worst 
enemy  must  be  selected  to  narrate  the  story  of  his  past.  This  with- 
out verification  must  be  accepted  as  the  standard  by  which  to  meas- 
ure his  veracity  and  the  probity  of  his  intentions.  The  whole  must 
then  be  given  to  the  press  in  order  that  the  hands  of  his  oppressors 
might  be  upheld  and  all  his  efforts  at  rehabilitation  be  discredited. 
Such  are  some  of  the  reflections  that  suggest  themselves  when  the 
facts  about  the  Mail  Order  Publishing  Company  and  the  Winner 
are  placed  in  contrast  with  the  tissue  of  fabrications  given  by  Nich- 
ols to  the  postoflice  inspectors,  by  them  to  the  press,  and  by  the 
press  to  the  world. 

NICHOLS^    BIOGRAPHY    OF    LEWIS. 

The  following  paragraphs  from  the  inspectors'  secret  report  on 
the  People's  Bank,  if  put  in  their  true  light  as  being  colored  by 
Nichols'  hostility  to  Lewis  and  warped  by  his  tortuous  personality, 
would  be  wholly  insignificant.  They  gain  force  and  sinister  signifi- 
cance only  as  embodied  in  an  official  act  which  set  in  motion  the 
powers  entrusted  to  the  Government  by  the  people,  not  for  the  pro- 
tection, but  for  the  destruction  of  a  wholesome  industry.  The  inspec- 
tors say: 

Early  in  1898,  Mr.  Lewis  started  the  Diamond  Candj  Company  in 
partnership  with  H.  M.  Leonard.  Orders  began  to  come'  in,  and  Lewis 
sent  for  Nichols  to  come  and  take  care  of  the  business  while  he  went  on 
the  road.  Nichols  took  charge,  but  money  faUed  to  come;  and  after  he 
tired  of  paying  bills  out  of  his  own  pocket,  Scudder-Gale  &  Company 
brought  suit  for  unpaid  bills,  placed  Leonard  in  bankruptcy,  and  put  the 
Diamond  Candy  Company  out  of  business. 

In  October,  1898,  they  started  the  Progressive  Watch  Company,  a  plan 
to  sell  watches  by  the  endless  chain  system,  through  the  medium  of  a  book, 
for  one  dollar  each.  The  sales  were  not  plentiful  enough,  and  the  plan 
was  changed  to  the  use  of  cards  instead  of  a  book,  the  cards  being  ten 
cents  each.  That  business  prospered,  but  the  Postoflice  Department 
stopped  the  business  as  "a  fraud"  about  April  1,  1899.  They  changed  the 
system  to  what  was  called  a  simple  instead  of  a  compound  sj^stem,  with  a 
subscription  card  for  a  magazine,  thinking  they  would  get  some  mall 
order  house  to  take  over  the  list  of  subscribers.  The  papers  and  mag- 
azines shrunk  from  the  plan,  so,  in  self-defense,  they  started  the  "Winner 
Magazine."  The  Pi-ogressive  Watch  Company,  which  was  then  called  the 
Mail  Order  Publishing  Company,  was  merged  into  the  Winner  Magazine, 
and  soon  thereafter  they  started  the  National  Installment  Company,  de- 
signed to  sell  cheap  jewelry  on  the  installment  plan  at  fabulous  prices,  ex- 
pecting to  get  cost  out  of  first  payment  and  all  after  that  to  be  profit. 
The  scheme  did  not  pay,  and  Lewis  and  Nichols  had  some  disagreement 
over  the  scheme,  and  they  dropped  the  plan  and  used  the  letters  received 
as  evidence  of  the  benefits  of  advertising  in  the  Winner  Magazine. 

In  connection  with  the  Winner  Magazine,  they  then  organized  the  "U. 
S.  Mail  Order  Protective  Association,"  designed  to  collect  bad  debts, 
which  the  trust  scheme  advertisers  passed  upon  as  no  good.  The  busi- 
ness was  confined  mostly  to  children  who  had  sent  for  cheap  jewelry,  per- 
fume tablets,  package  blueing,  sachet  powders,  etc.,  and  many  were  fright- 
ened into  paying.     The  money  collected  passed  to  the  credit  of  the  trust 


114  THE  SIEGE  OF  UNIVERSITY  CITY 

scheme  man,  and  lie  was  paid  by  certain  advertising  space  in  the  Win- 
ner, and  Lewis  and  Niciiols  lield  the  money.  The  lists  furnished  were  used 
for  sample  copies  of  the  AVinner.     The  business  soon  ceased. 

The  above  are  in  substance  the  charges  made  by  the  inspectors 
upon  which  Lewis  is  denied  due  credit  for  one  of  the  most  marvelous 
achievements  in  the  entire  record  of  the  publishing  industry.  Upon 
such  a  basis  rests  in  large  part  the  widespread  jDrejudice  against 
this  portion  of  Lewis'  career. 

A  WORD  ABOUT  PERIODICALS. 

The  candid  reader  must  disabuse  his  mind  wholly  of  the  atmos- 
phere of  hostility  and  interpret  for  himself  the  facts  which  here 
confront  him.  This  publishing  of  a  mail  order  journal  is  the  basic 
fact  of  Lewis'  career.  Eor  Lewis  is  primarily  a  publisher.  The 
Winner,  afterwards  the  Woman's  Magazine,  was  his  first  and  his 
representative  publication.  Any  periodical  by  its  very  nature  re- 
veals the  character  of  tliose  who  fashion  it.  A  publisher  impresses 
his  personality  indelibly  upon  his  wares.  His  ideals  and  his  state 
of  culture  are  alike  patent  in  his  columns.  He  must  needs  share 
his  inmost  confidence  with  his  readers.  All  this  Lewis  has  done  to 
a  marked  degree  in  the  early  volumes  of  the  Winner  and  the  Wom- 
an's Magazine.  By  them  he  stands  or  falls.  The  testimony  of 
Nichols,  or  of  the  inspectors,  as  to  what  he  may  have  done,  or  could 
have  done,  or  failed  to  do,  is  totally  irrelevant  and  immaterial.  Men 
do  not  gather  thorns  from  figs,  nor  grapes  from  thistles.  Let  us 
look  at  Lewis'  own  output,  and  judge  him  by  the  standards  which 
he  himself  has  set. 

A  periodical  is  a  stool  which  must  have  three  sound  legs  of  policy. 
The  stool  itself  may  be  said  to  be  the  physical  thing  published; 
that  is,  the  Avhite  paper  impressed  with  printer's  ink.  The  three 
legs  are  the  editorial,  advertising  and  circulation  policies  of  the 
owner.  All  these  are  equally  essential.  The  default  of  either  with- 
draws a  necessary  support  and  topples  the  whole  structure  to  the 
ground.  The  founder  of  a  periodical  must,  therefore,  have  at  least 
the  primary  instincts  of  an  editor,  an  advertising  solicitor,  and  a  cir- 
culation builder.  The  great  publishers  are  individuals  who  combine 
all  these.  And  Lewis  is  one  of  the  great  publishers  of  the  world. 
The  origins  of  the  policies  of  the  Winner  and  the  Woman's  Maga- 
zine on  these  three  lines  may  be  traced  to  as  many  portions  of 
Lewis'  career. 

A  tradition  of  the  publishing  business  runs  to  the  effect  that  the 
men  of  mark  have  owned  printing  presses  and  brought  out  some 
sort  of  a  juvenile  publication  in  their  'teens.  Lewis  is  no  excep- 
tion. The  rectory  at  Meadville,  Pa.,  when  the  Rev.  William  H. 
Lewis,  his  father,  was  rector  in  that  city,  was  located  upon  Diamond 
Square,  hence  Diamond  News  was  the  name  of  Lewis'  first  baby. 
This  is  the  way  in  which  he  tells  the  story: 

My  first  attempt  in  the  publishing  line  was  in  the  rectory  at  Mead^ 
ville,  Pennsylvania.  Two  issues  came  out.  Then  it  went  into  honorable 
liquidation.     I  sold  a  billy-goat  to  ])ay  back  the  subscribers. 


THE  DREYFUS  CASE  OF  AMERICA  115 

The  itch  to  be  a  publisher,  once  it  gets  into  a  man's  blood,  dies 
hard.  Nobody  who  knows  anything  about  the  publishing  business 
will  doubt  that  Lewis  always  had  the  making  of  some  sort  of  period- 
ical as  his  aim.  Representatives  of  advertising  agencies  and  of 
countless  publications  found  him  a  congenial  spirit.  He  drank  up 
their  stories  about  their  own  publications,  and  their  views  about  the 
trade,  with  a  willing  and  greedy  ear.  His  experience  as  an  adver- 
tiser, his  talks  with  advertising  men,  and  his  observations  of  the 
campaigns  of  his  competitors,  undoubtedly  contributed  to  shape  the 
policy  in  that  regard  which  later  became  a  distinctive  feature  of 
the  magazine  as  yet  unborn. 

But  a  periodical  must  have  circulation.  "A  legitimate  list  of  sub- 
scribers" is  a  requirement  of  the  law.  How,  without  capital,  to 
obtain  subscribers  in  advance  of  publication  was  the  problem  which 
lay  across  Lewis'  path  and  barred  his  way  at  the  very  threshold  of 
his  ambition. 

The  solution  of  this  problem  came  by  one  of  those  sudden  intui- 
tions which  are  characteristic  of  the  insight  men  call  genius.  It 
was  a  chance  remark  of  an  old  smoker  that  suggested  the  Corroco 
tablets.  An  old  negro  mammy  killing  mosquitoes  suggested  Anti- 
Skeet.  The  mention  of  a  news  item  in  a  casual  conversation  on  a 
doorstep  was  the  immediate  occasion  of  the  founding  of  the  Win- 
ner and  the  Woman's  Magazine. 

THE    DIAMOND    CANDY    COMPANY. 

The  story  of  the  Diamond  Candy  Company  intervenes  at  this 
point,  because  it  was  this  that  led  indirectly  to  the  Winner.  Lewis 
and  Nichols  can  best  tell  in  their  own  words  this  story: 

My  next  door  neighbor,  says  Lewis,  a  Mr.  Leonard,  came  to  me  in 
1898,  and  told  me  he  had  a  sort  of  molasses  candy  which  he  was  con- 
vinced would  have  a  very  large  sale  under  a  plan  by  which  he  proposed  to 
put  it  up.  He  undertook  to  furnish  the  capital.  I  was  to  look  after  the 
sales,  and  he  was  to  do  the  manufacturing.  I  agreed,  and  we  started  the 
business  as  partners.  I  sold  so  much  of  that  candy  and  a  number  of  others, 
that  Mr.  Leonard  could  not  fill  the  orders.  He  did  not  even  have  the  money 
with  which  to  buy  molasses.  That  was  the  time  of  the  Omaha  Exposi- 
tion. I  secured  the  concession  for  the  entire  Exposition;  but  when  I  got 
back  instead  of  the  orders  having  been  filled,  they  were  stacked  up  there 
untouched.  The  company  could  not  fill  them.  The  matter  was  in  a  state 
of  chaos,  so  I  dissolved  the  company.  I  paid  the  debts  myself  out  of  my 
salary  and  earnings  during  the  folio%ving  two  years.  I  went  to  the  dif- 
ferent concerns  to  which  the  company  was  indebted  and  told  them  the  cir- 
cumstances. I  voluntarily  assumed  the  entire  indebtedness,  and  ultimately 
paid  it  all. 

The  Diamond  Candy  Company  was  not  incorporated,  but  was  a 
partnership,  therefore  no  stock  was  sold.  And  as  Lewis  paid  the 
current  bills,  nobody  was  defrauded.  He  still  preserves  vouchers 
for  the  total  amount  of  some  three  hundred  dollars  for  various  forms 
of  merchandise  paid  for  by  him  in  this  behalf.  The  following  is 
from  Nichols'  testimony  at  the  Ashbrook  Hearings: 


116  THE  SIEGE  OF  UNIVERSITY  CITY 

When  Mr.  Lewis  had  this  candy  company,  lie  invited  me  to  go  to  St. 
Louis.  I  found  when  I  arrived  that  he  had  quite  a  candy  business  there 
with  lots  of  orders  on  hand.  He  had  an  order  supposed  to  cover  all  the 
molasses  candy  and  angel  cake  concessions  at  the  Omaha  Exposition.  Mr. 
Leonard  had  then  spent  about  all  the  money  he  had  or  could  spare.  I  be- 
lieve the  first  bill  I  paid  out  of  my  own  pocket  was  for  clean  towels.  It 
struck  me  as  so  funny  that  they  did  not  have  a  dollar  and  a  quarter  to 
pay  a  small  bill  of  that  kind,  that  I  have  remembered  it  all  this  time.  At 
any  rate,  the  candy  business  did  not  hold  good. 

About  this  time,  Lewis,  Leonard,  and  myself  were  sitting  on  Lewis' 
front  steps  one  night  talking  about  a  man  in  Chicago  selling  automobiles 
on  the  endless  chain  sj'stem.  "We  finally  adopted  that  endless  chain  plan 
for  a  watch  scheme.  We  made  iip  ten  coupons  into  a  liook,  and  sold  the 
book  for  one  dollar.  You  would  buy  the  book  for  one  dollar,  sell  these 
ten  coupons  to  ten  of  your  friends  at  ten  cents  each  and  thus  get  back 
your  dollar.  Each  of  these  persons  would  then  bring  their  coupons  to  us, 
and  get  in  exchange  a  numbered  book  from  which  they  could  sell  the 
coupons  to  ten  of  their  friends;  and  thus  they,  too,  would  get  their  dollar 
back.  Meantime,  after  all  the  first  ten  coupons  came  back  to  us,  we 
then  had  one  hundred  coupons  out.    And  then  you  got  a  watch. 

THE  BARRETT  WATCH  EPISODE. 

In  furtherance  of  this  j)lan,  the  articles  of  incorporation  of  the 
Progressive  Watcli  Company  were  filed  under  the  laws  of  Missouri 
in  January,  1899.  The  incorporators  were  Lewis,  Nichols  and  Mrs. 
Lewis,  who  subscribed  respectively  for  twenty,  twenty  and  ten  shares 
of  its  capital  stock  of  five  thousand  dollars.  This  was  divided  into 
fifty  shares  of  the  par  value  of  one  hundred  dollars  each.  Th^ 
three  original  certificates  of  stock,  dated  January  29,  1899,  still 
remain  in  the  stock  book,  never  having  been  detached.  No  other 
certificates  ever  were  issued.  No  stock  was  sold;  and,  of  course, 
no  one  could  have  been  defrauded. 

The  following  is  Lewis'  statement  on  this  head  before  the  Ash- 
brook  Committee: 

My  attention  was  attracted  in  1898  to  what  is  known  as  the  endless 
chain  plan.  I  commenced  to  evolve  that  plan  in  my  mind  as  a  means  of 
getting  advance  subscriptions  for  my  new  magazine,  which  was  not  then 
started.  I  had  not  at  that  time  even  settled  on  its  name.  Each  person 
who  got  a  certain  number  of  subscriptions  under  this  endless  chain  sys- 
tem was  to  receive  a  bicycle,  or  for  other  numbers,  a  watch,  or  other 
premium.  The  cost  of  the  premiums  at  wholesale  was  from  twelve  to  eigh- 
teen dollars. 

It  had  been  my  ambition  to  be  a  publisher  practically  all  my  life.  Ever 
since  my  first  attempt  at  Meadville  I  had  1)een  trying  to  make  enough 
money  to  go  into  the  ])ublishing  business.  I  had  the  idea  of  bringing  about 
the  })uI)lication  on  an  enormous  scale  of  a  very  low  priced  magazine.  This 
was  before  the  time  of  cheap  magazines.  I  believe  it  was  before  Munsey's 
ten-cent  magazine  broke  the  ice.  The  thougiit  I  had  was  that  if  pul)lish- 
ers  were  spending  ninety  per  cent  of  the  subscription  price  in  olitaining 
the  subscriptions — which  I  knew  from  investigation  to  i)e  the  fact — then 
the  low  price  of  the  magazine  would  take  the  place  of  premiums,  and  It 
would  sweep  the  country.  I  thought  this  was  the  way  to  go  about  it  in- 
stead of  spending  about  ninety  per  cent  to  sell  the  magazine. 

After  my  experience  with  the  Diamond  Candy  Company,  I  began  to 
cast  about  in  my  mind  for  means  to  start  such  a  magazine.  I  had  come  to 
the  conclusion  that  I  might  as  well  start  at  St.  Louis  as  anywhere.  Just 
then  I  hit  upon  this  endless  chain  idea.     The  rumor  is  that  I  started  with 


^University  City  street  scene  xn  winter.     The  Lewis  residence  is  at  the  left 
^Rear  view  of  the  Leivis  residence.     Observe  the  swimming  pool  and  pergola 


1 1   i 


m    M 


Types  of  homes  erected  in  University  City  by  officers  and  directors  of  the  Lewis 
Publishing  Company 

Residences  of  '^City  Clerk  Francis  V.  Putnam,  -Alderman  James  F.  Coyle,  and  ^Frank 
J.  Cabot 


THE  DREYFUS  CASE  OF  AMERICA  119 

one  dollar  and  twenty-five  cents.  I  am  certain  of  the  twenty-five  cents 
but  not  the  dollar. 

I  drew  up  the  plan  in  detail  and  submitted  it  to  the  Assistant  Attor- 
ney-General for  the  Postoffice,  General  Tyner.  I  had  never  seen  him.  I 
did  not  even  know  who  he  was.  I  simply  inquired  if  the  plan  was  legiti- 
mate, and  whether  it  conflicted  with  any  rules  and  regulations.  I  received 
a  reply  from  his  assistant,  Harrison  J.  Barrett,  saying  that  it  was  en- 
tirely proper,  and  authorizing  its  use.  I  then  started  the  plan,  which 
proved  extremely  successful.  It  brought  us  an  enormous  subscription  list 
in  advance  of  publication.  Then  I  received  a  letter  from  the  assistant  at- 
torney-general's oiBce  stating  they  had  decided  that  the  compound  system 
of  the  endless  chain  was  a  lottery,  but  that  the  single  series  was  not.  The 
sending  out  of  cards  which  were  to  be  themselves  returned  was  held  to  be 
allowable  because  the  sender  would  know  to  whom  they  had  been  mailed. 
He  would  thus  have  them  in  his  control.  But  the  compounding  of  that 
series  by  cards  sent  out  by  subscribers  to  their  friends  was  held  to  be  a 
lottery,  because  it  would  be  beyond  the  control  of  the  originator  of  the 
chain.  The  assistant  attorney-general,  however,  in  view  of  the  fact  that  he 
had  previously  authorized  us  to  use  the  plan,  and  had  then  ruled  on  it  as 
legitimate,  agreed  to  give  us  a  reasonable  time  to  wind  the  business  up. 
I  immediately  notified  him  that  we  would  do  so,  and  thanked  him  for  the 
courtesy. 

When  the  Progressive  Watch  Company  was  wound  up  there  was  left 
over  one  of  the  premium  watches  that  cost  about  twelve  dollars.  I  did  it 
up  in  a  package  and  sent  it  to  Mr.  Barrett,  with  whom  I  was  not  ac- 
quainted at  the  time.  I  asked  him  to  accept  the  last  watch  of  the  series. 
I  thought  he  was  entitled  to  it  for  his  courtesy.  I  told  him  that  if  he  would 
examine  it  he  would  see  that  it  was  only  a  twelve  dollar  watch,  whole- 
sale. He  refused  the  watch.  I  then  wrote  him  again  saying  that  I  had 
caused  his  initials  to  be  engraved  on  it,  and  that  I  did  not  offer  it  for  its 
monetary  value.  If  he  was  satisfied  of  that  by  examining  it,  I  said  I 
would  be  very  glad  to  have  him  keep  it,  or  if  not,  then  he  could  send  it 
back.  Some  months  later,  when  I  was  in  Washington,  I  called  at  his  office. 
He  laughingly  pointed  out  the  watch  to  me  on  the  mantelpiece  still  in 
the  original  mailing  box  as  I  had  sent  it.    He  considered  it  as  quite  a  joke. 

I  had  also  regarded  it  as  a  joke,  until  some  time  later  Fourth  Assistant 
Postmaster-General  now  Senator  Bristow  made  an  investigation  of  the 
Postoffice  Department.  Mr.  Barrett,  and  Judge  Tyner,  I  believe,  were 
brought  into  the  controversy.  Mr.  Bristow  in  his  report  called  attention  to 
the  receipt  by  Mr.  Barrett  of  this  watch  from  me.  Later,  this  extract 
from  Mr.  Bristow's  report  was  printed  in  a  separate  leaflet  by  the  Post- 
office  Department,  and  widely  circulated  throughout  the  United  States.  It 
was  cited,  I  suppose,  as  an  attempted  bribery  upon  my  part,  but  I  in- 
tended this  watch  just  as  a  souvenir.  Here  was  a  high  official  of  a  great 
Government.  The  presentation  to  him  of  a  watch  costing  twelve  dollars  as 
a  consideration  of  value  would  be  to  my  mind  a  ridiculous  proposition.  But 
1  was  yoimg  and  green,  then.  I  did  not  know  that  such  things  would  be 
twisted,  misconstrued,  and  misrepresented  as  they  often  are. 

Afterwards  Mr.  Barrett  went  into  a  law  office  in  Baltimore.  He  be- 
came a  member  of  a  law  firm  there.  I  engaged  his  firm  as  counsel  for  the 
Coin  Controller  Company  of  America.  I  had  a  contract  with  the  Maryland 
Telephone  Company,  and  employed  Barrett  to  handle  the  local  details.  I 
felt  that  perhaps  the  twelve  dollar  watch  I  sent  him  might  have  had  some- 
thing to  do  with  the  loss  of  his  position.  I  had  some  compunction  about 
that.  But,  Mr.  Barrett  to-day.  so  far  as  my  knowledge  is  concerned,  is  an 
lionorable,  upright  man.  He  has  certainly  been  so  in  all  of  his  relations 
with  me. 

Nichols  has  attempted  in  the  following  testimony  to  place  another 
light  upon  this  incident: 


120  THE  SIEGE  OF  UNIVERSITY  CITY 

I  know  about  the  gift  of  a  gold  watch  to  Mr.  Barrett,  as  Mr.  Lewis 
and  I  were  partners  at  the  time.  The  watcii  was  purchased  personally  by 
Mr.  Lewis  from  the  L.  Bauman  Jewelry  Company.  It  was  worth  more 
than  twelve  dollars.  The  watches  we  sent  to  the  mail  order  subscribers 
cost  anywhere  from  ten  to  fifteen  dollars.  They  were  not  so  good  as  that 
we  sent  to  Mr.  Barrett.  I  remember  this  Ijccause  the  clerk  who  waited 
on  Jlr.  Lewis  telephoned  me  tliat  he  was  buying  a  nice  watch,  and  wanted 
me  to  come  down.  I  said  I  was  too  busy.  I  imagine  that  Lewis  paid 
about  thirty-five  dollars,  wholesale.  The  watch  was  given  to  Barrett  with 
the  opinion  of  botii  myself  and  Lewis  that  we  wanted  him  to  feel  under 
some  sn)all  obligation.  I  know  that  was  so,  as  far  as  Lewis  is  concerned, 
because  he  so  stated  to  me.  In  talking  the  matter  over  he  said:  "If  we 
can  make  him  feel  all  right,  Nick,  we  can  get  closer  to  him." 

The  reader  tluis  has  before  him  both  versions  of  this  incident. 
The  motives  of  Nichols  having  been  indicated,  he  must  draw  his 
own  conclusions. 

The  following  is  an  additional  statement  made  by  Nichols  in  this 
connection : 

There  was  nothing  really  illegitimate  about  the  Progressive  Watch  Com- 
pany. When  we  started,  we  submitted  the  question  to  Judge  Tyner,  and 
he  wrote  a  letter  back,  which  letter  I  have  and  can  show.  It  may  do  Lewis 
some  good.  Afterwards,  the  postoffice  authorities  objected  to  the  system, 
and  I  was  in  continuous  fear  of  the  inspectors.  I  remember  that  the  post- 
office  people  once  sent  us  a  notice  of  the  new  rulings.  I  went  over  person- 
ally and  asked  them  what  it  meant.  They  said  they  could  not  tell  me  more 
than  was  contained  in  the  notification,  but  the  officer  in  the  postoffice  bu- 
reau said:  "If  you  have  any  doubts  about  it,  just  let  the  thing  alone."  I  re- 
plied that  we  had  inquired,  and  that  we  had  been  told  it  was  all  right.  We 
decided  to  go  ahead.  There  was  nothing  illegitimate  in  the  plan,  except 
that  probably  the  method  of  selling  might  be  objectionable  to  the  De- 
partment. It  was  just  like  forming  an  insurance  com])any.  We  depended 
upon  the  lapses  for  what  we  made.  But  I  do  not  think  anybody,  even  I, 
ever  accused  Mr.  Lewis  of  using  it  as  a  scheme  to  defraud.  AVe  conducted 
the  business  so  as  to  strictly  comply  with  the  postal  regulations.  But  we 
were  inspected  three  or  four  times  and  that  made  me  think  we  might  get 
into  trouble.  It  was  as  if  a  man  has  been  stoj^ped  three  or  four  times  on 
a  street  corner  by  a  policeman  and  told  tiiat  he  looked  suspicious.  That 
is  why  I  thought  we  might  have  trouble,  not  because  we  were  conscious  of 
any  fraud. 

Hindsight  is  better  than  foresight.  Had  Lewis  been  able  to  read 
the  future  he  would  doubtless  have  refrained  from  presenting  a 
gold  watch  to  Harrison  J.  Barrett.  Nor  would  he  have  taken  ad- 
vantage of  the  courtesy  of  that  official  to  continue  to  obtain  sub- 
scribers by  the  endless  chain.  But  Lewis  was  engrossed  from  Octo- 
ber, 1898,  to  April,  1899,  in  the  task  of  building  up  the  circulation 
of  the  publication  he  proposed  to  launch,  and  in  other  preparations* 
He  gave  little  or  no  heed  to  personages  and  events  which  after- 
wards conspired  to  seize  him  with  a  viselike  grip  and  fasten  him 
upon  the  public  pillory. 

It  may  be  doubted  whether  Lewis  even  knew  until  long  after- 
ward tliat  Josepli  L.  Bristow  of  Kansas  had  been  appointed  by 
President  McKinley,  on  April  1,  1897,  as  Fourth  Assistant  Post- 
master-General of  the  United  States,  in  charge  of  postoffice  in- 
spectors' service;    nor  that  Bristow  proceeded  to  manipulate  that 


THE  DREYFUS  CASE  OF  AMERICA  121 

service  with  a  view  to  building  up  for  himself  in  Kansas  a  political 
machine.  The  fact  that  Bristow  procured  the  appointment  of  Rob- 
ert M.  Fulton  in  June,  1897,  as  clerk  in  the  postoffice  at  Cripple 
Creek,  Colo.,  with  a  view  to  the  evasion  of  the  civil  service  resjula- 
tions  and  to  his  subsequent  appointment  as  a  postoffice  inspector, 
was,  of  course,  totally  unknown  to  Lewis.  Nor  did  he  have  any 
means  of  suspecting  the  consequences  which  that  appointment  would 
entail.  Even  the  appointment  of  Edwin  C.  Madden,  as  Third 
Assistant  Postmaster-General,  in  July,  1899,  three  months  after 
the  birth  of  the  Winner,  was  a  circumstance  to  which  Lewis  probably 
gave  no  heed.  Assistant  Attorney  Tyner  and  his  assistant,  Barrett, 
entered  into  his  thoughts  only  in  so  far  as  their  official  rulings 
affected  the  conduct  of  his  affairs.  These  men  entered  and  assumed 
their  places  upon  the  stage  of  national  affairs  at  a  time  when  Lewis 
little  dreamed  that  he  Avould  ever  touch  their  lives  or  occupy,  by 
any  chance,  the  centre  of  the  stage  of  public  interest.  Before  we 
take  up,  therefore,  the  report  of  Bristow,  or  the  story  of  his  polit- 
ical manoeuvres  and  aspirations,  or  attempt  to  discuss  the  reforms 
of  General  Madden,  we  must  place  ourselves  in  Lewis'  position,  and 
view  with  his  own  eyes,  as  nearly  as  we  can,  the  origin  and  develop- 
ment of  the  Winner,  the  magazine  that  he  eventually  founded. 

EARLY  ADVERTISING   POLICIES. 

Lewis  still  preserves  a  handsomely  bound  morocco  volume,  em- 
bossed in  gold,  "The  Winner,  E.  G.  Lewis,  Editor,  Volume  I,  1899." 
His  pride  in  the  first  output  of  his  editorial  skill  is  perhaps  par- 
donable. But,  certainly,  it  is  a  far  cry  from  the  first  issues  of  the 
Winner  of  1899  to  the  Woman's  Magazine  of  six  yenrs  later,  not 
to  mention  the  gap  which  separates  it  from  great  monthly  maga- 
zines for  women  at  the  present  day. 

The  Winner  is  a  typical  mail  order  journal  of  the  old  school,  now 
happily  extinct  forever.  Lewis,  being  without  capital  or  previous 
experience,  naturally  and  necessarily  fashioned  it  largely  after  the 
existing  models.  The  editorial  contents  consist  chiefly  of  fiction 
and  miscellany,  bearing  the  evident  earmarks  of  the  traditional 
pastepot  and  shears.  The  selection  of  material  was  not,  however, 
without  traces  of  the  editorial  insight  into  the  tastes  and  interests 
of  a  rural  feminine  constituency,  for  which  Lewis,  as  an  editor, 
has  since  become  so  notably  distinguished.  Mechanically,  the  first 
issues  of  the  Winner  consisted  of  sixteen  pages,  well  printed  upon 
a  superior  quality  of  book  paper,  which  bears  little  evidence  of 
3'ellowing  after  the  lapse  of  thirteen  years.  The  illustrations  on 
the  whole  are  good  and  well  printed.  The  advei'tisements  are  of 
the  usual  mail  order  variety.  But  even  from  the  early  issues  they 
bear  impress  of  the  policy  by  which  the  Winner,  afterwards  the 
Woman's  Magazine,  became,  in  a  few  brief  years,  the  third  largest 
and  most  profitable  advertising  medium  in  America.  The  adver- 
tising of  the  Winner  was  for  the  most  part  clean,  in  sharp  distinc- 
tion to  the  columns  of  its  immediate  competitors.     For  these  were 


122  THE  SIEGE  OF  UNIVERSITY  CITY 

then  and  for  many  years  after  polluted  with  a  class  of  advertise- 
ments such  as  would  not  now  be  tolerated.  Lewis  has  always  prided 
himself  upon  his  advertising  policy.  The  first  issue  of  the  Winner 
contained  this  first  tentative  groping  toward  the  absolute  guarantee 
which  he  was  afterwards  among  the  first  to  publish: 

Our  advertising  columns  will  be  kept  free  from  objectionable  adver- 
tisements. Any  of  our  readers  who  think  they  have  reason  to  complain  of 
their  treatment  from  answering  advertisements  should  communicate  with 
us.  ♦  *  *  *  Our  advertisers,  if  defrauded  by  anyone  answering  their  ad- 
vertisements, will  also  please  communicate  with  the  Winner. 

Lewis  further  explains  his  intentions  as  to  advertising  as  follows, 
in  the  second  issue: 

We  will  not  follow  the  usual  methods,  but  have  plans  of  our  own.  We 
believe  an  advertiser  is  entitled  to  know  just  what  he  buys.  We,  there- 
fore, tell  him  exactly  how  many  papers  we  mail  each  month  to  paid  sub- 
scribers. If  he  wishes,  we  will  send  him  a  postoffice  receipt.  We  have  only 
one  rate,  and  while  it  increases  each  montli  with  the  circulation,  yet  it 
is  a  flat  rate  and  is  the  same  to  all.  We  will  not  vary  from  it,  since  we 
are  independent  of  our  advertising  and  not  dependent  on  it. 

Partly  from  the  policy  thus  announced  at  the  outset^  and  partly, 
no  doubt,  from  Lewis'  wide  personal  acquaintance  and  strong  friend- 
ships with  the  representatives  of  advertising  agencies  and  his  knowl- 
edge and  personal  experience  in  the  mail  order  field,  the  Winner  at 
once  secured  a  liberal  advertising  patronage. 

Not  all  of  the  advertising  carried  in  its  early  issues  would  now 
be  regarded  as  unobjectionable.  But  still  much  of  it  was  of  high 
character.  None  fell  below  a  standard  of  ordinary  decency,  which 
was  rare  among  the  mail  order  periodicals  of  that  day.  The  Win- 
ner, in  brief,  as  to  its  advertising  policy,  like  all  other  publications, 
crept  before  it  could  walk  erect.  Yet,  from  the  beginning,  the 
aspirations  of  the  publisher  were  indicated   clearly. 

THE     MAIL     ORDER     PROTECTIVE     ASSOCIATION. 

The  IVIail  Order  Protective  Association,  criticised  by  the  inspec- 
tors, was  a  device  successfully  employed  by  Lewis  to  promote  his 
advertising  patronage.  It  was  explained  as  follows  by  him  at  the 
Ashbrook  Hearings: 

Early  in  the  publication  of  the  Winner  Magazine,  it  contained  a 
great  amount  of  what  was  called  trust  advertising,  because  many  adver- 
tisements were  headed  "Wc  Trust  You."  An  enormous  amount  of  such  ad- 
vertising was  then  published,  saying  that  the  advertiser  would  send  mer- 
chandise on  trust,  depending  upon  the  honesty  of  those  who  ordered  it. 
The  consignee  then  sold  the  merchandise,  remitted  the  money  and  received 
a  premium,  somewhat  as  the  Larkin  Soap  business  is  now  run.  These  con- 
cerns sold  perfumes  and  a  great  variety  of  novelties.  There  soon  grew  up 
throughout  the  country  a  large  body  of  systematic  robbers.  They  would 
answer  every  one  of  these  advertisements  in  all  the  magazines,  and  that 
was  the  last  that  would  be  heard  of  them.  They  simply  kept  the  mer- 
chandise. Some  of  the  advertisers  asked  me  if  I  could  not  devise  a  plan 
for   stopping  them. 

I  devised  this  plan.  I  suggested  that  all  the  mail  order  advertisers  send 
me  the  names  and  addresses  they  had  of  all  the  dead-beats  and  robbers  of 
that  sort.    I  then  made  up  an  alphabetical  list  by  states.    By  that  we  could 


THE  DREYFUS  CASE  OF  AMERICA  123 

see  if  the  same  person  was  doing  business  systematically  with  all  the  dif- 
ferent concerns  that  were  complaining.  We  thought  that  if  we  could  pre- 
sent the  facts  to  the  gentleman,  he  would  probably  desist.  The  advertisers 
sent  me  thousands  of  names.  I  checked  them  up  and  found  that  this  was 
a  systematic  business.  There  were  probably  two  or  three  thousand  men 
and  women  throughout  the  country  engaged  in  it. 

We  called  ourselves  the  Mail  Order  Protective  Association.  The  names 
of  all  the  advertisers  were  printed  plainly  at  the  top  of  the  letterhead.  The 
process  was  this:  When  we  got  the  analysis  of  a  person's  operation,  we 
would  enclose  it  in  a  letter  as  follows:  "We  find  that  on  such  a  date  you 
ordered  goods  from  such  and  such  concerns."  We  then  gave  him  a  list  of 
his  transactions,  with  the  total  amount,  say  sixty  dollars.  As  a  general 
rule  the  sixty  dollars  came  back.  That  was  the  end  of  that  man's  dealings. 
That  broke  it  up. 

This  was  simply  an  adjunct  of  our  advertising  department.  It  was 
not  a  corporation.  No  one  had  stock  in  it,  nor  was  anyone  defrauded.  It 
was  run  on  the  order  of  a  merchants'  credit  system.  We  were  not  doing 
business  for  ourselves,  but  simply  to  protect  our  advertisers.  Our  arrange- 
ment with  the  advertiser  was  that  in  return  for  collecting  these  accounts 
they  would  spend  at  least  one-half  the  money  with  us  in  additional  adver- 
tising.    After  it  had  compassed  its  object  it  was  dropped. 

The  fourth  issue  of  the  Winner,  that  of  September,  1899  (the 
August  number  having  been  omitted  and  the  subscriptions  extended 
in  order  to  advance  the  date  of  mailing),  contains  the  first  appear- 
ance of  the  advertisement  of  the  Swanson  Rheumatic  Cure  Company, 
afterwards  a  steady  patron.  H.  A.  Swanson,  the  proprietor  of 
this  remedy,  will  appear  hereafter  as  a  staunch  supporter  of  Lewis, 
an  investor  in  certain  of  his  enterprises,  and  an  incorporator  of  the 
People's  United  States  Bank.  The  January,  1900,  issue  was  sig- 
nalized by  the  first  of  the  series  of  half  page  advertisements  of 
Cascarets.  These  ran  continuously  thereafter  for  many  months, 
and  contributed  not  a  little  to  its  prosperity.  Kramer,  as  one  of 
the  leading  patrons  of  the  great  advertising  agency  of  Lord  &• 
Thomas  of  Chicago,  was  a  personage  of  no  small  influence  with 
that  concern.  Through  him  Lewis  appears  to  have  formed  the 
personal  friendship  of  A.  L.  Thomas,  the  president  of  that  agency, 
and  of  his  associates.  The  Winner  was  shortly  in  receipt  of  all 
the  advertising  it  could  carry.  Early  in  the  second  year  cf  its 
existence  the  great  mail  order  concern  of  Sears,  Roebuck  &  Company 
tried  out  the  Winner,  with  the  result  that  a  contract  was  closed 
beginning  with  the  September,  1900,  issue,  whereby  they  carried 
for  many  months  the  equivalent  of  full  page  advertisements.  From 
that  time  on  the  commercial  success  of  the  Mail  Order  Publishing 
Company  was  assured. 

These  early  contracts  between  Lewis  and  leading  mail  order  ad- 
vertisers are  of  two-fold  interest.  They  not  only  indicate  the  sources 
of  the  wide  and  intimate  knowledge  of  the  whole  mail  order  field 
which  Lewis  afterwards  displayed.  They  also  introduce  some  of 
the  men  who  became  Lewis'  financial  backers,  and  whose  wealth 
and  influence  assisted  him  in  launching,  one  after  another,  his  ambi- 
tious projects,  and  sustained  them  when  attacked.  Out  of  the 
bizarre  and  dubious  advertising  columns  of  the  early  issues  of  the 


124  THE  SIEGE  OF  UNIVERSITY  CITY 

Winner  thus  shines  clearly,  in  the  light  of  Lewis'  subsequent  achieve- 
ments, the  rare  capacity  of  gripping  strong  men  to  him  in  the  bonds 
of  those  intimate  and  cordial  friendships  which  last  through  life, 
and  sustain  with  fortitude  all  the  sliocks  that  chance  or  fate  can 
bring. 

Kramer  appears  to  have  been  attracted  to  Lewis  by  the  success 
of  his  endless  chain  system,  which  the  latter  generously  placed  at 
his  disposal.  The  immediate  effect  of  this  combination  was  to  bring 
about  the  personal  relation  between  Lewis  and  Kramer,  from  which 
their  strong  and  lasting  friendship  sprang.  A  joint  premium 
arrangement  was  made.  This  afterwards,  however,  became  the 
occasion  of  perhaps  the  earliest  controversy  between  the  Postoffice 
Department  and  Lewis.  It  was  the  subject  of  an  adverse  ruling, 
and  had  to  be  abandoned. 

The  mail  order  industry  was  then  growing  fast.  Lewis  was  in 
daily  contact  with  its  most  active  spirits.  As  he  developed  under 
this  stimulus  his  ambitions  grew  apace.  The  natural  bent  of  his 
mind  revealed  itself  in  the  constant  raising  of  his  business  stand- 
ards. His  new-found  friends  watched  the  rapid  development  of 
the  Winner  with  keen  and  sympathetic  interest.  The  following  is 
Lewis'  statement  to  the  Congressional  Committee  In  this  regard: 

Many  of  the  best  business  men  became  intensely  interested  in  the  Win- 
ner. This  was  particularly  the  case  with  Major  Kramer,  who  figures  large- 
ly in  the  later  enterprises.  He  lives  at  Kramer,  Indiana.  He  built  the 
town  of  Mudlavia,  where  you  take  mud  baths  at  the  Indiana  mineral  springs. 

T  am  now  speaking  of  the  year  1902  and  forward  into  1903  and  1904. 
Major  Kramer  was  the  owner  of  the  Sterling  Remedy  Company,  pro- 
prietors of  Cascarcts,  a  wealthy  man.  His  company  was  running  some  of 
the  most  abominable  advertising  that  had  appeared  at  that  time  in  the 
press.  At  least,  the  illustrations  were,  from  my  point  of  view,  of  that 
character.  During  1902,  he  came  to  St.  Louis.  Although  I  had  carried  his 
advertising  since  1900,  I  had  only  seen  him  once  before.  I  was  hard  pressed 
at  that  time  on  the  magazine.  I  was  having  difficulty  in  getting  the  neces- 
sary funds  to  meet  its  enormous  growth.  I  could  not  put  up  the  adver- 
tising rate  fast  enough  to  keep  pace  with  the  circulation.  Some  months 
would  intervene  before  I  could  get  the  benefit  of  the  higher  rate.  Major 
Kramer,  at  that  time,  threw  down  on  my  table  about  a  dozen  large  quarter- 
]>age  advertisements  of  the  kind  he  was  then  running  in  the  newspapers. 
They  contained  illustrations  of  a  recumbent  female  figure  in  light  attire. 
Kramer  asked  me  what  they  would  cost  in  the  Woman's  Magazine  at  the 
current  rate,  which  was  then  four  dollars  a  line.  I  figured  up  that  they 
would  amount  to  several  thousand  dollars.  He  wrote  out  his  check  for  the 
proper  sum,  and  handed  it  to  me.  I  gave  it  back.  I  told  him  that  1  could 
not  insert  that  advertising  in  the  magazine  at  any  price. 

That  v.'as  something  new  for  Major  Kramer.  I  do  not  sup]iose  any 
other  publication  in  the  country  had  refused  his  advertising,  unless,  per- 
haps, the  Ladies'  Home  Journal.  He  then  became  very  much  interested 
in  what  I  was  doing,  and  oftcrcd  to  pay  all  my  bills  of  every  sort,  give 
me  the  assets  and  accoimts  receivable,  and  pay  me  twenty-five  thousand 
dollars  a  year  if  I  would  leave  St.  Louis,  and  run  his  Cascarets  business. 
I  told  him  no.    I  had  decided  to  be  a  publisher,  and  was  going  to  stay. 

It  was  a  little  time  after  tliat  meeting  with  Major  Kramer  that  I 
found  my  banking  credit  at  the  National  Bank  of  Commerce  seemed  to  be 
almost  unlimited.     When  I  went  down  to  renew  my  paper  and  ask  for  an 


THE  DREYFUS  CASE  OF  AMERICA  125 

increase,  it  was  given  so  quickly  that  I  could  not  quite  place  the  reason. 
I  did  not  find  out  the  reason  until  some  years  afterwards,  that  Major 
Kramer  had  gone  to  that  bank  and  guaranteed  my  line  of  discount.  The 
effect  had  been  to  increase  it  to  a  very  high  amount.  Several  other  men 
of  means  in  the  city  and  elsewhere  also  gave  me  a  helping  hand  as  I  went 
along. 

After  that.  Major  Kramer  used  to  endorse  my  paper  in  blank.  I  would 
send  him  up  ten,  twenty,  or  thirty  blank  notes,  and  he  would  endorse  them 
in  blank.  He  never  had  one  of  them  come  back  to  him.  I  do  not  recall 
that  he  ever  received  even  one  dollar's  profit  in  money  from  my  enterprises. 
He  has  fought  this  figlit  all  through  with  me.  I  think  he  has  spent  without 
exaggeration,  at  least  one  hundred  and  fifty  thousand  dollars  of  his  own 
money  in  these  battles  without  taking  any  obligation  from  me  of  any  sort. 
I  will  say  that  the  friendship  between  us  has  become  one  of  the  fine  things 
of  life.  He  is  perhaps  the  dearest  friend  I  have.  There  never  has  been 
any  money  consideration  between  him  and  myself.  If  I  were  to  telegraph 
him  today,  I  believe  he  would  go  down  and  pawn  his  watch,  if  he  had  noth- 
ing else,  and  send  me  the  money.  He  would  send  it  first,  and  then  per- 
haps would  come  down  and  see  what  I  was  doing  with  it. 

Shortly  after  the  incident  of  the  refusal  of  Kramer's  advertise- 
ments, above  narrated,  Lewis  adopted  the  policy,  in  which  he  was 
the  pioneer  among  mail  order  journals,  of  publishing  an  absolute 
guarantee  of  the  patrons  of  his  advertisers  against  loss.  To  main- 
tain this  standard,  lie  was  compelled  to  exclude  a  large  amount  of 
proffered  advertising  from  his  columns.  He  therefore  published 
a  circular,  which  is  among  the  landmarks  of  his  career,  defining  the 
various  classes  of  objectionable  advertisements  which  he  refused 
to  publish.  The  courageous  attitude  thus  taken  went  far  to  account 
for  the  prosperity  of  the  Winner,  and  laid  the  basis  for  the  supre- 
macy of  the  Woman's  Magazine. 

THE    ENDLESS    CHAIN. 

The  characteristic  impress  of  Eewis'  personality  during  this  period 
is,  however,  marked  chiefly  upon  his  circulation  efforts.  The  sec- 
ond issue  of  the  Winner,  June,  1899,  contained  a  three-page  illus- 
trated write-up,  entitled,  "The  Great  Subscription  Card  System  of 
the  Winner.'"  This  feature  not  only  contains  the  complete  descrip- 
tion of  the  endless  chain.  It  rings  throughout  with  the  true  note 
of  mutual  confidence  between  publisher  and  reader,  which  can  be 
sounded  successfully  only  by  one  who  has  the  instincts  and  aptitude 
of  a  great  publisher.  This  friendly  attitude  became  in  after  years 
the  dominant  note  of  Lewis'  editorial  columns. 

Let  us  see  what  the  endless  chain  system,  as  practiced  by  Lewis 
in  building  up  the  circulation  of  the  Winner,  really  was=  The  fol- 
lowing explanation,  quoted  from  the  second  issue  of  the  Winner,  is 
placed  in  the  mouth  of  Secretary  Nichols,  but  the  article  bears 
internal  evidence  of  having  flowed  from  Lewis'  facile  pen.  This  is 
taken  from  a  supposed  interview  with  a  visiting  subscriber: 

Our  plan  is  this:  You  had  a  card  given  to  you  by  a  friend.  You  sent 
that  card  to  us  with  ten  cents  for  three  months'  subscription  to  the  Win- 
ner and  received  ten  cards  like  the  one  you  sent.  These  ten  cards  you  gave 
to  ten  friends.  They  in  their  turn  sent  them  to  us  with  ten  cents  each,  and 
received  ten  more  cards  themselves.     When  your  cards  have  all  reached 


126  THE  SIEGE  OF  UN'IVERSITY  CITY 

this  office,  with  ten  cents  each  for  three  months'  subscription  to  the  Win- 
ner, you  may  have  as  your  reward  your  clioice  of  the  premiums  in  our 
catalogue,  given  for  the  return  of  ten  subscription  cards. 

But,  sir,  suppose  that  I  cannot  get  all  of  my  friends  to  get  their  cards 
out.    Do  I  lose  all  I  have  done? 

No,  indeed.  You  may  have  duplicate  cards  to  give  to  others  who  will 
send  them  out;  or,  if  you  become  dissatisfied  at  any  time  while  you  have 
3"our  cards,  you  can  get  back  the  ten  cents  which  you  sent  to  us.  You 
need  only  drop  us  a  postal  giving  us  your  series  card  number,  and  tell  us 
that  you  wish  your  money  back.  Besides  this,  you  will  remember  that  your 
ten  friends  each  get  three  months'  subscriptions  to  one  of  the  most  inter- 
esting magazines  ever  published. 

Few  would  suspect  offhand  that  am'  intent  to  defraud  lay  at  the 
root  of  this  fair-seeming  proposition.  One  invested  a  dime.  For 
this  he  received  a  three  months'  trial  subscription  to  a  monthly 
magazine.  Had  the  transaction  closed  with  that,  no  question  could 
have  arisen.  But  one  also  invited  ten  friends  to  do  the  like,  upon 
the  expectation  that  for  this  slight  service  he  might  be  rewarded, 
eventual!}",  with  a  cash  bonus  of  eight  dollars,  or  choice  of  certain 
premiums  of  equal  value,  wholesale.  Obviously,  if  every  originator 
of  an  endless  chain  received  a  premium,  the  time  must  come  when 
the  publisher  would  be  unable  to  cash  up.  No  publisher  could 
afford  to  pay,  for  every  subscription,  a  cash  bonus  of  eight  dollars; 
or  to  purchase  premiums  of  the  average  value  of  that  sum.  The 
possibility  of  the  endless  chain  as  a  commercial  venture  lays  in  the 
element  of  lapses  which  is  implied.  Not  only  must  the  originator 
of  the  chain  deliver  ten  subscription  cards  to  as  many  other  persons, 
but  eacJi  of  the  ten  must  in  turn  deliver  to  others  an  equal  number. 
Thus  a  total  of  one  hundred  and  ten  cards  must  be  put  in  circula- 
tion. All  of  these  must  be  returned  before  the  originator  of  the 
chain  can,  upon  the  strict  terms  of  such  an  offer,  be  rcAvarded.  The 
same  principle,  in  effect,  lies  at  the  root  of  many  enterprises.  Upon 
this  principle  Henry  Bowman  gave  the  life  insurance  business  in 
America  its  first  great  impetus,  and  reared  the  gigantic  structure 
of  the  New  York  Life  Insurance  Company.  The  same  principle 
obtains  in  various  forms  of  fraternal  insurance  and  benefit  asso- 
ciations. The  same  principle  lay  at  the  root  of  the  numerous  bond 
investment  companies  that  flourished  contemporaneously  with  the 
Winner  Magazine.  The  same  principle  has  built  up  tl)e  Interna- 
tional Correspondence  School  of  Scranton,  Pa.,  and  other  great 
modern  educational  institutions  of  like  character. 

All  these  enterprises  have  the  following  features  in  common:  A 
proposition  is  made,  which,  upon  its  face,  is  obviously  "too  good 
to  be  true."  The  slightest  reflection  will,  and  does,  show  everyone 
that  if  the  conditions  sliould  be  complied  with  by  every  participant 
the  funds  must  be  speedily  exhausted,  and  disapointment  must  ensue. 
The  conditions,  therefore,  are  manifestly  such  tliat  everyone  cannot, 
and  will  not,  comj)ly.  Each  person  who  attempts  to  do  so  expects 
to  be  the  fortunate  participant;  and  here,  as  elsewhere,  the  few 
succeed,  the  many  fail. 


The  founder  of  the  ll'oman's  Magacine,  of  the  Peoples'  United  States  Bank,  of  the 
American  Woman's  League  and  the  promoter  of  many  corporations,  at  the  age  of  two 
years.     The  source  of  alt  the  manifold  activities  herein  set  forth 


Edwara  Gardner  Lewis  (shown  below  at  the  right),  his  brothers  John  (by  his  side) 
and  Robert  (m  the  rear).  The  Lewis  family  at  this  time.  1883,  were  residing  on 
Diamond  Square  at  Meadville,  Penns\lrania,  where  Lewis,  at  the  age  of  twelve,  pub- 
lished the  two    first   (and  last)  issues  of  his  first  periodical,   the     Diamond  .\  cws 


THE  DREYFUS  CASE  OF  AMERICA  129 

There  has  been  a  remarkable  quickening  of  the  public  conscience 
as  to  all  enterprises  involving  these  common  features,  and  depend- 
ing for  their  prosperity  upon  this  principle  of  lapses.  Looking 
back,  after  the  close  analysis  to  which  these  projects  have  been  sub- 
jected in  recent  years,  the  elements  of  chance,  which,  in  the  opinion 
of  the  legal  authorities  of  the  Postal  Department,  brought  the  end- 
less chain  within  the  limits  of  the  national  lottery  law,  are  clear 
enough.  But  fairness  demands  that  we  should  not  make  our  judg- 
ment retroactive.  Experience  in  the  actual  operation  of  all  these 
different  schemes  has  been  required  to  show  precisely  where  to  draw 
the  line  between  the  elements  of  chance  and  those  of  lawful  enter- 
prise. 

When  Lewis  first  adopted  the  endless  chain  as  a  circulation 
method  in  1899,  neither  he,  nor,  be  it  particularly  noticed,  any  one 
else,  had  sufficient  experience  with  its  actual  conduct  to  know  just 
how  it  would  work  out.  There  was  then  no  basis  for  the  conclusion 
that  it  would  be  harmful  to  the  participants;  or  wrongful  upon 
either  moral  or  legal  grounds.  The  whole  plan  was  submitted 
frankly  in  advance  to  the  postal  authorities,  and  was  approved  by 
them.  These  facts  exonerate  Lewis  from  the  slightest  conscious- 
ness of  doing  wrong. 

The  actual  conduct  of  the  endless  chain  by  the  Mail  Order  Pub- 
lishing Company  was  liberal.  The  originator  of  an  unsuccessful 
chain  had  the  privilege,  as  we  have  seen,  of  sending  out  additional 
cards  under  the  same  serial  number,  to  any  amount  that  he  or  she 
might  wish.  The  effect  of  persistence  in  distributing  additional 
cards  would  be  in  time  to  overcome  the  presumption  of  chance. 
So  that,  by  industry,  a  subscriber  could  free  the  scheme  wholly 
from  the  taint  of  lottery.  Lewis  found  by  actual  experience  that 
the  chances  upon  the  compound  series  amounted  to  a  practical  cer- 
tainty that  the  full  one  hundred  per  cent  of  cards  in  circulation  on 
any  given  chain  would  never  come  to  hand.  He  then  adopted,  in 
practice,  the  policy  of  awarding  premiums  upon  the  receipt  of  ap- 
proximately sixty  per  cent  of  any  compound  series.  By  this  wise 
liberality  he  distributed  large  numbers  of  watches,  bicycles  and  other 
premiums  to  the  originators  of  the  various  chains.  The  effect  was 
the  redoubling  of  their  energies  in  his  behalf.  The  actual  receipt 
of  these  premiums  in  various  communities  stimulated  new  subscrip- 
tions, and  the  inception  of  new  chains.  The  whole  network  col- 
lectively produced  for  the  Winner  an  enormous  circulation,  and, 
moreover,  a  class  of  subscribers  which  watched  for  the  monthly 
issues,  and  scanned  their  columns  with  a  degree  of  intimate  inter- 
est altogether  exceptional. 

THE  MASTHEAD  OF  THE   WINNER. 

The  publishers'  announcements  to  the  public,  printed  in  the 
column  under  the  masthead  of  a  publication,  afford  to  persons  famil- 
iar with  the  publishing  business  an  almost  infallible  index  to  its 
business  status  and  its  general  course  of  development.    This  column 


130  THE  SIEGE  OF  UNIVERSITY  CITY 

tells  to  those  who  by  experience  are  able  to  interpret  it  much  the 
same  story  that  a  fever  chart  tells  to  a  physician.  Every  paragraph 
is  symptomatic  of  some  condition  of  vital  imjDort  to  the  business 
health  of  the  publication  as  a  piece  of  propci'ty.  Every  change 
indicates  clearly  a  shift  of  policy  for  which  there  is  an  underlying 
business  need. 

Lewis'  first  announcement  in  his  second  issue  describes  the  Win- 
ner as  a  monthly  magazine,  published  by  the  Mail  Order  Publishing 
Company  at  the  Ozark  Building,  Tenth  and  Pine  streets,  St.  Louis, 
Mo.  The  terms  are  announced  as  fifty  cents  per  year  in  advance, 
single  copies  five  cents.  E.  G.  Lewis  is  editor  and  business  manager, 
H.  E.  Nichols  secretary  and  treasurer,  Mabel  G.  Lewis  vice-presi- 
dent and  associate  editor. 

The  problem  of  small  remittances,  which  afterwards  in  large  part 
gave  rise  in  Lewis'  mind  to  the  conception  of  a  postal  bank,  was 
evidently  forced  on  his  attention  at  the  very  outset  of  his  publish- 
ing experience.  Under  the  caption,  "General  Instruction,"  readers 
are  told  that  remittances  maj'^  be  made  by  express  money  order, 
postoffice  order,  or  draft  on  New  York,  payable  to  the  order  of  the 
Mail  Order  Publishing  Company,  or  by  registered  letter.  Either 
of  the  above  forms  are  said  to  insure  absolute  safety  from  loss  by 
mail.  But  since  all  these  forms  involved  an  expense  to  the  remitter 
in  the  form  of  fees,  the  publishers  agree  to  accept  postage  stamps, 
preferably  of  one  or  two  cent  denominations,  for  the  fractional 
portions  of  a  dollar. 

No  further  change  occurred  until  the  December  issue  of  1899. 
This  beavs,  for  the  first  time,  the  legend,  "Entered  at  the  Postoffice 
at  St.  Louis  as  Second  Class  Matter,  October,  1899."  The  signifi- 
cance of  this  will  appear  in  full  hereafter.  The  reader  need  only 
bear  in  mind  that  the  Winner  was  properly  entered.  The  publish- 
ers' column  of  this  issue  says: 

The  growth  of  the  Winner  has  been  so  rapid  that  it  is  now  one  of  the 
largest  magazines  in  the  world.  This  issue  goes  into  the  homes  of  nearly 
a  half  million  paid  subscribers.  It  uses  two  carloads  of  fine  book  paper. 
It  takes  thirty-two  clerks  five  weeks  simply  to  write  the  names  and  ad- 
dresses on  the  wrappers.  Three  of  the  largest  presses  run  fifteen  days  and 
nights  to  print  it.     New  presses  are  now  in  process  of  erection. 

The  publishers'  announcements  under  the  masthead  of  the  July, 
1900,  issue  contain  a  number  of  additional  paragraphs,  indicating 
clearly  that  the  necessity  of  securing  the  renewals  of  the  subscribers 
first  obtained  by  means  of  the  endless  chain  was  pressing.  The 
following  paragraplis  arc  significant: 

THE  GREY  WRAPPER:  If  your  Winner  comes  to  you  in  a  grey 
wrapper,  you  will  know  that  it  is  a  notification  to  you  that  the  time  for 
whicli  your  paper  has  been  paid  has  expired.  We  ask  that  you  remit  at 
earliest  convenience  for  the  coming  year,  if  you  desire  to  obtain  the  cash 
in  advance  rate  of  fifty  cents. 

DISCONTINUANCES:  Subscribers  wishing  the  Winner  stopped  at 
the  expiration  of  their  subscription  must  notify  us  to  that  eflFcct.  Other- 
wise, we  shall  consider  it  their  wish  to  have  it  continued.    All  arrears  must 


THE  DREYFUS  CASE  OF  AMERICA  131 

be  paid.  Sending  paper  back,  notifying  postmaster,  or  club  agent,  is  not 
notice  to  us.  We  make  this  very  plain,  so  as  to  have  no  misunderstandings. 
The  subscription  price  of  the  Winner  is  payable  in  advance;  this  is  never 
pressed,  however,  with  our  preferred  list  of  true  and  honorable  old  sub- 
scribers. Responsible  subscribers  will  continue  to  receive  this  journal  until 
the  publishers  are  notified  by  letter  to  discontinue,  when  all  arrears  must 
be  paid.     We  like  to  regard  all  old  subscribers  as  friends,  and  we  do. 

Obviously,  subscribers  secured  upon  the  endless  chain  plan  are 
now  being  carried  beyond  the  paid-in-advance  subscription  period, 
in  expectation  of  renewal.  This  is  a  fact  the  interest  of  which  will 
appear  in  full  hereafter,  in  reference  to  postoffice  investigations. 
It  is  well  to  bear  it  in  mind  from  this  point  on. 

THE    TEN-CENT-A-YEAR   IDEA. 

The  second  anniversary  of  the  founding  of  the  Winner  is  sig- 
nalized as  the  pivotal  issue  as  to  its  circulation  policy.  Upon  this 
the  door  turned  which  opened  the  way  to  a  new  era  of  prosperity. 
Across  the  top  of  the  cover  page  of  the  issue  of  May,  1901,  occurs 
for  the  first  time  this  sentence:  "We  will  send  the  Winner  to  any 
address  for  one  year  for  ten  cents." 

The  policy  of  keeping  up  the  original  subscription  rate  of  fifty 
cents  a  year  had  been  maintained  only  at  the  cost  of  an  enormous 
drain  upon  Lewis'  personal  energies,  as  well  as  upon  the  earnings 
of  the  publication.  Practically  the  entire  subscription  revenue  had 
been  consumed  in  the  cost  of  premiums,  contests  and  various  circu- 
lation efforts.  The  publishers  had  been,  in  eff'ect,  obliged  to  carry 
on  a  merchandise  business  in  premiums,  in  addition  to  their  legiti- 
mate work  of  publication.  Their  columns  had  been  necessarily 
taken  up  by  their  own  subscription  efforts,  to  the  exclusion  of  edi- 
torial articles  and  profitable  advertisements.  Lewis'  ingenuity  had 
exhausted  itself.  Yet  the  million  circulation  for  which  he  aspired 
still  seemed  utterly  beyond  his  reach. 

His  mind  in  brooding  over  this  problem  naturally  harked  back 
to  the  days  of  the  endless  chain,  now  forbidden  by  postal  regula- 
tion. The  enormous  quantity  of  dimes  received  on  that  plan  for 
three  months'  subscriptions  to  the  Winner,  and  the  ease  with  which 
those  subscription^  were  secured,  came  vividly  back  to  his  recollec- 
tion. The  large  proportion  of  renewals  brought  in  by  a  temporary 
half-price  reduction  tried  out  the  preceding  subscription  season, 
indicated,  to  Lewis'  way  of  thinking,  that  this  had  been  a  move- 
ment in  the  right  direction.  The  advertising  revenue  was  already 
sufficient  to  maintain  the  publication  at  a  profit,  provided  the  cir- 
culation department  could  support  itself.  Lewis  reasoned  that  he 
bad  been  accepting  three  months'  trial  subscriptions  at  ten  cents, 
and  afterwards  carrying  them  for  the  balance  of  the  year.  All  the 
while  he  had  been  making  costly  efforts  to  obtain  renewals  at  fifty 
cents.  It  would  be  far  more  economical  to  accept  ten  cents,  he  con- 
cluded, outright  for  a  full  year,  and  depend  for  renewals  upon  the 
pulling  power  of  this  bargain  in  editorial  values.     After  consider- 


132  THE  SIEGE  OF  UNIVERSITY  CITY 

ing  the  matter  from  every  angle,  he  at  last  summoned  the  courage 
of  his  convictions,  and  cut  the  Gordian  knot. 

The  following  is  the  first  announcement  of  the  policy  which  made 
the  Woman's  Magazine  rich  and  famous  and  was  followed  by  a  gen- 
eral price  reduction  throughout  the  whole  field  of  periodical  pub- 
lications in  America: 

Beginning  with  this  number,  the  subscription  price  of  the  Winner  has 
been  reduced  from  fifty  cents  to  ten  cents  a  year.  We  believe  that  no  such 
paper  has  ever  before  been  published  at  this  price.  Nor  is  this  all.  We 
shall  greatly  enlarge  and  improve  the  Winner  until  it  becomes  the  best 
monthly  magazine  in  America.  The  subscriptions  of  all  our  readers  who 
are  paid-up  in  advance,  will  be  extended.  Thus,  if  you  have  paid  fifty 
cents  for  a  year's  subscription,  your  paid  subscription  will  be  extended 
four  more  years. 

Instead  of  giving  premiums,  which  are  generally  unsatisfactory  both  to 
the  reader  and  publisher,  we  have  put  the  subscription  price  of  the  Winner 
down  to  the  lowest  price  at  which  we  can  publish  it.  We  shall  depend  on 
the  merits  of  the  paper  itself  to  hold  subscribers. 

MILESTONES    OF    PROGRESS. 

Lewis*  files  of  the  Winner  and  the  Woman's  Magazine  are  broken 
by  the  absence  of  the  remaining  issues  of  1901  and  the  entire  year 
of  1902,  during  which  the  name  of  the  Winner  was  changed  to  the 
Woman's  Magazine.  A  single  copy  of  the  January,  1902,  issue  has 
been  preserved.  This  shows  an  increase  of  size  of  the  Winner 
to  twenty-four  pages,  and  much  improvement  in  editorial  contents 
and  mechanical  appearance.  It  contains  a  feature  article  on  the 
rural  free  deliver}^,  with  illustrations  supplied  by  the  superintendent 
of  that  service.  The  clearing  of  Forest  Park  to  provide  a  site  for 
the  World's  Fair  grounds  is  described  and  fully  illustrated.  The 
magazine  also  contains  an  illustrated  "double  spread,"  showing  an 
attractive  artist's  sketch  of  the  proposed  entrance  to  the  Exposition. 
The  Winner,  in  short,  takes  on  the  general  characteristics  in  great 
part  afterwards  familiar  to  readers  of  the  Woman's  Magazine. 

The  editorial  policy  for  the  year  1902  is  announced  as  follows: 

The  Winner  Magazine,  the  first  magazine  to  be  sold  for  one  cent  per 
copy,  has  met  such  wonderful  response  from  the  public,  that  we  have  set 
about  producing  for  the  year  1902  the  best  printed,  best  illustrated,  best 
edited,  and  most  interesting  m.agtizine  that  has  ever  been  sold  for  less  than 
one  dollar  per  j'ear.  Eight  more  pages  will  be  added.  Beginning  with  the 
P'ebruary  number,  we  shall  take  our  readers  on  a  TRIP  AROUND  THE 
AVORLD.  A  magnificent  series  of  photographs  and  articles  to  accompany 
them,  have  been  secured  from  famous  travelers. 

A  series  of  magnificent  full  and  double  page  views  of  the  great  World's 
Fair,  St.  Louis,  1903,  illustrating  the  building  of  the  fair  from  start  to 
finish,  will  appear  in  each  issue.  These  will  be  printed  on  finer  and  heavier 
2)aper. 

Many  of  the  foremost  men  in  religion,  politics,  science  and  travel  will 
contribute  to  the  Winner  Magazine.  Early  among  these  will  be  an  article 
written  for  us  by  Rt.  Rev.  Henry  C.  Potter,  D.  D.,  Bishop  of  New  York, 
and  the  foremost  Protestant  Clergj'man  in  America. 

Great  stories  of  adventure,  love,  and  romance  will  appear  each  month. 

Altogether  we  have  set  as  our  mark  the  foremost  home  magazine  in  the 
world.     Today  we  have  in  excess   of  half  a  million  paid-in-advance  sub- 


§  S 


s  s 


THE  DREYFUS  CASE  OF  AMERICA  185 

scribers,  and  the  Winner  Magazine  is  the  only  magazine  in  the  great  Cen- 
tral West.  We  give  no  premiums.  We  send  no  sample  copies,  excepting 
to  club  raisers  and  on  special  request.  Any  person  who  cannot  find  ten 
cents'  worth  in  twelve  issues  of  this  magazine,  would  better  invest  his  dime 
in  Government  bonds,  and  live  on  the  interest.  The  cleanest,  brightest,  best 
printed,  and  most  Interesting  family  magazine  published  is  offered  for  ten 
cents  a  year.  If  you  have  any  friends  who  have  not  already  subscribed, 
you  cannot  do  them,  yourself,  and  us  a  greater  favor  than  by  securing 
their  subscriptions  at  once. 

A  significant  change  in  the  subscription  policy  of  the  Winner 
produced  by  the  change  in  price  is  noted  in  the  paragraph  headed 
"Discontinuances,"  run  under  the  masthead  in  the  publishers'  col- 
umn. 

Subscribers,  wishing  the  Winner  magazine  stopped  at  the  expiration  of 
their  subscription,  need  not  notify  us  to  that  effect.  We  shall  discontinue 
if  they  do  not  renew  promptly  when  notified  that  the  time  paid  for  has 
expired.  No  subscriber  will  receive  the  Winner  Magazine  a  single  issue 
beyond  the  time  paid  for  in  advance.  If  you  want  this  paper  to  continue 
coming  to  you,  renew  promptly  when  the  circled  X  is  stamped  on  the 
wrapper. 

An  important  advance  in  the  standards  of  the  Winner's  advertis- 
ing policy  is  also  indicated  by  the  following  absolute  guarantee: 

ADVERTISEMENTS.— The  publishers  of  the  Winner  Magazine  usp 
every  reasonable  effort  to  see  that  only  the  advertisements  of  reliable 
houses  appear  in  its  columns.  While  we  cannot  undertake  to  adjust  mere 
differences  between  advertisers  and  their  customers,  yet  we  will  make  good 
the  actual  loss  any  subscriber  sustains  from  being  swindled  by  any  adver- 
tiser in  our  columns,  provided  the  complaint  is  made  within  sixty  days  of 
the  date  of  issue  in  which  the  advertisement  appeared. 

Rumors  of  the  proposed  reforms  of  the  Department  had  already 
become  current  among  publishers  in  the  mail  order  field  and  em- 
ployees in  the  postal  service;,  but  Lewis  supposed  that  his  recent 
changes  in  policy  had  improved  the  character  of  the  Winner  to  a 
point  which  would  exempt  him  from  official  interference.  The  re- 
duction in  price  had  excluded  all  premium  and  similar  subscription 
schemes  known  to  be  objectionable  to  the  Department.  The  adver- 
tising guarantee  had  necessitated  great  care  in  the  censoring  of  the 
advertisements  published.  The  editorial  features,  and  especially 
the  campaign  of  publicity  in  behalf  of  the  World's  Fair,  the  feature 
articles  descriptive  of  the  various  branches  of  the  national  adminis- 
tration of  government,  and  the  educational  and  other  departments, 
were,  for  a  low-priced  publication,  of  exceptional  literary  merit. 

We  must  consider  briefly  the  nature  of  the  alleged  abuses,  the 
circumstances  by  Avhich  they  were  brought  about,  and  the  occasion 
and  purport  of  the  proposed  reforms.  A  clear  view  of  this  topic 
is  essential  to  a  proper  imderstanding  of  the  events  which  followed. 
To  obtain  such  a  view  the  reader  must  keep  in  mind  the  chief  char- 
acteristics of  the  typical  mail  order  journals.  The  importance  of 
the  above  detailed  discussion  of  the  little  Winner  Magazine  of  St. 
Louis,  will  be  better  understood  as  we  proceed. 


CHAPTER  V. 

THE  REFORMS  OF  GENERAL  MADDEN. 

The  Act  of  1879— Thk  First  "Reform" — The  "Abuses"  op  the 
Mail  Order  Journals — Madden's  Views  and  Policies — 
Findings  of  the  Penrose-Overstreet  Commission — The 
Lewis'  Case,  Typical. 

The  Forty-fifth  Congress  opened  in  the  midst  of  the  world  of 
printers'  ink  a  veritable  Pandora's  box.*  This  came  about  by  the 
passage  of  the  Actt  of  March  3,  1879,  creating  Avhat  is  known  as 
the  second-class  rate  of  postage.  For  the  provisions  of  this  Act 
have  let  loose  upon  the  publishing  industry  all  the  furies  of  interne- 
cine competition  among  themselves,  and  of  controversy  with  the 
Postoffice  Department.  These  have  raged  ceaselessly  since  the  be- 
ginning of  the  so-called  reforms  of  General  Madden.  Every  pub- 
lisher in  America  has  suffered  from  these  evils,  but  the  Siege  of 
University  City  affords  perhaps  the  most  conspicuous  illustration. 
True,  there  was  one  good  thing  at  the  bottom  of  the  box  which,  like 
the  spirit  of  Hope  in  the  fable,  has  been  some  consolation  in  the 
midst  of  the  injurious  influences  of  this  most  vicious  measure.  This 
was  the  second-class  or  pound  rate  itself.     But  even  the  periodical 


*Pandora's  Box — A  box  which  Pandora  was  fabled  to  have  brought  from  heaven, 
containing  all  human  ills.  She  opened  it,  and  all  escaped  and  spread  over  the  earth. 
At  a  later  period  it  was  believed  that  the  box  contained  all  the  blessings  of  the  gods, 
which  would  have  been  preserved  for  the  human  race  had  not  Pandora  opened  it,  so 
that  the  blessings,  with  the  exception  of  Hope,  escaped. — CenUiry  Dictionary. 

tThe  following  are  the  provisions  of  this  Act  which  bear  upon  the  subject  of  this 
story: 

Section  7:  Mailable  matter  shall  be  divided  into  four  classes.  First,  Written  Mat- 
ter; second.  Periodical  Publications;  third.  Miscellaneous  Printed  Matter;  fourth, 
Merchandise. 

Section  10:  Mailable  matter  of  the  second  class  shall  embrace  all  newspapers  and 
other  periodical  publications  which  are  issued  at  stated  intervals  and  as  frequently  as 
tour  times  a  year  and  are  within  the  conditions  named  at  Sections  12  and  14  of  this  act 

Section  12:  ^Matter  of  the  second  class  may  be  examined  at  the  office  of  mailing, 
and  if  found  to  contain  matter  which  is  subject  to  a  higher  rate  of  postage,  such  mat 
tcr  shall  be  charged  with  postage  at  the  rate  to  which  the  enclosed  matter  is  subject 
provided  that  nothing  herein  contained  shall  be  so  construed  as  to  prohibit  the  inser 
tion  in  periodicals  of  advertisements  attached  permanently  to  the  same. 

Section  14:'  The  conditions  upon  which  a  publication  shall  be  admitted  to  the  sec- 
ond class  are  as  follows: 

First.  It  must  regularly  be  issued  at  stated  intervals,  as  frequently  as  four  times  a 
year,  and  bear  a  date  of  issue,  and  be  numbered  consecutively. 

Second.     It  must  be  issued  from  a  known  office   of  publication. 

Third.  It  must  be  formed  of  printed  paper  sheets,  without  board,  cloth,  leather, 
or  other  substantial  binding,  such  as  distinguish  printed  books  for  preservation  from 
periodical  publications. 

Fourth.  It  must  be  originated  and  published  for  the  dissemination  of  informa- 
tion of  a  public  character,  or  devoted  to  literature,  the  sciences,  arts,  or  some  special 
industry,  and  having  a  legitimate  list  of  subscribers;  Provided,  however,  that  nothing 
herein  contained  shall  be  so  construed  as  to  admit  to  the  second-class  rate  regular  pub- 
lications designed  primarily  for  advertising  purposes,  or  for  free  circulation,  or  for 
circulation  at  nominal  rates. 

136 


THE  DREYFUS  CASE  OF  AMERICA  137 

publishers  who  advocated  the  passage  of  this  law  have  found  it 
to  savor  of  the  little  book  of  Revelation,  which  was  sweet  upon  the 
tongue;,  but  bitter  in  the  belly.  True,  it  created  in  favor  of  the 
periodical  publisher  a  discrepancy  of  400%  between  the  second-class 
rate  of  postage  (one  cent  a  pound)  required  of  him,  and  the  next 
higher,  third-class  rate  (four  cents  a  pound),  required  of  his  nearest 
rival.  Yet  it  branded  him  with  the  offensive  stigma  of  accepting 
a  Government  subsidy.  Worse  still,  it  bore  the  seeds  of  a  postal 
censorship  and  espionage  fraught  with  the  gravest  menace,  not  only 
to  his  property  rights  as  publisher,  but  even  to  the  freedom  of  the 
press  itself. 

This  law  still  remains  upon  the  statute  book.  Indeed,  it  lies  at 
the  very  foundation  of  the  publishing  industry.  So  deeply  are  its 
provisions  entwined  with  all  the  relations  of  publishers  to  one 
another,  to  the  public,  and  especially  to  the  Postoffice  Department, 
that  it  can  not  be  repealed  until  a  new  law  can  be  drafted  which 
will  adequately  protect  every  existing  interest.  The  difSculties  of 
drafting  such  a  law  are  many,  but  the  dangers  of  the  present  stat- 
ute are  such  that  there  should  be  ceaseless  agitation,  until  the  prob- 
lem is  solved  and  the  publishing  industry  is  removed  from  the  shadow 
of  the  deadly  Upas-tree  of  official  espionage  and  censorship.  A 
brief  outline  of  the  history  of  postal  legislation  is  not  only  needful 
to  any  clear  view  of  the  real  issues  of  the  Siege  of  University  City. 
It  is  also  required  to  enable  the  reader  to  exert  his  influence  as  a 
citizen  in  behalf  of  proper  postal  legislation.  Let  us  try,  then, 
to  get  at  the  outset  a  good  grasp  of  these  very  vital  matters. 

THE    FIRST  "reform." 

The  necessary  and  immediate  effect  of  the  second-class  law  was 
that  many  publishers  sought  to  secure  its  advantages  by  casting 
their  output  into  the  form  of  periodical  publications.  Followed  an 
enormous  development  of  periodical  literature. 

The  publisher  of  books  (especially  cheap  fiction  or  classics  and 
other  standard  works,  either  not  copyrighted  in  America  or  the 
copyright  on  which  had  expired)  took  advantage  of  this  law  by 
issuing  vast  numbers  of  paper-bound  volumes  as  periodicals  under 
a  common  title  and  consecutive  serial  numbers.  This  practice  con- 
tinued uninterruptedly  over  a  period  of  twenty  years,  namely,  until 
after  Madden's  appointment  as  third  assistant  postmaster-general 
on  July  1,  1899.  An  enormous  bulk  of  such  books,  chiefly  fiction, 
was  by  that  time  flooding,  and  in  the  opinion  of  the  postal  authori- 
ties, congesting  the  second-class  mails.  The  publishers  and  authors 
of  permanently  bound  books,  and  especially  of  copyrighted  works 
of  fiction,  objected  to  this  as  unfair  competition.  Postmasters-gen- 
eral, in  their  annual  reports,  had  for  many  years  invited  the  atten- 
tion of  Congress  to  this  and  other  alleged  abuses  with  a  view  to 
remedial  legislation.  Congress  had  uniformly  refused  to  act. 
Finally,  during  the  administration  of  McKinley,  and  under  the  in- 
structions of  Postmaster-General  Charles  Emory  Smith,  Madden, 


138  THE  SIEGE  OF  UNIVERSITY  CITY 

as  third  assistant^  took  up  the  subject.  He  reported  that,  in  his  opin- 
ion, this  particular  class  of  alleged  abuses  could  be  excluded  from 
the  second-class  mails  under  existing  law.  The  publishers  were 
then  cited  to  appear  at  Washington,  and  their  second-class  entry 
was  summarily  withdrawn. 

The  proud  old  Boston  house  of  Houghton,  Mifflin  &  Co.,  publish- 
ers of  the  Atlantic  INIonthly  and  of  a  long  line  of  distinguished 
American  authors,  was  at  that  time  bringing  out  the  Riverside 
Series,  a  popular  fiction  series  of  high  character.  The  traditions 
of  this  concern  were  (and  still  are)  perhaps  the  most  elevated  of 
any  publisher  in  America.  An  implied  stigma  was  thus  attached 
to  their  fair  name  as  having  been  engaged  in  an  illegal  enterprise. 
With  this  was  coupled  the  destruction  of  a  profitable,  and,  as  they 
supposed,  legitimate  portion  of  their  business.  The  offices  of  this 
concern  are  in  the  very  shadow  of  Bunker  Hill.  They  could  not 
submit  tamely  to  such  an  invasion  of  their  rights.  Their  com- 
bativeness  was  roused.  They  determined  to  contest  the  issue  in  the 
courts.  The  decisions  resulting  from  this  litigation  are  among  the 
landmarks  of  postal  history.  From  them  the  whole  course  of  ad- 
ministrative narrowing  of  the  postal  service,  by  a  construction  of 
the  law  of  1879,  in  absolute  contravention  to  its  spirit  and  to  the 
intention  of  its  founders,  has  taken  its  departure. 

The  case  of  Houghton,  Mifflin  &  Co.  in  the  matter  of  the  River- 
side Series  was  carried  to  the  United  States  Supreme  Court.  There 
it  was  lost.  The  right  of  the  PostofRce  Department  to  exclude  such 
publications  at  their  discretion  was  declared  in  effect  to  be  unre- 
viewable by  any  court.  There  was,  however,  a  dissenting  opinion 
in  this  case,  from  which  the  following  is  quoted: 

It  was  admitted  at  the  bar  that  for  more  than  sixteen  years  prior  to 
May  5,  1902,  the  Postoffice  Department  had  acted  upon  the  identical  con- 
struction of  the  statute  for  which  the  appellants  contend.  During  that 
period  many  different  postmasters-general  asked  Congress  to  amend  the 
statute  so  as  to  exclude  from  the  mails  as  second-class  matter,  such  pub- 
lications as  those  issued  by  the  appellant,  and  which  under  the  present  rul- 
ing of  the  Department,  are  declared  not  to  belong  to  that  class  of  mailable 
matter.  Again  and  again  Congress  refused  to  amend  the  statute,  although 
earnestly  urged  to  do  it  by  the  Department.  Representative  Cannon,  now 
Speaker,  in  a  speech  in  opposition  to  the  proposed  change,  explained  the 
reasons  that  induced  Congress  to  pass  the  Act  of  March  3,  1879,  stating: 
"The  question  was  discussed,  unless  my  memory  greatly  misleads,  and  the 
legislation  was  advisedly  had."  The  result  is  that,  after  Congress  had  uni- 
formly refused  to  comply  with  the  requests  of  postmasters-general,  the 
Postoffice  Department  ruled  that  the  appellants'  publications  could  not  go 
through  the  mails  as  second-class  matter.  Thus,  by  mere  order  of  the  De- 
partment, that  has  been  accomplished  which  different  postmasters-general 
have  held  could  not  be  afcomplished  otherwise  than  by  a  change  in  the 
language  of  the  statute  itself;  which  change,  as  we  have  said,  Congress  de- 
liberately refused  to  make,  after  hearing  all  parties  concerned,  and  after 
extended  debate  in  the  House. 

The  intent  of  Congress  was  to  give  the  masses  the  benefit  of  the 
distribution  of  all  forms  of  literature  through  the  mails  at  a  cheap 
rate,  and  thus  to  promote  the  widespread   dissemination  pf  ffoofl 


THE  DREYFUS  CASE  OF  AMERICA  139 

reading  matter.  The  scheme  of  publishing  complete  books  in  the 
guise  of  separate  issues  of  a  periodical  may,  or  may  not,  have  been 
explicitly  intended  to  be  authorized  by  Congress.  The  phrase,  "such 
as  distinguish  printed  books  for  preservation  from  periodical  pub- 
lications," in  the  third  clause  of  Section  14  of  the  law,  would  seem 
to  suggest  that  printed  books  in  paper  covers  not  designed  for  pres- 
ervation might  be  issued  as  periodical  publications.  But  the  Post- 
office  Department  held  otherwise.  Then  the  Supreme  Court  held 
that  in  the  exercise  of  his  discretion  the  postmaster-general  is  not 
subject  to  review. 

That  this  device  operated  in  harmony  with  the  spirit  of  the  law 
cannot  be  doubted.  The  classics  and  other  standard  literature,  as 
well  as  cheap  books  of  a  lower  grade  of  literary  merit,  published 
in  this  manner,  were  eagerly  welcomed  by  the  masses  of  the  people. 
Enormous  editions  were  purchased  and  read  by  persons  who  could 
not  have  afforded  to  buy  them  at  a  higher  price.  A  wider  knowl- 
edge of  good  literature  has  perhaps  been  disseminated  among  the 
masses  in  America  by  this  means  than  by  any  other  plan  devised 
before  or  since. 

These  serial  books  having  been  selected  for  the  first  attack  as 
the  most  conspicuous  abuse,  and  having  been  successfully  "re- 
formed" out  of  existence,  the  Department,  flushed  with  triumph 
and  reinforced  by  favorable  court  decisions,  next  turned  its  atten- 
tion to  the  cheap  mail  order  journals.  A  general  investigation  was 
instituted  as  to  the  status  of  publications  of  this  class.  Rumor  had 
it  that  a  list  of  some  sixty  periodicals  had  been  drawn  up  by  the 
third  assistant,  tlie  second-class  entry  of  which  would  be  withdrawn 
if  the  Department's  policy  was  sustained  in  court. 

THE  "abuses"  of  THE  MAIL  ORDER  JOURNALS. 

The  grounds  on  which  the  mail  order  journals  were  objected  to 
were  chiefly  two.  One  was  the  distribution  of  too  large  a  pro- 
portion of  sample  copies.  The  other  was  the  practice  of  mailing 
the  publication  continuously  to  subscribers  for  many  months  and 
even  years  after  the  paid-in-advance  subscription  period  had  ex- 
pired. It  is  worth  while  to  note  these  points,  for  these  two  prob- 
lems have  been  the  issues  around  which  the  controversies  of  Lewis 
and  of  many  another  publisher  with  the  Postoffice  Department  have 
chiefly  raged.  The  reader  should  also  be  familiar  with  the  act  of 
Congress  of  March  3,  1885.* 

The  phrase  "including  sample  copies"  in  this  act  is  without  limi- 
tation. It  was  therefore  construed  by  publishers  as  conveying  the 
right  to  mail  at  the  second-class  rate  as  many  sample  copies  as  they 
pleased.     The  costly  magazines  could  not  aff'ord  to  take  full  advan- 


*A11  publications  of  the  second  class,  except  as  provided  in  Section  25  of  said  act 
(of  March  3,  1879,  ch.  180,  1  Supp.,  249),  when  sent  by  the  publisher  thereof,  and 
from  the  office  of  publication,  including  sample  copies,  or  when  sent  from  a  news 
agency  to  actual  subscribers  thereto,  or  to  other  news  agents,  shall  *  »  *  be  en- 
titled to  transmission  through  the  mails  at  one  cent  a  povind  or  a  fraction  thereof, 
such  postage  to  be  prepaid  as  now  provided  by  law. 


140  THE  SIEGE  OF  UNIVERSITY  CITY 

tage  of  this  privilege.  Only  the  cheap  mail  order  journals  could 
profit  by  it  to  the  fullest  extent.  They  had  already  learned  that 
very  large  editions  could  be  gotten  out  at  a  merely  nominal  cost 
per  copy.  They  knew  also  that  sample-copy  circulation  was  even 
more  valuable  to  many  mail  order  advertisers  than  a  distribution 
to  annual  paid  subscribers.  Accordingly,  they  welcomed  this  act 
as  the  very  charter  of  their  liberties.  A  large  class  of  mail  order 
publications  sprang  up  and  flourished  amazingly.  The  circulation 
was  limited  only  by  the  number  of  copies  the  publisher  could  afford 
to  manufacture,  or  by  the  number  of  acceptable  names  and  addresses 
that  he  could,  by  hook  or  crook,  secure. 

The  ambition  of  such  publishers  to  build  up  a  large  mailing  list 
resulted  in  the  purchase  of  lists  of  names  and  addresses  from  many 
sources.  Many  of  these,  by  reason  of  clerical  error,  death,  removal, 
change  of  name  by  marriage,  and  other  causes,  were  of  the  class 
known  in  postal  parlance  as  "nixies"  (doubtless  from  the  German 
nichts;  nix,  not  known);  that  is,  persons  concerning  whom  no  in- 
formation can  be  obtained  at  the  postoffice  addressed.  Many  sam- 
ples were  sent  to  a  class  of  persons  who  did  not  approve  the  con- 
tents of  the  editorial  columns  or  advertising  pages  of  certain  of 
these  publications.  Such  persons  were  affronted,  and  indignantly 
refused  to  accept  them.  Mail  carriers  and  other  employees  at  the 
local  offices  reported  to  the  Department,  through  the  postmasters, 
that  quantities  of  sample  copies  and  exj^ired  subscriptions  were 
thus  being  refused.  Others  were  being  torn  from  tlie  wrappers 
and  dropped  upon  the  floor  of  the  postoffice,  or  in  the  adjacent 
street.  Quantities  of  such  refused  copies  of  mail  order  periodicals 
were  regularly  collected  by  many  postmasters  and  burned.  At  the 
cities  which  became  the  chief  centres  of  this  industry  many  tons  of 
separately  addressed  sample  copies  of  mail  order  journals  were 
being  deposited  in  the  mails.  The  postal  employees  not  unnatur- 
ally complained  through  the  postmaster  to  the  Department  of  the 
enormous  labor  of  handling  and  routing  them.  Railway  mail  clerks 
similarly  complained  of  the  labor  caused  by  this  enormous  tonnage 
of  periodicals  marked  sample  copies. 

Many  millions  of  both  subscribers'  and  sample  copies  of  these 
same  journals  were  being  accepted  and  welcomed  by  the  recipient. 
They  were,  indeed,  the  only  jjeriodicals  which  found  their  way  into 
the  extreme  rural  districts,  with  the  exception  of  local  weeklies  and 
the  cheaper  class  of  agricultural  papers.  Very  few  persons  residing 
in  large  citie.s  are  aware  of  the  dearth  of  reading  matter  that  exists 
today  in  such  localities.  Men  likely  to  be  called  to  the  office  of 
postmaster-general  are  of  a  class  unfamiliar  with  these  conditions 
and  unresponsive  to  the  needs  of  rural  people.  It  is  unlikely  that 
any  postmaster-general  of  the  United  States  ever  read  through  a 
copy  of  one  of  tliese  cheap  little  papers,  or  entertained  the  opinion 
that  any  one  else  (except  perhaps  a  very  uncultured  person)  would, 
could  or  should  content  himself  with  such  a  form  of  literature.   The 


THE  DREYFUS  CASE  OF  AMERICA  141 

good  influence  which  was  exerted  upon  tlie  whole  by  these  papers 
was,  tlierefore,  mostly  overlooked  or  disregarded  by  the  Depart- 
ment. The  burden  of  complaint  from  the  postal  officiary  was  really 
caused  by  the  non-delivery  of  a  small  fraction  of  their  total  output. 
Yet  the  culminative  effect  of  many  complaints  over  a  series  of  years 
resulted  in  a  postoffice  tradition  that  there  was  little  or  no  real  popu- 
lar demand  for  the  cheap  mail  order  journals.  No  conclusion  could 
be  at  greater  variance  from  the  facts.  Yet  this  tradition  seems  to 
have  been  the  animus  of  the  agitation  in  the  Department  which  in 
the  end  gave  rise  to  the  so-called  reforms  of  General  Madden. 

The  custom  of  continuing  to  mail  copies  to  subscribers,  after  the 
paid-in-advance  subscription  period  had  expired,  was  particularly 
objected  to  by  postmasters.  Many  publishers  printed  notices  that 
subscriptions  would  not  be  discontinued  until  the  subscriber  gave  an 
order  to  that  effect  and  paid  up  his  back  subscription.  Not  a  few 
publishers  would  carry  subscribers  for  years  beyond  the  original 
paid-in-advance  subscription  period.  They  would  then  attempt,  by 
threats  of  litigation  purporting  to  come  from  an  attorney  or  col- 
lection agency,  to  collect  arrearages.  An  impression  was  adroitly 
conveyed  that  the  act  of  accepting  a  periodical  from  the  postoffjce 
a  single  month  after  the  paid-in-advance  subscription  period  had 
expired,  involved  a  legal  obligation  to  pay  for  the  subscription  for 
another  year.  Man}^  persons,  therefore,  became  suspicious,  and 
refused  to  take  from  the  postoffice  either  sample  copies  or  expira- 
tions. Indeed,  those  who  did  not  like  a  periodical  would  sometimes 
lefuse  to  accept  it  before  their  subscriptions  had  expired. 

Another  complication  was  caused  by  so-called  gift  subscriptions. 
One  occasion  of  these  was  the  cheap  price  at  which  the  mail  order 
journals  were  sold.  Another  was  the  publishers'  offers  to  agents 
and  club  raisers  of  premiums  and  prizes  for  various  contests.  Many 
persons  who  happened  to  like  a  periodical  would  present  subscrip- 
tions to  their  friends.  Oftentimes  they  would  fail  to  notify  the 
recipient  of  the  gift.  Then  the  latter  would  refuse  to  accept  it 
from  fear  lest  the  act  of  taking  it  from  the  postoffice  might  involve 
some  obligation.  Agents  and  club  raisers  anxious  to  win  rewards  in 
various  subscription  contests  would  not  infrequently  send  to  the 
publishers^  as  legitimate  subscribers,  names  of  their  townspeople 
without  asking  consent.  The  recipient,  not  knowing  why  the  paper 
was  sent,  would  oftentimes  refuse  to  take  it  out  of  the  postoffice. 
In  these  various  ways  the  number  of  undeliverable  copies  left  on 
the  postmaster's  hands  Avas  constantly  augmented. 

The  Postal  Laws  and  Regulations  required  the  postmaster  in  such 
cases  to  notify  the  publisher.  They  provided  that  undelivered  cop- 
ies should  be  held  to  be  returned  in  case  the  jDublisher  saw  fit  to 
forward  postage  for  that  purpose.  The  copies  of  the  cheap  mail 
order  journals  thus  refused  had,  however,  no  value  to  the  publisher. 
They  were  not  worth  the  postage  to  bring  them  back.  The  post- 
masters'  notices   were,   most   of    them,   ignored.      Some   publishers 


142  THE  SIEGE  OF  UNIVERSITY  CITY 

would  even  neglect  to  strike  ofl"  the  names  of  "nixies,"  or  persons 
reported  as  deceased,  removed,  and  the  like,  from  his  subscription 
list.  His  sole  object  was  to  maintain  liis  circulation;  this  was  at- 
tained by  the  mailing  of  the  copies,  whether  deliverable  or  not;  for 
the  postofHce  receipts  that  a  certain  number  of  copies  had  been 
deposited  in  the  mails  were  commonly  accepted  as  proof  by  adver- 
tisers without  much  inquiry  as  to  the  legitimacy  of  the  circulation. 
Experience  has  since  sliown  that  many  of  these  conditions  could 
have  been  corrected  by  a  very  simple  device,  which  became  a  law 
on  May  12,  1910.  The  Postoffice  Department  now  returns  to  the 
publisher  undeliverable  copies  of  his  periodical,  and  requires  him 
by  means  of  postage  due  stamps  affixed,  to  pay  a  sum  equal  to  the 
cost  of  transmitting  them  at  the  third-class  postal  rate.  The  eft'ect 
of  thus  penalizing  the  publisher  is  automatically  to  cause  him  to 
clean  up  his  subscription  lists,  without  offensive  espionage  or  other 
departmental  interference.  Unfortunately,  no  such  device  appears 
to  have  suggested  itself  to  the  official  mind  at  the  period  in  ques- 
tion. So  objectionable  had  the  mail  order  journals  become  to  the 
Postoffice  Department,  and  so  numerous  were  the  complaints,  that 
at  the  instance,  and  with  the  approval  of  Postmaster-General  Smith, 
Third  Assistant  Madden  determined  to  ajjply  the  drastic  remedy  of 
"reforming"  what  he  deemed  the  worst  offenders  among  the  mail 
order  paper  wholly  out  of  existence. 

MADDEN 's  VIEWS  AND   POLICY. 

The  device  adopted  was  a  further  exercise  of  the  unreviewable 
discretion  of  the  postmaster-general.  A  construction  was  for  the 
first  time  placed  upon  the  law  of  1879,  far  narrower  than  the  evi- 
dent intent  of  Congress.     Madden  himself  says: 

I  was  appointed  third  assistant  postmaster-general  on  July  1,  1899,  by 
President  McKinley.  I  then  had  something  over  seven  years'  experience  in 
a  local  postoffice  at  Detroit,  Michigan.  Part  of  my  duties  as  superintendent 
was  to  look  after  and  report  on  the  mailings  of  second-class  matter,  and 
to  apply  the  law  and  regulations  locality.  I  had  taken  especial  interest  in 
the  suliject  and  made  a  study  of  it.  During  this  tinie  the  annual  reports 
of  tlic  Department,  and  especially  those  of  tlie  postmasters-general,  were 
dealing  with  so-called  abuses  in  the  second  class.  The  Department  was 
complairnng  that  publishers  were  imposing  upon  the  service,  and  mailing 
as  matter  of  that  class,  many  publications  not  deserving  that  classification 
and  those  rates.  These  annual  reports  enumerated  and  explained  the 
abuses,  and  appealed  for  legislation  to  correct  them.  An  annual  report  of 
the  postmaster-general  subsequent  to  my  appointment  as  third  assistant 
eomplainrd  that  ]>r()l)ably  fifty  per  cent  of  all  the  matter  mailed  as  second- 
class  was  not  lawfully  entitled  to  that  rate.  Innncdialely  after  my  ai)point- 
ment,  I,  therefore,  took  up  the  study  of  the  subject  from  a  departmental 
standjKjint.  I  had  a  number  of  conferences  with  Posttnaslcr-General 
Charles  I'Lmory  .Sniitii.  ,\11  attempts  to  secure  legislation  had  failed.  Many 
members  of  Congress  had  privately  said  they  considered  the  existing  law 
ample  to  get  rid  of  most  of  the  abuses  conii)lained  of.     I  agreed  with  that. 

After  mature  consideration  and  mapping  out  a  plan  of  procedure,  I  pro- 
posed to  the  postmaster-general  that  an  administrative  reform  of  tlie  abuses 
be  undertaken.  This  was  favored.  President  McKinley  and  his  Cabinet 
approved.     Thereupon    I    drew    and    the    postmaster-general  signed  three 


THE  DREYFUS  CASE  OF  AMERICA  143 

amendments  to  the  Postal  Laws  and  Regulations.  They  were  known  as  the 
reform  regulations.  They  amounted  to  a  revised  interpretation  of  the  law 
of  second-class  mail  matter.  They  were  published  for  the  benefit  of 
the  postal  service  and  the  publishing  industrj'  on  July  17,  1901.  It  was  pro- 
vided that  they  should  not  take  efifect  until  the  first  of  the  following  Octo- 
ber. Tliis  was  to  give  publishers  due  notice  of  how  the  law  would  be  ad- 
ministered after  that  date,  and  give  those  who  could  the  opportunity  to 
work  out  compliance. 

The  purport  of  Madden's  first  regulations  was  to  place  a  new 
construction  upon  the  fourth  clause  of  the  Act  of  March  3,  1879, 
and  chiefly  ujDon  the  affirmative  provision  requiring  "a  legitimate 
list  of  subscribers"  and  upon  the  two  negative  provisions  excluding 
periodicals  "designed  primarily  for  advertising  purposes  or  for  free 
circulation  or  for  circulation  at  nominal  rates." 

The  questions  raised  by  the  language  of  this  statute  have  no- 
where been  specifically  answered  by  an  Act  of  Congress.  What  is 
a  legitimate  list  of  subscribers.''  Congress  has  not  determined. 
What  is  the  standard  of  judgment  as  to  the  primary  design  of  a 
publication?  Wliat  are  the  distinguishing  marks  of  a  publication 
"designed  primarily  for  advertising  purposes/'  or  of  a  publication 
"designed  primarily  for  free  circulation,  or  for  circulation  at  nomi- 
nal rates".'*  What  is  a  nominal  rate.''  Are  sample  copies  (specific- 
ally included  in  the  publisher's  right  to  mail  at  the  second-class 
rote  by  the  supplementary  act  of  March  3,  1885)  evidence  that  a 
publication  is  designed  primarily  for  free  circulation?  If  so,  what 
proportion  of  sample  copies  will  create  such  presumption?  The  an- 
swers to  all  these  questions  and  many  more  are  left  by  Congress 
wholly  within  the  discretion  of  the  postmaster-general.  And  the 
Supreme  Coitrt  of  the  United  States  has  definitely  ruled  that  if  the 
postmaster-general  is  acting  without  fraud  in  the  exercise  of  a 
reasonable  discretion,  his  decision  will  not  be  subject  to  review. 

The  reforms  of  General  Madden  and  his  successors  have  con- 
sisted in  building  upon  this  manifestly  inadequate  basis  of  law 
a  towering  superstructure  of  administrative  construction.  Each 
postmaster-general,  by  his  third  assistant,  has  answered  these  ques- 
tions and  many  others  in  accordance  with  his  own  views,  and  there 
has  been  no  man  to  say  him  nay. 

The  process  of  this  reform  from  the  departmental  standpoint  is 
further  explained  by  IMadden  in  the  following  language: 

Let  it  be  understood  that  an  administrative  reform  of  this  kind  has  two 
phases.  First,  there  is  the  refusal  to  admit  to  the  second  class,  publica- 
tions of  the  types  or  characters  inhibited  by  the  new  regulations.  Second, 
all  the  publications  of  those  types  or  characters  already  in  the  second  class 
must  be  excluded.  Manifestly,  any  other  course  would  be  outrageous.  The 
Department  has  no  power  to  charge  different  rates  upon  matter  of  the  same 
character.  It  would  not  do  to  have  some  portion  going  at  the  second-class 
rate  of  a  cent  a  pound,  and  another  portion  at  the  third-class  rate  of  eight 
cents  a  pound,  if  the  difference  in  rate  depended,  not  upon  a  difference  in 
the  character  of  the  matter,  but  merely  upon  whether  the  act  of  classifi- 
cation occurred  before  or  after  the  date  when  the  new  regulation  took 
effect.  The  mail  service  must  be  open  to  all  upon  equal  terms  and  condi- 
tions.    Otherwise  the  Department  would  be  conferring  a  monopoly  upon 


144  THE  SIEGE  OF  UNIVERSITY  CITY 

those  fortunate  enough  to  come  into  existence  and  get  into  the  second  class 
before  the  new  regulition  took  effect.  For  the  third-class  rate  would  be 
prohibitive  of  competition.  Just  about  the  beginning  of  this  administra- 
tive reform  Congress  passed  the  Act  of  March  3,  1901.*  I  was  myself 
consulted  by  the  chairman  of  the  Postoffice  Committee  in  the  House  con- 
cerning the  language  and  purposes  of  this  statute  before  it  was  enacted. 
Its  language  shows  its  purpose.  It  was  to  protect  publishers  from  hasty 
or  ill-considered  action  by  a  postmaster  or  l)v  the  Department,  and  to 
prevent  the  striking  down  of  an  enterprise  without  warning. 

Under  the  regulations  the  local  postmaster  determines  in  the  first  in- 
stance what  is  first-class,  what  is  third-class,  and  what  is  fourth-class  mat- 
ter, and  charges  the  rate  prescribed  by  law  for  those  classes.  It  is  differ- 
ent with  second-class  matter.  The  third  assistant  postmaster-general,  at 
the  Department  at  Washington,  determines  in  the  first  instance  what  is 
second-class  matter. 

The  usual  custom  is  this:  The  local  postmaster  receives  an  application 
for  the  entry  of  a  publication  in  the  second  class.  The  application,  accom- 
panied with  a  copy  of  the  publication,  is  sent  to  the  third  assistant.  In 
the  meantime  the  applicant  is  required,  if  he  desires  to  mail  the  publica- 
tion before  a  decision  is  rendered,  to  deposit  in  trust  with  the  local  post- 
master, as  a  protection  to  the  revenue,  an  amount  of  money  sufEcient  to 
cover  the  third-class  rate  sliould  the  third  assistant  decide  against  the  pub- 
lication. The  publisher,  under  the  regulations  quoted,  has  the  right  to  ap- 
peal from  an  adverse  decision  by  the  third  assistant  to  the  postmaster-gen- 
eral. 

No  blanket  order  could  be  issued  to  postmasters  to  exclude  from  the 
second  class,  publications,  whicli  in  their  judgment,  were  prohibited  by  the 
new  regulations.  Each  individual  case  must  be  tried  and  decided  upon 
its  own  merits  and  by  the  third  assistant  postmaster-general. 

After  some  successes  in  my  own  work  I  v\'as  importuned  by  mj  superiors, 
by  my  subordinates,  and  by  many  publishers,  to  hit  hard  and  fast,  under 
the  cover  of  the  public  approval  gained,  and  beat  down  what  they  regarded 
as  abuses.  It  is  surprising  how  many  publishers  will  regard  the  publica- 
tion of  a  rival  an  abuse,  how  superior  officers  will  regard  the  publication 
which  has  criticized  them  or  their  work  an  abuse,  and  how  subordinates  will 
try  to  curiy  favor  by  appealing  to  the  human  weakness  of  the  superior 
whose  vanity  or  egotism  has  been  enlarged  by  a  success.  It  is  not  easy, 
under  such  circumstances,  to  preserve   an  even  keel. 

I  resisted  the  pushing  and  the  persuasion  to  move  headlong  without 
compass  or  balance.  I  sought  to  keep  squarely  within  the  four  corners  of 
the  statute  and  to  have  the  morals  as  well  as  the  law  fairly  on  my  side. 
The  Department  had  been  lax  in  its  administration  of  that  law.  That  was 
no  fault  of  the  publishers.  Many  things  had  been  classified  as  of  the  sec- 
ond class  wliich  had  no  legal  right  to  that  classification,  but  it  was  not  by 
fraud.  It  was  the  Department's  own  wrong  of  positive  sanction  or  sufferance. 
Publishers  were  bound  to  assume  tiiat  the  law  had  been  properly  adminis- 
tered, and  on  the  faith  of  it  had  spent  their  capital  and  energies  in  estab- 
lishing their  enterprises.  Even  if  their  publications  were  in  that  class  by 
doubtful  right,  they  were  not  to  be  regarded  as  criminals  or  wrongdoers. 
NoM',  after  many  years,  v^'ith  the  law  standing  as  it  had  stood  from  the 
first,  with  no  change  in  the  publications,  but  only  a  change  of  regulation, 
which  might  or  might  not,  under  judicial  review,  prove  to  be  "consistent 
with  law,"  those  enterprises  could  not  be  ruthlessly  struck  down  by  sud- 
denly changing  the  classification  and  assessing  a  prohibitive  rate  upon  their 
products. 

Congress  appreciated  the  difficulty  and  delicacy  of  the  reform  work  and 


'When  any  publication  has  been  accorded  second-class  mail  privileges,  the  same 
shall  not  be  suspended  or  annulled  until  a  hearing  shall  have  been  granted  to  the 
parties  interested. 


THE  DREYFUS  CASE  OF  AMERICA  145 

fortified  me  with  a  corps  of  my  own  inspectors  (special  agents)  and  my 
own  special  attorney.  Now,  the  third  assistant's  office,  which  had  adminis- 
tered this  law  for  so  many  years,  proposed  to  move  forward  within  the 
lines  of  law. 

THE  VIEWS  OF  PUBLISHERS. 

The  following  remarks  of  Mr.  John  J.   Hamilton  bear  directly 

upon  the  subject  of  this  story.     The  case  of  the  publishers  against 

the  reform  policy  of  General  Madden  and  his  successors  has  no- 

■where  been  more  ably  presented.    Mr.  Hamilton  said: 

The  attitude  of  the  Government  toward  publishers  has  changed  in  the 
past  few  years.  The  spirit  of  suspicion  has  gone  out  from  some  source 
and  permeated  the  whole  postal  officiary.  The  attitude  of  the  clerks  in  the 
city  postoffices  all  over  the  country,  who  are  charged  with  the  duty  of  look- 
ing after  second-class  matter,  has  become  suspicious,  and  in  some  cases, 
even  unfriendly;  as  if  every  publisher  were  potentially,  at  least,  a  violator 
of  law,  lacking  only  the  opportunity.  *  *  *  There  was  neither  cowardice 
nor  ineflBciency  in  the  postal  administration  between  1879  and  1890;  but  a 
truer  insight  into  the  meaning  and  purpose  of  the  law  than  has  prevailed 
from  1890  to  1906.  All  the  eloquent  denunciations  of  second-class  matter 
which  Mr.  ^Madden  has  quoted  from  postmasters-general,  beginning  with 
Mr.  Wanamaker  and  running  down  almost  to  the  present,  have  been  based 
upon  a  profound  misunderstanding  of  the  original  intent  of  the  law. 
*  *  *  Jlr.  ]\ladden  has  demonstrated  that  the  law  in  its  present  inter- 
pretation is  unenforcible.  He  admits  that  if  he  should  go  ahead  on  the 
lines  of  this  policy,  in  the  construction  he  puts  upon  it,  and  make  no  dis- 
criminations, he  could  throv/  out  of  the  mails  and  destroy  or  heavily  dam- 
age, from  sixty  to  seventy  per  cent  of  all  the  newspapers  and  from  seventy 
to  eighty  per  cent  of  all  the  periodicals  in  the  coimtry.  I  agree  with  him 
absolutely.  But  I  think  this  is  because  he  has  accepted  the  incorrect  inter- 
pretation of  the  later  postmasters-general,  instead  of  the  true  interpreta- 
tion put  upon  the  laws  by  tiie  postmaster-general  who  was  in  office  vvhen 
the  statute  was  enacted,  and  his  immediate  successors.  They  personally 
knew  the  real  intent  of  Congress  in  making  the  laws  what  they  v/ere.  *  *  * 

CRITICISM    OF    THE   ACT   OF    1ST9. 

Most  of  the  annoyances  to  which  publishers,  postal  officials,  senators, 
representatives  and  others  have  been  subjected  in  recent  years,  in  the  form 
of  friction  betv/een  the  Postoffice  Department  and  publishers,  have  arisen 
from  recent  interpretations  of  the  following  proviso  in  the  statute: 

"Provided,  however,  that  notliing  herein  contained  shall  be  so  construed 
as  to  admit  to  the  second-class  rate  regular  publications  designed  primarily 
for  advertising  purposes,  or  for  free  circulation  or  for  circulation  at  nomi- 
nal rates." 

I  was  glad  Mr.  Madden  attacked  this  proviso  in  so  vigorous  a  fashion; 
for  nothing  could  be  truer  than  his  statement  about  the  consequences  of  a 
uniform  enforcement  of  its  provisions  in  the  new  sense  in  which  he  now 
construes  it.  It  can  be  done  only  by  stationing  an  officer  at  the  door  of 
every  publisher,  to  execute  the  decrees  of  a  censor.  It  would  establish  a 
censorship  in  the  most  dangerous  sense  of  the  term.  I  am  glad  Mr.  Mad- 
den was  big  and  patriotic  enough  to  say  that  he  does  not  wish  such  a  cen- 
sorship; that  there  is  no  need  for  it;  that  it  would  involve  widespread  dam- 
age to  a  great  interest. 


*Address  of  Jolm  J.  Hamilton  of  the  Iowa  Homestead,  speaking  as  a  member  of 
the  Postal  Committee  of  the  National  Agricultural  Press  League,  before  the  Penrose- 
Overstreet  Congressional  Postal  Commission  at  New  York,  October  2,  1906,  on  the 
theme  "A  Plea  for  the  Business  Freedom  of  the  American  Press." 


146  THE  SIEGE  OF  UNIVERSITY  CITY 

Congress  desired  to  shut  out  what  is  known  as  "house  organs"  or  spur- 
ious newspapers  or  magazines  issued  by  wholesale  and  retail  merchants, 
manufacturers,  and  others,  as  mediums  of  communication  with  their  cus- 
tomers and  the  public.  The  exception  made  of  publications  designed  pri- 
marily for  advertising  purposes,  or  for  free  circulation,  or  for  circulation 
at  nominal  rates,  was  not  aimed  at  any  genuine  newspaper  or  periodical, 
))ut  soleh-  at  the  "house  organs,"  for  they  always  have  one  or  more  such 
characteristics.  The  house  organ  was  legislated  out  of  existence  or  com- 
pelled to  pay  circular  postage;  books  paid  the  postage  rate  prescribed  by 
law;  newspapers  and  magazines  were  undisturbed  in  their  free  develop- 
ment.   Such  was  the  true  intent  of  the  law  of  1879. 

FREEDOM    OF    THE    PRESS. 

I  agree  with  the  Postal  Committee  of  the  American  Newspaper  Pub- 
lishers' Association  in  recommending  that  the  words  "nominal  rates"  be 
stricken  from  the  law.  The  provision  opens  the  door  to  a  censorship  of 
the  press  through  interference  with  its  business  methods.  I  also  endorse 
their  statement  that  all  publications  were  designed  primarily  for  advertis- 
ing purposes  which  implies  that  that  part  of  the  troublesome  proviso  should 
also  go.     *     *     * 

And  right  here  I  wish  to  enter  my  emphatic  protest  against  the  state- 
ment that  one  cent  postage  is  a  subsidy  to  the  press.  At  the  head  of  the 
pink  blank  which  publishers  are  required  to  fill  out,  sign  and  swear  to  as 
a  condition  precedent  to  securing  entry  in  the  second  class,  somebody  has 
put  the  following  misstatement:  "A  publisher's  second-class  mailing  privi- 
leges are  in  the  nature  of  a  subsidy,  because  the  cost  of  distribution  is 
mainly  borne  by  the  public  treasury."  (Laughter.)  I  have  signed  and 
sworn  to  several  statements  under  this  heading,  but  always  with  the  feel- 
ing that  I  deserved  to  be  prosecuted  for  perjury  for  assenting  to  what 
I  regard  as  a  falsehood  and  an  insult  to  the  American  press.  I  hope  that 
this  commission  will  recommend  that  Congress  enact  a  law,  if  necessary, 
requiring  the  public  printer  to  omit  such  statements  from  future  editions 
of  this  document.     (Applause.) 

THE   VALUE    OF   THE    CHEAP    PERIODICALS, 

The  educational  influence  of  an  abundance  of  good,  cheap  reading  matter 
Vv'as  never  more  needful  than  in  these  days  of  vast  immigration  of  foreigners 
to  our  shores.  The  press  is  the  eyes,  ears,  and  tongue  of  the  public.  It 
is  fundamental  to  all  scientific  and  industrial  progress.  In  the  wars  against 
tuberculosis,  yellow  fever,  and  other  contagions,  and,  indeed,  in  every  effort 
to  secure  public  co-operation,  it  is  indispensable.  In  times  of  epidemic, 
the  poor  and  ignorant  are  usually  the  first  victims,  and  their  homes  the 
foci  of  infection.  Such  homes  are  invaded  only  by  the  very  cheap  publica- 
tion and  the  sample  copy.  The  cheapest  of  these  abound  in  current  infor- 
mation about  hygiene,  sanitation,  and  the  like.  They  let  the  light  of  mod- 
ern science  into  these  dark  places,  dispel  ignorance  and  prejudice,  pave 
the  way  for  quarantine,  allay  panic,  and  spread  the  gospel  of  cleanliness. 
What  short-sighted  folly  to  curtail  and  curb  the  very  influence  which  turns 
your  mobs  into  organized  intelligence! 

The  old  style  freedom  to  publish  includes  the  liberty  of  publishing  a  very 
poor  newspaper  or  magazine.  If  the  editor  lacked  originality,  he  could  use 
the  scissors  and  paste-pot  to  the  fullest  extent.  Advertisements  were  taken 
as  a  matter  of  course,  as  they  had  been  part  of  the  American  newspaper 
from  the  beginning,  just  as  selected  miscellany  had  been.  All  that  was  re- 
quired was  "a  list  of  legitimate  subscribers,"  very  small,  of  course,  if  the 
publisher  was  not  able  to  engage  in  the  business  on  a  large  scale  or  employ 
a  corps  of  efficient  editors,  writers,  reporters  and  managers.     •     *     * 

Legitimate  publications  are  not  asking  the  Government  to  protect  them 
from  unfair  competition.  They  do  not  complain  of  the  use  of  premiums  or 
the  circulation  of  free  samples  or  advertising  copies  by  other  publishers. 


THE  DREYFUS  CASE  OF  AMERICA  147 

They  know  that  such  evils  are  forms  of  competition,  and  correct  them- 
selves. They  know  that  success  comes  only  from  good  management,  based 
on  merit.  All  they  ask  is  to  be  undisturbed  as  long  as  they  obey  the  laws. 
They  want  their  rights  defined  by  law  and  not  by  administrative  regulation. 
They  want  the  protection  of  the  courts.  Let  violators  of  the  law  suffer; 
but  stop,  once  and  forever,  administrative  interference  with  legitimate  pri- 
vate business  under  the  guise  of  collecting  correct  postage  rates. 
(Applause.) 

CUSTOMS   OF   THE    TRADE. 

There  are  certain  ancient  and  well-established  practices  of  the  publish- 
ing business  which  it  would  be  idle  for  the  Postoffice  Department  to  try  to 
wipe  out,  which  it  never  will  be  able  to  do  away  with  entirely,  and  which 
therefore  it  has  no  business  to  interfere  with  in  a  few  cases.  These  are 
rooted  in  the  habits  of  botli  publishers  and  subscribers  all  over  the  country. 
They  exist  at  ten  thousand  small  postoffices,  in  every  little  hamlet  in  the 
land.  They  will  always  exist  there,  and  will  always  be  tolerated  by  the 
postal  authorities  in  these  local  spheres.     Some  of  these  are  the  following: 

First.  The  practice  of  cutting  rates  to  whatever  extent  is  necessary  to 
secure  circulation. 

Second.  The  practice  of  offering  premiums  to  both  subscribers  and  club 
agents. 

Third.  The  practice  of  making  low  clubbing  rates  in  combination  with 
other  publications. 

Fourth.  The  practice  of  giving  away  subscriptions  to  friends,  relatives, 
and  others,  by  the  publishers  and  other  persons. 

Fifth.  The  practice  of  selling  subscriptions,  in  small  or  large  numbers, 
to  subscription  agents  and  others,  at  reduced  rates. 

Sixth.  The  practice  of  continuing  to  send  papers  to  subscribers,  after 
the  time  paid  for  has  expired. 

These  practices  cannot  be  uprooted  without  revolutionizing  the  whole 
local  newspaper  business.  When  laws  are  proposed  at  AVashington  to  pro- 
hibit them,  it  is  common  to  quote  the  Postoffice  Department  as  promising 
that  they  will  not  be  enforced  as  against  the  small  country  paper.  The 
argument  is  urged  that  they  are  intended  for  other  and  larger  publications. 
It  is  thus  tacitly  admitted  that  it  is  not  intended  to  enforce  such  laws  uni- 
formly; in  plain  English,  that  it  is  proposed  to  make  fish  of  one  and  fowl 
of  another.  I  wish,  however,  here  to  commend  what  Mr.  Madden  says  about 
treating  all  alike.     That  is  the  true  principle. 

Partiality  is  the  essential  vice  of  all  bureaucratic  government.  Never 
since  our  Postoffice  Department  began  to  interfere  in  such  matters  has  it 
been  able  to  treat  all  alike.  Never  will  it  be  al)le  to  enforce  such  a  policy 
uniformly.  The  only  remedy  is  to  stop  the  experiment.  Let  the  publishing 
business  regulate  itself.  Give  publishers  the  liberty  they  used  to  have. 
Let  them  alone  until  they  disobey  the  law.  Then  let  the  courts  enforce  the 
postal  laws,  as  they  enforce  all  others. 

FINDINGS   OF   THE   PENROSE-OVERSTREET   COMMISSION. 

This  c-oncludes  our  brief  sketch  of  the  so-called  reform  policy  of 
the  Postoffice  Department  of  the  alleged  abuses  of  the  second  class. 
Its  value  will  be  greatly  enhanced,  however,  if  we  anticipate  future 
developments  by  quoting  here  certain  of  the  conclusions  of  the  Pen- 
rose-Overstreet  Commission,  the  further  acts  of  which  will  appear 
hereafter.  Under  the  caption  "Views  of  the  Commission,"  in  its 
official  report  to  Congress,  occur  the  following  statements: 

The  enormous  disproportion  between  the  periodical  rate  (second-class) 
and  the  printed  matter  rate  (third-class)  is  undoubtedly  the  prime  cause 
of  the  tremendous  expansion  of  the  periodical  press  in  the  United  States. 
Although  the  United  States  press  stands  relatively  low  in  the  scale  of  book- 


148  THE  SIEGE  OF  UNIVERSITY  CITY 

making,  it  produces  approximately  sixty  per  cent  of  all  the  periodicals  pub- 
lished in  the  world. 

At  the  same  time  this  disparity  lies  at  the  root  of  most  of  the  evils  and 
abuses  tliat  have  infested  the  periodical  press.  It  was  tlie  immediate  pro- 
genitor of  the  book  abuse  wiiercby  complete  novels,  chargeable  in  their 
own  pro]>er  character  at  the  third-class  rate,  were  transmuted  into  period- 
icals bj'  the  thin  disguise  of  a  serial  name  and  number.  It  is  the  immediate 
cause  of  that  worst  ty])e  of  so-called  "mail  order  papei*,"  which  is  but  a 
combination  circular,  plastered  over  with  enough  reading-matter  to  make 
it  look  something  like  a  periodical. 

The  policy,  however,  of  giving  printed  matter  in  the  periodical  form 
this  tremendous  advantage  over  printed  matter  in  other  forms,  is  so  deeply 
rooted  in  the  American  postal  system  that  it  will  probably  never  be  wholly 
eradicated.  While  it  is  probably  true  that  the  reasons  which  may  originally 
have  existed  for  the  extraordinary  advantages  accorded  periodicals  have 
largely  ceased  to  exist  with  the  invention  of  wood  pulp  paper  and  the 
typesetting  machine,  there  is  yet  great  foice  in  the  argument  that  the  ad- 
vantage of  the  low  rate  has  been  passed  on  to  the  subscriber,  and  that  it 
is  too  late  now  to  take  it  from  him.     *     *     * 

Another  reason  why  no  final  and  definite  action  can  be  grounded  upon 
an  approximate  esthnate  of  the  cost  of  second-class  mail  matter,  is  because 
the  gradual  adjustment  of  the  publishing  business  throughout  the  long  pe- 
riod of  time  to  a  low  second-class  rate,  renders  it  practically  impossible  to 
raise  that  rate  to  any  degree  worth  the  attempt.  In  order  to  continue  in 
business  at  all,  numbers  of  publishers  must  have  the  power  to  get  their 
transportation  done  in  some  way  at  a  cost  not  much  above  the  present  rate. 
In  view  of  the  nice  adjustment  of  prices  and  methods  to  the  one  cent  a 
pound  rate,  a  radical  horizontal  increase  (whereby  the  service  could  no 
longer  be  had  in  any  form  at  the  present  price)  would  result  simply  in 
destroying  all  publishers  on  the  margin  to  the  advantage  of  those  above  the 
margin. 

Commenting  upon  the  standards  of  classification  of  the  Act  of 
3  879,  the  Commission  makes  the  following  assertions: 

In  truth,  the  difficulty  with  the  classification  attempted  by  this  statute 
is  simply  that  it  does  not  classify.     *     *     * 

In  the  Act  of  March  3,  1879,  the  draftsman,  instead  of  holding  fast  to 
the  safe  and  universal  principle  of  classifying  by  simply  enumerating  the 
objects  to  be  embraced,  departed  from  it  in  a  measure  and  proceeded  to 
make  an  elaborate  system  of  definitions. 

Instead  of  taking,  moreover,  as  the  elements  of  his  definition,  the  char- 
acteristics of  the  physical  things  to  be  classified,  he  proceeded  to  construct 
it  out  of  the  purposes  for  which  those  things,  namely,  newspapers  and 
periodicals,  were  supposed  to  be  designed.  A  newspaper  or  periodical 
must  be  "originated  and  piiblished  for  the  dissemination  of  information 
of  a  public  character,  or  devoted  to  literature,  the  arts,  sciences,  or  some 
special  industry."  Now,  the  object  of  a  definition  is  to  define,  to  delimit. 
It  should  serve  as  a  means  of  separating  the  things  contained  under  the 
term  defined  from  all  other  things.  But  in  what  way  can  it  be  said  that  a 
requirement  that  certain  printed  matter  should  be  "devoted  to  literature" 
serves  to  mark  it  oiT  from  anything  else  that  can  be  put  into  print?  There 
is  practically  no  form  of  expression  of  the  human  mind  that  cannot  be 
brought  within  the  scope  of  "public  information,  literature,  the  sciences, 
art,  or  some  sjiecial  industry."  It  would  have  been  just  as  effective  and 
just  as  reasonable  for  the  statute  to  have  said,  "devoted  to  the  interests 
of  humanity,"  or,  "devoted  to  the  development  of  civilization,"  or,  "devoted 
to  human  intellectual  activity." 

The  prime  defect  in  the  statute  is,  then,  that  it  defines  not  by  qualities 
but  by  purposes,  and  the  purpose  described  is  so  broad  as  to  include  every- 
thing and  exclude  nothing. 


THE  DREYFUS  CASE  OF  AMERICA  149 

With  the  exception  of  a  few  instances  where  the  publication  has  been 
exchided  because  the  information  was  deemed  not  to  be  public,  no  periodi- 
cal has  ever  been  classified  by  the  application  of  such  tests.  Any  attempt 
to  apply  them  generally  would  simply  end  in  a  press  censorship.     *     *     * 

So  with  respect  to  tlie  prohibition  against  publications  designed  primar- 
ily for  advertising  purposes,  for  free  circulation,  or  for  circulation  at  nom- 
inal rates,  we  have  here  again  an  attempt  to  define  by  objects  and  pur- 
poses. What  was  in  the  mind  of  the  author  is  clear  enough.  He  wishes 
to  prohibit  the  misuse  of  the  privileges  for  commercial  ends,  as  distin- 
guished from  the  devotion  to  literature,  science  and  the  rest.  But  the  pro- 
vision expresses  a  purpose,  not  a  rule. 

Dealt  with  from  tlie  standpoint  of  design,  advertising  becomes  a  word 
too  wide  for  practical  application.  Either  every  periodical  is  designed  for 
advertising  purposes,  or  no  periodical  is  so  designed.  This  is  neatly  put 
in  an  article  bv  Mr.  James  H.  Collins,  an  advertising  expert,  in  the  Issue 
of   Printer's  Iiik  for  July  25,  1906   (Vol.   LVI.,   No.'^4),  thus: 

"There  is  still  an  illusion  to  the  effect  that  a  magazine  is  a  periodical  in 
which  advertising  is  incidental.  But  we  don't  look  at  it  in  that  way.  A 
magazine  is  simply  a  device  to  induce  people  to  read  advertising.  It  is  a 
large  booklet  ^ith  two  departments — entertainment  and  business.  The  en- 
tertainment department  finds  stories,  pictures,  verses,  etc.,  to  interest  the 
public.     The  business  department  makes  the  money." 

But  let  us  assume  that  the  term  "primary  design  for  advertising  pur- 
poses" could  be  assigned  a  reasonably  definite  and  precise  meaning:  still 
a  more  absurd  way  of  preventing  the  commercializing  of  the  press  could 
hardly  be  imagined  than  to  cast  upon  an  executive  department,  the  de- 
termination in  each  individual  case,  of  the  mixed  question  of  fact  and  law 
involved  in  an  inquiry  into  the  primary  design  of  the  publication. 

How  can  an  executive  department,  whose  business  it  is  to  transport  from 
day  to  day,  week  to  week,  and  month  to  month,  great  masses  of  physical 
objects,  conduct,  as  it  goes  along,  a  judicial  inquiry  into  the  primarj^  de- 
sign behind  their  publication?  Since  primary  design  means  principal  or 
chief  design,  the  inquiry  is  a  continuing  one,  and  accompanies  every  issue. 
A  publication  not  designed  for  advertising  this  month  may  become  so  next 
month. 

Under  the  head  of  "Methods  of  Administration"  occurs  the  fol- 
lowing paragraph: 

The  Commission  concurs  in  the  view  that  it  is  highly  essential  that  the 
administration  of  these  classification  statutes  should  be  uniform  and  stable. 
Such  vast  amounts  of  capital  are  now  invested  in  the  publishing  business 
that  mere  uncertainty  as  to  the  postal  privilege  of  an  established  periodical 
publication  may  depress  the  value  of  the  property  to  a  ruinous  extent.  So 
long  as  a  great  disparity  continues  between  the  third-class  rate  for  ordi- 
nary printed  matter  and  the  second-class  rate  for  periodicals,  the  relega- 
tion of  a  publication  fi-om  one  class  to  the  other  amounts  to  practical  anni- 
hilation. 

The  present  third  assistant  postmaster-general,  whose  energetic  enforce- 
ment of  the  existing  statutes  deserves  the  highest  commendation  from  an  ad- 
ministrative point  of  view,  was  the  first  at  the  Commission's  hearings  to  in- 
sist upon  the  great  possibilities  of  injury  inherent  in  the  present  system, 
and  the  fact  that  changes  in  the  executive  might  either  undo  all  that  had 
been  accomplished  by  way  of  reform  or,  on  the  contrary,  by  even  more 
drastic  exercise  of  the  discretion  lodged  in  the  Postoffice  Department  inflict 
incalculable  injury  upon  the  publishing  business. 

The  Commission,  therefore,  recommends  that  the  administration  of  the 
law  as  to  second-class  privileges  be  vested  in  a  special  tribunal  with  power 
to  review  the  decisions  of  the  postmaster-general.  Such  a  commission  was 
asked  for  by  the  publishers  with  practical  unanimity,  and  was  indeed  orig- 
inally recommended  by  the  third  assistant  postmaster-general. 


150  THE  SIEGE  OF  UNIVERSITY  CITY 

The  net  result  of  tlie  labors  of  this  Commission,  as  will  be  seen 
hereafter,  was  the  formulation  of  a  law  designed  to  codify  and 
amend  all  previous  postal  legislation  in  such  fashion  as  to  clarify 
the  law  and  free  it  from  all  vagueness  and  ambiguity.  The  pro- 
posed measure,  however,  did  not  meet  with  the  approval  of  Congress. 
The  law  of  1879,  although  confessedly  inadequate  and  incapable  of 
righteous  administration,  still  lies  at  the  basis  of  the  periodical  pub- 
lishing industry  of  America.  That  industry  is  still  regulated  by 
the  traditional  narrow  construction  policy  of  the  Department,  sub- 
ject to  such  modifications  as  the  personal  views  of  new  postmasters- 
general  and  third  assistants  may  chooce  to  enforce  from  time  to 
time. 

THE   LEWIS   CASE,  TYPICAL. 

The  Siege  of  University  City  is  of  abiding  interest  as  in  itself 
a  complete  illustration  of  the  dangers  implicit  in  this  vicious  law. 
The  sequel  will  show  the  actual  realization  of  all  the  evils  above 
described.  We  have  seen  how  a  typical  mail  order  journal,  the 
Winner,  looked  to  Lewis  from  his  standpoint  as  publisher.  We 
have  also  seen  how  such  a  periodical  was  viewed  by  Madden  as 
third  assistant  postmaster-general.  We  are  now  in  a  position  to 
follow  understandingly  the  series  of  events  whereby  Lewis  slipped 
into  the  cogs  of  the  departmental  machine  and  by  his  vigorous  pro- 
tests started  the  controversy  between  himself  and  the  Government. 


r 


^*%^, 


t-i: 


CHAPTER  VI. 

LEWIS  SLIPS  INTO  THE  COGS. 

Maddrn  Probes  the  Winner — The  First  Citation — Lewis'  Atti- 
tude Towards  Madden's  Reform — Change  of  Name  to 
"Woman's  Magazine"' — The  Travers  Shorthand  Epi- 
sode— Was  Lewis  a  Bribe-Giver? — Bristow's  Report  on 
Lewis — Baumhoff's  Story — Enter  Vickery  and  Fulton. 

The  seven  years'  war  that  has  raged  during  the  siege  of  Univer- 
sity City  may  have  had  its  origin,  to  borrow  one  of  Lewis'  happy 
figures  of  speech,  like  a  prairie  fire.  Somebody  carelessly  drops 
a  match.  From  this  tiny  point  of  flame  springs  a  conflagration  that 
swallows  village  and  farm-stead  and  takes  grim  toll  of  life  and 
property  as  it  sweeps  on  its  devastating  course.  Who  then  dropped 
the  first  careless  match?  When,  where,  and  by  whom  was  the  first 
spark  kindled  that  later  filled  the  whole  heavens  of  the  postal  world 
with  lurid  blaze?  The  debate  on  this  crucial  point  of  the  combat 
still  rages  hotly.  Inspector  Stice,  as  chief  witness  for  the  Govern- 
ment at  the  Ashbrook  Hearings,  tells  one  story.  Lewis  and  Nichols 
tell  another.  A  third  solution  is  suggested  by  an  outside  witness, 
F.  W.  BaumhofF,  a  former  postmaster  at  St.  Louis.  We  have  now 
to  lay  each  ot  these  stories  before  the  reader. 

The  occasion  of  the  first  real  controversy  between  Lewis  and  the 
Postoflice  Departmgnt  was  the  attempt  of  General  Madden  to  apply 
his  reform  policy  to  the  W^inner.  For  Lewis  sought  to  forestall 
the  withdrawal  of  his  second-class  entry  by  conforming  to  the  new 
requirements.  To  signalize  this  change  of  policy  he  altered  the 
name  of  his  publication  from  The  Winner  to  the  Woman's  ]\Iaga- 
zine.  This  step  gave  the  Department  a  technical  advantage  over 
him  which  afterwards  opened  a  fatal  breach  in  his  defenses.  The 
fight  started  somewhere  in  the  midst  of  these  events.  Let  us  see 
what  took  place. 

MADDEN   probes  THE   WINNER. 

The  appointment  of  ^Madden  as  third  assistant,  it  will  be  remem- 
bered, took  place  July  1,  1899,  three  months  after  the  first  issue 
of  the  Winner.  The  first  so-called  reform  regulations  were  not 
issued  until  the  following  year,  namely,  under  date  of  July  17, 
1901.  On  that  very  day  an  inquiry  into  the  status  of  the  mail  order 
journals  was  instituted.  The  postmaster  at  St.  Louis  received  the 
following  communication  from  the  third  assistant: 

Sir:  You  are  directed  to  require  the  publishers  of  the  Winner  to  make 
on  inclosed  form.  No.  3501,  the  sworn  statement  contemplated  by  para- 

153 


154  THE  SIEGE  OF  UNIVERSITY  CITY 

graph  10,  section  295,  Postal  Laws  and  Regulations,  showing  the  status  of 
the  publication  at  the  present  time. 

This  communication  was  transmitted  by  the  postmaster  under 
date  of  July  19,  and  was  acknowledged  by  Lewis,  as  manager  of  the 
Winner,  the  following  day.  He  submitted  a  sworn  statement.  The 
Mail  Order  Publishing  Company  was  said  to  exist  for  the  sole  pur- 
pose of  publishing  the  Winner  as  a  monthly  magazine.  The  Win- 
ner was  said  not  to  represent  any  trade,  business  or  organization, 
but  to  be  a  family  magazine  exclusively.  The  editors  were  said  to 
have  no  pecuniary  interest  in  any  enterprise  represented  in  its  col- 
umns. The  immbcr  of  copies  printed  was  represented  as  between 
four  hundred  thousand  and  live  hundred  thousand  of  each  issue.  A 
legitimate  list  of  three  hundred  and  seventy-six  thousand,  two  hun- 
dred yearly  paid-in-advance  subscribers  was  claimed,  together  with 
about  one  hundred  thousand  short  term  subscriptions.  The  sub- 
scription price  was  stated  as  twenty-five  cents  per  annum.  The  aver- 
age number  of  sample  copies  of  each  issue  was  said  to  be  from 
twenty-five  thousand  to  seventy-five  thousand.  Lewis  in  his  letter 
of  transmittal  says : 

We  do  not  oifer  premiums  of  any  nature  whatever,  nor  have  we  done 
so  for  the  past  five  or  six  months.  We  rely  entirely  on  the  literary  con- 
tents of  our  paper  to  secure  and  hold  our  subscriptions.  The  editorial 
contents  of  the  Winner  are  compiled  and  written  especially  for  the  class 
of  people  who  get  it.  The  paper  might  not  appeal  to  persons  of  a  higher 
education;  yet  it  is  exactly  suited  to  the  people  who  pay  for  it,  or  they 
would  not  subscribe  for  it  at  any  price. 

THE    FIRST    CITATION. 

A  few  months  later,  Lewis  was  rudely  awakened  to  the  fact  that 
the  future  of  his  enterprise  might  be  dependent  upon  the  determi- 
nation of  a  will  other  than  his  own.  The  following  letter  as  of 
April  2,  1902^  was  sent  from  the  office  of  the  third  assistant,  ad- 
dressed to  the  postmaster  at  .St.  Louis : 

Sir:  Promptly  on  receipt  of  this  communication  you  will  inform  the 
Mail  Order  Publishing  Company,  publishers  of  the  Winner  Magazine,  that 
the  Department  will  afford  them  an  opportunity  to  show  cause  why  this 
publication  should  not  be  denied  the  second-class  rates  of  postage,  on  the 
grounds : 

(1)  That  the  list  of  subscribers  is  not  legitimate,  as  required  by  law. 

(2)  That  it  is  primarily  designed  for  advertising  purposes  and  within 
the  prohll)ition  of  the  statutes. 

(3)  That  it  is  circulated  at  a  nominal  rate  and  within  the  prohibition 
of  the  statutes. 

(4)  That  its  circulation  is  not  founded  on  its  merits  as  a  news  or 
literary  journal. 

The  hearing  may  take  place  at  your  office  or  at  the  Department,  pref- 
erably the  former.  Arguments,  statements,  or  evidence  submitted  by 
the  publisher  must  be  in  writing,  and  must  reach  the  Department  not 
later  than  April  16,  1902.  It  is  not  necessary  for  a  publisher  to  appear 
at  the  Department,  but  if  he  desires  to  do  so  he  should  arrange  for  a 
date  when  it  will  l)e  convenient  to  hear  him. 

No  action  appears  to  have  been  taken  by  the  Department  prior 
to  this  citation.     The  investigation  of  the  Winner  by  Postoffice  In- 


THE  DREYFUS  CASE  OF  AMERICA  165 

specters  Harrison  and  Holden  referred  to  by  Howard  Nichols  had, 
however,  been  made  during  this  interval.  This  citation  appears  to 
have  been  caused   by   their   report. 

Lewis,  meantime,  as  will  appear  in  full  hereafter,  had  incorpo- 
rated an  enterprise  known  as  the  Controller  Company  of  America 
for  the  manufacture  and  sale  of  a  pay  station  device  as  an  attach- 
ment to  private  telephones.  This  concern  had  entered  into  a  con- 
tract with  the  Maryland  Telephone  Company  of  Baltimore.  Har- 
rison J.  Barrett,  formerly,  as  will  be  remembered,  an  assistant 
attorney  in  the  Postoffice  Department,  had  severed  his  connection 
with  the  service  and  become  a  member  of  a  private  law  firm  at  that 
city.  Lewis  had  retained  Barrett  as  counsel  for  the  Controller 
Company  of  America. 

On  receipt  of  the  citation  of  April  2,  1902,  his  thoughts  turned 
to  Barrett  on  account  of  the  latter's  previous  experience  and  ac- 
quaintance in  the  postal  service.  He  immediately  wrote  Barrett  a 
letter  requesting  his  advice,  and  transmitting  a  draft  of  the  re- 
sponse which  he  proposed  to  submit  to  the  third  assistant.  This 
letter  and  response,  which  was  returned  by  Barrett  with  his 
approval,  afford  conclusive  evidence  of  Lewis'  mental  attitude  at 
that  time  with  regard  to  his  future  policy  as  a  publisher. 

lewis'  attitude  towards  reform. 

During  the  interval  between  the  citation  of  April  2,  1902,  and 
the  month  of  August  of  that  year  Lewis  took  up  with  other  mail 
order  publishers  the  subject  of  the  reform  policy  of  General  Mad- 
den. He  sought  their  opinions  and  advice  with  a  view  to  deter- 
mining what  his  own  attitude  and  policy  as  a  publisher  ought  to  be. 
Many  of  his  competitors  elected  to  fight  the  third  assistant.  They 
met  his  citations  with  injunction  proceedings  brought  in  the  courts 
of  the  District  of  Columbia,  which  have  jurisdiction  in  such  cases 
over  the  administrative  officers  of  Government.  The  effect  was, 
as  we  shall  see,  to  bring  the  reform  policy  to  a  halt.  The  then 
existing  posture  of  affairs  is  thus  described  by  Madden: 

While  this  reform  was  under  way  we  dealt  with  the  publications  class 
by  class.  Our  object  was  to  put  all  people  on  a  level.  Finally,  we  got  to 
the  mail  order  publications.  Tiiis  practically  included  all  the  magazines. 
About  that  time  there  were  some  hearings  given.  Among  others  heard 
were  five  publications  of  Governor  Hill  at  Augusta,  Maine,  a  large  publi- 
cation centre,  and  five  of  the  Gannett  publications.  After  the  hearings 
the  publishers  went  into  the  district  court  and  secured  injunctions  restrain- 
ing the  postmaster-general  and  third  assistant  from  talcing  any  action  until 
the  matter  should  be  heard.  There  were  in  all  at  one  time  nineteen  publi- 
cations thus  protected. 

Lewis  was  advised  and  solicited  by  his  brother  publishers  to  join 
with  them  in  these  proceedings.  On  the  advice  of  Barrett,  and 
after  mature  consideration,  he  resolved  not  to  .antagonize  the  author- 
ities at  Washington,  but  rather  to  conform  to  the  evident  wishes  of 
the  Department.  A  study  of  his  correspondence  of  that  period 
discloses  two  principal  reasons  for  this  course  of  action.     Lewis, 


166  THE  SIEGE  OF  UNIVERSITY  CITY 

in  the  first  place,  expressed  himself  at  that  time  in  his  correspond- 
ence with  Barrett  and  in  his  personal  letters  to  the  thii'd  assistant 
as  wholly  in  sympathy  witli  the  policy  of"  reform.  For,  as  publisher 
of  the  Winner,  Lewis  was  himself  a  reformer.  He  made  the  fol- 
lowing statement  to  the  Ashbrook  Committee: 

I  believe  myself  that  the  Woman's  Magazine  did  more  to  reform  abuses 
in  the  mail  order  field  than  all  the  laws  ever  passed.  We  brought  our 
competitors  up  against  a  new  kind  of  competition. 

In  the  advertising  field,  the  fact  that  we  guaranteed  our  advertising 
and  would  stand  good  for  any  loss  to  the  subscriber,  raised  the  whole 
character  of  the  mail  order  journals.  We  drove  out  the  illegitimate  paper 
which  carried  any  kind  of  mail  order  advertising  that  could  be  gotten 
through  the  mails.  I  remember  when  I  first  published  an  absolute  guar- 
antee, a  leading  mail  order  publisher  came  all  the  way  from  New  York 
to  see  me  and  protest  against  our  advertising  polic}^  He  said,  in  effect, 
that  it  would  ruin  the  mail  order  publishing  business.  I  received  a  great 
many  similar  protests  from  other  publishers  and  mail  order  advertisers,  by 
letter.  We  stuck  to  that  policy,  however,  and  the  effect  was  to  compel  our 
competitors  to  clean  up  their  advertising  columns. 

In  the  circulation  field,  we  introduced  the  competition  of  the  paid-in- 
advance  subscriber,  who  paid  for  the  paper  because  he  wanted  it.  The 
effect  was  to  drive  out  the  illegitimate  papers,  which  did  not  make  any 
pretense  of  having  paid  subscribers,  but  got  the  names  in  any  way  they 
could,  and  then  kept  them  on  their  lists  forever.  The  results  to  our 
advertisers  proved  that  unpaid  circulation  was  relatively  unprofitable. 
Previous  to  that  time,  the  average  mail  order  paper  did  not  figure  on  re- 
newable subscriptions.  If  they  could  once  get  a  person  to  subscribe,  they 
regarded  that  name  as  a  permanent  fixture  on  their  lists.  The  effect  on 
the  subscriber  in  the  rural  districts,  where  the  mail  order  papers  chiefly 
circulated,  was  to  cause  the  belief  that  the  subscriber  would  not  have  to 
renew,  but  that  he  would  get  the  paper  without  further  payment  until  he 
died.  It  became  practically  impossible  to  renew  subscriptions  by  simply 
sending  out  a  notice.  All  this  increased  the  cost  of  securing  renewals  and 
correspondingly  reduced  the   revenue  of  legitimate  publications. 

We  came  into  the  mail  order  field  at  this  time  with  a  periodical  which 
was  much  better  in  every  way.  We  used  better  paper  stock,  ran  our 
presses  more  slowly,  and  aimed  at  a  higher  level  of  mechanical  excellence. 
We  guaranteed  our  subscribers  against  loss  through  advertisements.  Sub- 
scription revenue,  therefore,  became  important.  AVe  sought  the  paid  sub- 
scriber who  would  renew  in  cash.  We  spent  very  large  sums  of  money  to 
secure  that  class  of  subscribers,  and  were,  T  believe,  the  only  publication 
in  existence  at  that  time,  in  our  competitive  field,  which  was  making  any 
attempt  to  expire  and  renew  its  subscriptions  in  a  legitimate  manner.  We 
went  to  means  that,  so  far  as  our  competitors  were  concerned,  were  unusual 
and  extraordinary,  to  cut  off  our  subscribers  at  the  end  of  the  paid-in- 
advance  subscription  period,  and  to  secure  renewals. 

General  Madden  was  the  first  third  assistant  to  attempt  to  reform'  these 
so-called  abuses;  that  is,  to  establish  and  codify  rulings  to  govern  those 
matters.  They  had  never  been  ruled  upon  before.  This  brought  about 
a  very  bitter  controversy  between  the  mail  order  publishers  and  the  third 
assistant.  We  were  urged  by  other  publishers  to  join  in  their  injunction 
proceedings,  but  we  did  not  join.  We  stood  out  by  ourselves.  We 
announced  to  the  third  assistant  and  to  the  publishers,  and  it  was  well 
known  at  the  time,  that  we  were  in  sympathy  with  the  reforms  that  were 
being  undertaken. 

Lewis,  in  the  second  place,  believed  that  the  Department  being, 
as  he  thought,,  in  the  right,  was  bound  to  win  in  the  long  run,  and 


Wrawing  room,  Lewis'  residence  in   University  City     ^Entrance  hall  and  living  room 

Observe  that  a  glimpse  of  the  drawing  room  is  seen  adjacent  to  the  living  room  upon 
the  right  ♦  r 


THE  DREYFUS  CASE  OF  AMERICA  169 

that  sooner  or  later  the  new  rulings  would  become  effective.  He, 
therefore,  saw  the  necessity  of  at  once  shaping  his  business  policy 
in  such  a  way  as  to  be  ready  to  comply  when  that  time  should  come. 
So  he  resolved  on  a  general  housecleaning,  and  determined  to  sig- 
nalize the  renovation  of  the  Winner  by  adopting  a  new  name  more 
in  keeping  with  the  ideals  of  the  improved  publication  which  he  had 
in  view. 

CHANGE    OP    NAME    TO    WOMAN^S    MAGAZINE. 

We  must  now  trace  the  steps  taken  to  comply  with  the  Postal 
Laws  and  Regulations.  While  somewhat  technical,  these  details 
serve  to  illustrate  the  usual  customs  of  the  Department.  They  also 
have  a  vital  bearing  upon  what  follows. 

About  the  first  of  August,  1002,  Lewis  appears  to  have  asked  the 
postmaster  at  St.  Louis  to  advise  him  of  the  decision  of  the  Depart- 
m.ent  on  his  response  to  the  citation  of  April  2.  The  postmaster, 
on  transmitting  this  request  to  Washington,  was  advised,  under  date 
of  August  4,  by  H.  M.  Bacon,  acting  for  the  third  assistant,  as 
follows: 

Sir:  Referring  to  previous  correspondence  and  the  notice  to  show 
cause  in  the  case  of  the  Winner  Magazine,  published  by  E.  G.  Lewis,  I  have 
to  inform  you  that,  owing  to  the  delay  in  securing  a  decision  on  cases  now 
before  the  Supreme  Court  of  the  District  of  Columbia,  which  involve  like 
questions,  the  Department  has  determined  to  take  no  further  action  on  this 
case  until  the  court  has  rendered  its  decision.  This  is  looked  for  early  in 
the  Fall  term.    You  are  directed  to  notify  the  publisher  of  this  decision. 

Lewis  next  consulted  Barrett  as  to  the  steps  necessary  to  be  taken 
in  connection  with  the  change  of  name.  He  was  told  that  such  a 
change  was  held  by  the  Department  to  be  equivalent  to  the  end  of 
an  old  periodical  and  the  beginning  of  a  new  one.  A  formal  appli- 
cation for  the  entry  of  the  Woman's  Magazine  to  the  second  class 
would,  therefore,  be  required. 

The  only  exception  made  by  the  Department  in  case  of  the  re- 
entry of  an  old  publication  under  a  new  name,  as  against  an  entirely 
new  periodical,  was  a  waiver  of  the  deposit  of  postage  at  the  third- 
class  rate  pending  the  final  decision.  Lewis  instructed  Barrett  to 
advise  the  Department  of  the  proposed  change,  and  request  the 
courtesy  of  the  customary  waiver.  Barrett  therefore  dispatched  a 
letter  to  this  effect  from  his  law  office  at  Baltimore  to  the  third 
£!ssistant,  under  date  of  August  14,  1902,  when  the  latter  was  on  a 
vacation  at  Atlantic  City.  He  also  addressed  a  similar  letter  to 
W.  H.  Landvoight  of  the  Classification  Bureau  of  the  Postoffice 
Department.     From  this  the  following  paragraph  is  taken: 

I  wrote  General  Madden  in  regard  to  issue  of  a  temporary  permit, 
without  deposit,  in  connection  with  application  for  re-entry  of  the  Winner, 
St.  Louis,  Mo.,  by  reason  of  change  of  name  to  the  Woman's  Magazine. 
As  I  advised  you,  he  told  me  that  a  temporary  permit  would  be  authorized 
without  deposit,  and  the  application  held  for  the  present.  If  you  hear 
from  him,  and  authority  is  given  to  the  postmaster  at  St.  Louis,  will  you 
please  advise  me?  If  you  do  not  hear  from  him  within  the  next  few  days, 
will  you  let  me  know,  so  that  I  can  endeavor  to  unclog  the  wheels  of 
government  ? 


160  THE  SIEGE  OF  UNIVERSITY  CITY 

The  follov/ing  pencil  memorandum,  under  date  of  August  20, 
1902,  was  written  by  Landvoight,  and  attached  to  tliis  correspond- 
ence in  tlie  files  of  the  Department: 

Mr.  Fettis:  Under  no  circumstances  must  any  action  be  taken  in  the 
case  of  the  Woman's  Magazine  until  General  Madden  returns.  He  wants 
to  handle  the  case  personally.  Called  it  up  September  8.  Pass  this  word 
all  along  the  line  to  make  certain  that  no  one  errs. 

Another  longhand  memorandum  of  the  same  date,  signed  by  C. 
G.  Thompson,  is  also  attached  to  the  same  fde: 

Authorize  postmaster  to  receive  the  Woman's  Magazine  (formerly 
Winner)  at  the  regular  second-class  rates,  without  a  deposit,  pending  deci- 
sion of  entry. 

The  above  was  dictated  by  General  Madden  at  Atlantic  City,  N.  J., 
August  18,  1902. 

As  to  the  above  memorandum.  General  Madden  makes  the  fol- 
lowing explanation: 

Mr.  Thompson  was  at  that  time  a  clerk  in  my  immediate  office.  I  was 
spending  my  vacation  in  Atlantic  City,  and,  as  I  recall  it,  he  came  over 
with  a  package  of  papers  on  which  it  was  necessary  to  have  my  decision, 
in  various  cases;  and  when  he  reached  this  case,  he  probably  made  that 
memorandum  as  my  conclusion.     That  is  all  there  is  to  that. 

H.  M.  Bacon,  under  date  of  August  25,  acting  as  third  assistant 
during  the  absence  of  General  Madden,  thereupon  instructed  the 
postmaster  at  St.  Louis  as  follows: 

Sir:  The  Department  has  been  informed  that  the  name  of  The  Winner 
will  be  changed  to  "The  Woman's  Magazine",  and  an  application  will  be 
made  through  your  office  for  its  admission  as  second-class  matter.  A 
request  has  been  made  that  the  deposit  provided  in  section  441,  Postal 
Laws  and  Regulations,  be  waived  in  this  case. 

Inasmuch  as  the  W^inner  is  entered  as  second-class  matter,  if  you  are 
satisfied  that  it  would  be  perfectly  proper  to  do  so,  you  may  waive  the 
money  deposit  required  by  section  441  of  the  Postal  Laws  and  Regulations 
to  secure  payment  of  the  third-class  rate  of  postage.     *     »     * 

The  day  following  Bacon  instructed  the  postmaster  at  St.  Louis, 
"in  view  of  the  fact  that  the  Winner  is  no  longer  in  existence,  and 
is  superseded  by  the  Woman's  Magazine,"  to  request  the  publisher 
to  deliver  to  him  "the  certificate  of  the  Winner  as  second-class  mat- 
ter, so  that  it  may  be  forwarded  to  the  Department  for  filing  with 
the  case  of  the  Winner." 

F.  W.  BaumhofF,  then  postmaster  at  St.  Louis,  by  his  assistant, 
replied,  under  date  of  October  3,  in  substance  as  follows: 

I  beg  to  state  that  several  personal  calls  were  made  at  the  office  of  the 
publisher  and  we  are  in  receipt  of  a  communication  from  him,  under  date 
of  tiie  1st  inst.,  regretting  his  inability  to  locate  the  original  certificate. 
As  the  office  of  publication  was  moved  to  its  present  location  about  two 
years  ago,  it  is  probable  that  the  certificate  was  misplaced.  Mr.  Lewis,  the 
publisher,  further  stated  that  in  the  event  of  the  certificate  being  found 
later,  he  will  gladly  deliver  it  to  me. 

General  Madden,  having  by  this  time  returned  to  his  post,  re- 
sponded to  this  communication,  under  date  of  October  9,  as  fol- 
lows : 

In  view  of  the  statement  in  your  letter  of  the  3d  instant,  that  the  pub- 


THE  DREYFUS  CASE  OF  AMERICA  161 

lisher  of  the  Winner  is  unable  to  find  the  certificate  of  entry  of  that  publi- 
cation as  second-class  matter,  the  Department  will  not  press  its  request  for 
the  surrender  of  that  certificate. 

Inspector  Stice,  when  asked  by  the  Ashbrook  Committee  why  the 
above  file  of  correspondence  was  read  into  the  record  as  evidence 
for  the  Government,  made  the  following  reply: 

The  entire  file  is  put  in  to  show  the  conditions  that  existed  in  the  ofiQce 
of  the  third  assistant  postmaster-general  at  that  time.  There  was  an 
application  pending  from  the  Winner  Magazine  at  the  beginning.  The  third 
assistant  postmaster-general  had  taken  the  position  that  he  would  not 
take  any  action  at  that  time  until  these  injunction  cases  were  disposed  of. 
While  the  citation  was  pending,  the  name  was  changed,  and  the  same  posi- 
tion was  maintained  by  the  third  assistant  postmaster-general.  This  brings 
us  up  to  the  time  when  the  cases  were  actually  taken  up  for  the  investi- 
gation by  reason  of  the  non-action  of  the  third  assistant  postmaster-gen- 
eral's office,  or  as  one  of  the  reasons. 

The  nonaction  of  the  third  assistant  is  further  explained  by  the 

following  letter  (also  introduced  by  Stice),  under  date  of  October 

24,  1902,  to  the  postmaster  at  Chicago: 

Sir:  The  Department  is  in  receipt  of  your  communication  of  the  9th 
instant,  in  which  you  ask  whether  the  subscription  price  charged  for  the 
Woman's  Magazine,  of  St.  Louis,  Mo.,  is  not  "nominal  under  the  Postal 
Laws  and  Regulations."  In  answer,  you  are  informed  that  there  are  now 
before  the  Supreme  Court  of  the  District  of  Columbia  a  number  of  cases 
in  which  practically  the  whole  of  the  second-class  law  is  involved.  The 
Department  has,  therefore,  determined  to  take  no  action  on  such  cases  as 
those  of  the  Woman's  Magazine  *  *  *  until  a  decision  has  been  reached 
by  the  courts. 

The  significance  of  all  this  will  be  found  in  due  course  in  a  let- 
ter over  the  signature  of  George  B.  Cortelyou,  Postmaster-General, 
under  date  of  March  4,  1907,  fve  years  later,  purporting  to  be  a 
denial  of  this  application.  During  all  these  years,  the  Woman's 
Magazine,  upon  the  hair-splitting  technical  theory  of  the  Depart- 
ment, was  not  actually  admitted  to  the  second  class.  It  was  merely 
accepted  by  the  Government  on  tolerance,  by  virtue  of  a  temporary 
permit  and  waiver  of  deposit  of  the  third-class  postage.  This  fine- 
spun theory  was  sustained  in  court.  But  Lewis,  meanwhile,  had  been 
officially  notified  by  the  postmaster  at  St.  Louis  to  print  at  the  mast- 
head of  the  Winner  the  following  legend:  "Entered  at  Postoffice, 
St.  Louis,  as  second-class  matter,  December,  1899."  F.  W.  Baum- 
hoff  was  then  postmaster.  He  afterwards  testified  before  the  Ash- 
brook  Committee   in   substance   as   follows: 

The  date  of  December,  1899,  in  that  memorandum  of  entry  was  undoubt- 
edly the  date  of  the  first  entry  of  the  Winner.  The  permanency  of  the 
entry  as  second-class  matter  of  the  Woman's  Magazine  was  taken  for 
granted.  The  incident  was  understood  to  be  closed  to  the  satisfaction  of  the 
Department.  The  only  drawback  was  that  the  Lewis  Publishing  Company 
could  not  find  the  temporary  permit  for  the  Winner  to  offer  in  exchange 
for  a  new  one.  This  also  occurred  in  a  number  of  previous  cases  during 
my  administration,  and  had  been  passed  upon  in  a  similar  way.  The  per- 
mit gi%'en  to  the  publisher  is  not  considered  of  much  value.  The  records 
at  Washington  would  show  that  a  great  many  publications  are  in  the  same 
predicament.    I  remember  distinctly  that  about  a  year  later,  after  writing 


162  THE  SIEGE  OF  UNIVERSITY  CITY 

several  times  on  the  matter,  I  received  instructions  to  notify  the  publisher 
to  continue.  The  notice  read  something  like  this:  "By  direction  of  the 
Postoffice  Department  you  are  instructed  to  continue  mailing."  I,  there- 
lore,  notified  the  publisher  to  that  effect. 

Lewis,  on  receipt  of  formal  notification  from  the  postmaster  to 
print  a  memorandum  of  second-class  entry  at  the  masthead  of  the 
Woman's  JNIagazine,  naturally  concluded  that  his  application  was 
accepted.  Nor  did  he  get  any  inkling  to  the  contrary  until  the  first 
attack  was  made  upon  the  Woman's  Magazine  in  1905  under  cir- 
cumstances which  the  sequel  will  show. 

THE    TRAVERS    SHORTHAND    EPISODE. 

A  few  days  after  the  application  for  entry  of  the  Woman's  Maga- 
zine was  received  at  the  Department,  W.  H.  Landvoight,  the  super- 
intendent of  the  Classification  Division,  forwarded  a  copy  of  the 
first  issue  to  General  Madden,  then  on  vacation,  as  will  be  remem- 
bered, at  the  Hotel  Ravenwood,  Atlantic  City,  with  this  memoran- 
dum of  transmittal: 

My  dear  General:  The  application  for  the  entry  of  the  Woman's  Maga- 
zine (formerly  the  Winner)  as  second-class  matter  has  been  received,  and 
with  it  the  inclosed  copy  of  the  new  publication.  This  I  send  you  for  the 
purpose  of  inviting  your  special  attention  to  the  department  of  shorthand, 
on  page  7.  Please  return  the  magazine  in  the  inclosed  envelope  after  it 
has  served  the  purpose  of  its  reference  to  you. 

This  was  the  first  of  a  new  series  of  lessons  on  shorthand  to 
appear  as  a  department  of  the  Woman's  ^Magazine,  under  circum- 
stances which  will  be  explained  in  the  following  communication: 
E.  G.  Lewis, 

The  Winner  Magazine,  St.  Louis,  Mo. 

Dear  Mr.  Lewis:  I  was  in  Washington  week  before  last,  and  had  a 
personal  talk  with  the  private  secretary  of  Third  Assistant  Postmaster- 
General  Madden.  The  name  of  Mr.  Madden's  secretary  is  Arthur  M. 
Travers.  I  have  known  him  for  many  years,  and  known  him  intimately. 
We  were  both  young  men  in  Detroit  together.  When  I  called  on  him 
several  weeks  ago  I  asked  him  to  do  all  that  he  could  for  you  if  any  con- 
troversy came  up  in  the  Department  regarding  your  paper.  He  stated 
that  he  had  called  on  you  in  St.  Louis,  and  that  he  liked  you  very  much. 
AVhen  Mr.  Travers  and  I  were  in  Detroit  together  he  was  a  very  expert 
stenographer,  and  gave  lessons  to  a  number  of  young  men  in  that  com- 
munity. 

I  asked  him  when  I  was  in  Washintgon,  week  before  last,  if  it  would 
not  be  possible  for  him  to  conduct  such  a  department  in  your  magazine, 
say  a  page  a  month.  He  answered  that  he  felt  he  could  do  this  very 
satisfactorily,  and  to  the  material  profit  of  any  publisher  who  would  use  his 
articles  on  how  to  become   a  shorthand  writer. 

I  believe  that  such  a  department  would  be  profitable  to  your  magazine 
and  would  increase  its  merit  as  a  publication  for  the  dissemination  of 
knowledge.  I  told  Mr.  Travers  that  I  intended  to  take  up  the  matter  with 
you,  and  if  it  was  of  any  interest  to  you  that  you  would  write  him  and 
get  his  terms  for  conducting  such  a  department  in  your  paper. 

Personally,  I  am  interested  in  the  matter,  both  from  the  standpoint  of 
yourself  and  Mr.  Travers.  You  are  ])oth  my  friends,  and  I  believe  you 
could   both  help  each  otlier.     With  kind   regards,  I   am. 

Sincerely  yours, 

'F.  \V.  KELLOGG, 
General    Manager    The    Kansas    City    World. 


THE  DREYFOS  CASE  OF  AMERICA  163 

In  pursuance  of  this  project,  a  deal  was  made  whereby  Travers 
furnished  a  series  of  six  articles,  running  from  the  August,  1902, 
to  January,  1903,  issues  of  the  Woman's  Magazine.  For  this  he 
received  a  total  sum  of  two  hundred  and  seventy  dollars.  This  cor- 
respondence was  introduced  into  the  record  of  the  Ashbrook  Hear- 
ings by  Inspector  Stice  to  show  that  Lewis  strove  to  interest  in  his 
behalf  employees  of  the  Postoffice  Department  in  bureaus  where 
he  either  had  matters  pending  or  expected  to  have.  The  employ- 
ment of  Travers  was  construed  as  an  act  of  bribery.  Attempts 
were  made  to  show  that  Lewis  profited  by  Travers'  influence. 

Lewis  testifies  that  the  recommendation  of  Travers  by  Kellogg 
came  to  him  out  of  the  blue;  that  the  articles  submitted  by  Travers 
were  superior  to  those  which  he  had  previously  been  running;  that 
the  price  paid  was  no  more  than  the  articles  were  worth ;  that  Trav- 
ers was  also  contributing  articles  to  other  periodicals ;  and  that  he 
was  conscious  of  no  necessity  for  bribing  Travers,  for  he  had  no 
reason  to  suppose  that  any  unfavorable  action  against  him  was  con- 
templated. The  reader  must,  upon  the  facts  here  stated,  and  others 
which  are  to  follow,  form  his  own  conclusions  on  this  topic. 

WAS  LEWIS  A  BRIBE-GIVER? 

The  theory  of  the  Government,  according  to  the  testimony  of  In- 
spector Stice,  is,  in  substance,  that  Lewis  endeavored  by  means  of  a 
systematic  campaign  of  bribery  to  maintain  representatives  in  his 
pay  or  interest,  in  all  of  the  various  branches  of  the  postal  service 
that  might  bear  directly  and  vitally  upon  the  conduct  of  his  publica- 
tions.    To  support  his  contention,  Stice  submits  this  summary: 

Records  of  the  Postoffice  Department  show  these  facts:  On  September 
23,  1899,  Inspector  E.  L.  ISIcKee  submitted  a  report  on  an  investigation  of 
the  Winner  Magazine,  published  by  the  INIail  Order  Publishing  Company, 
of  which  E.  G.  Lewis  was  president,  and  found  no  violation  of  the  postal 
regulations. 

On  April  14,  1900,  Inspector  McKee  submitted  a  report  on  a  second 
investigation  of  the  Winner  Magazine.  He  found  no  violation  of  law,  unless 
an  arrangement  as  to  certain  subscriptions  received  through  the  Sterling 
Remedy  Company  were  held  to  be  objectionable  by  the  Postoffice  Depart- 
ment. 

On  October  24,  1900,  Inspector  J.  D.  Sullivan  submitted  a  report  on  an- 
investigation  of  the  Winner  Magazine.  He  found  no  evidence  of  any  vio- 
lation of  the  postal  laws. 

On  December  10,  1901,  Inspectors  Harrison  and  Holden  submitted  a 
report  on  an  investigation  of  the  Winner  Magazine.  They  recommended 
that  the  second-class  privilege  be  withdrawn,  for  the  reason  that  the  statute 
was  not  complied  witii. 

On  May  12,  1902,  Inspectors  Price  and  John  D.  Sullivan  submitted  a 
report  on  an  investigation  of  the  Woman's  Farm  Journal.  They  found 
no  violation  of  law. 

George  A.  Dice,  who  was  inspector  in  charge  of  the  St.  Louis  division, 
became  a  stockholder  in  the  Lewis  Publishing  Company  on  its  incorpora- 
tion in  1903.  He  held  this  interest  up  to  the  time  of  his  death,  in  Novem- 
ber, 1904.  and  his  son  was  employed  by  E.  G.  Lewis  at  the  time  this  inves- 
tigation began,  in  February,  1905. 


164  THE  SIEGE  OF  UNIVERSITY  CITY 

A.  M.  Travers,  while  chief  clerk  in  the  office  of  the  third  assistant  post- 
master-general, was  employed  in  the  Fall  of  190i2,  by  the  Mail  Order  Pub- 
lishing Company,  E.  G.  Lewis,  president,  at  a  salary  of  fifty  dollars  per 
month  as  a  contributor  to  the  Woman's  Magazine. 

Harrison  J.  Barrett,  as  an  assistant  attorney  in  the  office  of  the  assistant 
attorney-general  for  the  Postoffice  Department,  accepted  a  gold  watch 
from  Lewis  and  Nichols,  while  an  officer  of  the  Postoffice  Department. 
Upon  severing  his  connection  with  the  Department  he  became  an  attorney 
for  Mr.  Lewis,  continuing  until  about  November,  1904. 

Inspector  McKee  became  a  stockholder  in  one  of  Lewis'  companies,  the 
U.  S.  Fibre  Stopper  Company  at  a  later  date,  about  1903.  He  obtained 
his  stock  at  ten  cents  on  the  dollar,  the  price  to  the  public  being  par. 

Inspector  John  D.  Sullivan  was  a  bondliolder  in  the  Development  and 
Investment  Company. 

Stice  further  remarks  that  the  application  for  entry  of  the 
Woman's  Magazine  had  been  pending  in  the  third  assistant's  Bureau 
since  August  21,  1902,  without  unfavorable  action.  He  says  that 
the  conduct  of  both  Travers  and  Barrett  was  under  investigation 
on  charges  of  an  attempt  to  obtain  money  in  that  connection  by 
false  pretenses.  He  recites  these  facts  as  substantial  reason  why 
the  postmaster-general  took  this  case  out  of  the  office  of  the  third 
assistant  and  assigned  it  for  investigation  to  the  division  of  post- 
office  inspectors.  Stice  elsewhere  alleges  that  Lewis  had  been  in 
trouble  with  the  Postoffice  Department  substantially  all  the  time 
since  1899,  and  plainly  suggests  the  inference  that  neither  the 
Winner  nor  the  Woman's  Magazine  were  at  any  time  in  full  com- 
pliance with  the  law,  but  would  have  been  excluded  by  the  Depart- 
ment except  for  Lewis'  success  as  an  adroit  corruptionist.  The  in- 
ception of  the  antagonism  of  the  Department  to  Lewis  and  his 
enterprises  is  thus  plausibly  accounted  for  upon  the  ground  that 
he  has  been  from  the  very  outset  of  his  career  as  publisher  a  vio- 
lator of  the  law.  His  alleged  system  of  bribery  is,  upon  this  theory, 
held  to  be  an  admission  of  guilty  knowledge  of  irregularities  to  be 
covered  up.  The  Department,  in  proceeding  against  Lewis,  is  held 
to  have  done  no  more  than  to  strip  from  him  the  mask  of  his  pre- 
tenses, and  to  bring  down  upon  him  the  consequences  of  his  own 
misdeeds. 

BRISTOW'S   REPORT    ON    LEWIS. 

The  officers  of  the  Government  thus  involved  with  Lewis  in  a 
common  accusation  are  Harrison  J.  Barrett,  an  assistant  in  the  office 
of  James  N.  Tyner,  assistant  attorney-general  for  the  Postoffice 
Dci)artnunt;  Arthur  M.  Travers,  chief  clerk  in  the  office  of  Third 
Assistant  Postmaster-General  Madden,  and  afterwards  for  a  time 
acting  tliird  assistant  postmaster-general;  George  A.  Dice,  postoffice 
inspector  in  charge  at  St.  Louis,  and  Inspectors  E.  L.  McKee  and 
John  D.  Sullivan.  The  bribe-giver  and  the  bribe-taker  (in  the  fa- 
miliar phrase  of  Theodore  Roosevelt)  are  equally  guilty.  Hence 
these  charges  against  Lewis  can  be  sustained  only  at  the  expense  of 
a  presumjjtion  tlint  the  employees  of  tlie  postal  service  are  quite 
generally  corruptible.    The  Government,  however,  docs  not  hesitate 


THE  DREYFUS  CASE  OF  AMERICA  165 

to  accept  this  horn  of  the  dilemma.  It  rejoins  in  substance,  that  the 
Postoffice  Department  during  some  part  of  the  administration  of 
McKinley  and  the  first  administration  of  President  Roosevelt  was,  in 
fact,  literally  reeking  with  corruption;  and  that  conspicuous  among 
the  high  officials  caught  red-handed  were  Harrison  J.  Barrett  and  W. 
H.  I.andvoight,  whose  names  are  identified  with  the  Lewis  case.  In 
further  support  of  its  contention,  the  Government  points  to  the  con- 
ditions disclosed  in  the  famous  report  of  October  24-,  1903,  of  Fourth 
Assistant  Postmaster-General  Bristow.  To  further  clinch  the  case 
of  the  Government,  the  famous  citation  from  Bristow's  report,  touch- 
ing the  episode  of  the  gift  of  a  gold  watch  by  Lewis  to  Barrett,  in 
behalf  of  the  Progressive  Watch  Company,  may  now  be  given: 

EXTRACT  FROM  THE  REPORT  OF  HOK.  J.  L.  BRISTOW,  FOURTH  ASSISTANT  POST- 
MASTER-GEXERAI.,  ON  THE  INVESTIGATION  OF  CERTAIN  DIVISIONS  OF  THE 
POSTOFFICE    DEPARTMENT,    DATED    AT    WASHINGTON,    OCTOBER    24,    1903. 

Prior  to  the  beginning  of  this  investigation,  statements  appeared  in  the 
public  press  to  the  effect  that  certain  fraudulent  schemes,  popularly  known 
as  "get-rieh-quick"  concerns,  were  being  allowed  tlie  unlawful  use  of  the 
mails  by  the  office  of  the  assistant  postmaster-general  for  the  Postoffice 
Department. 

The  failure  of  a  number  of  these  concerns  in  St.  Louis,  Missouri,  brought 
numerous  complaints  to  the  Department.  Inspectors  W.  J.  Vickery  and 
R.  M.  Fulton  were  placed  in  charge  of  the  investigation.  Their  report 
is   submitted  herewitli,  marked  Exhibit   F. 

At  that  time  James  N.  Tyner  was  assistant  attorney-general,  and  G.  A. 
C.  Christiancy  and  D.  V.  Miller  were  assistant  attorneys. 

Among  other  things  it  was  alleged  that  Harrison  J.  Barrett,  a  relative 
of  Tyner's  wife,  and  formerly  his  assistant,  was  extorting  large  amounts 
of  money  from  these  fraudulent  institutions  under  tlie  guise  of  fees  for 
legal  services  in  preventing  tlie  issue  of  fraud  orders  against  them. 

Barrett  was  appointed  assistant  to  Tyner  on  the  27th  day  of  May,  1897, 
and  served  until  Deceml)er  21,  1900,  when  he  retired  to  enter  a  law  partner- 
ship with  J.  Henniug  N'elms,  of  Baltimore,  Maryland.  He  was  succeeded 
in  office  by  G.  A.  C.  Christiancy. 

The  postmaster-general  is  authorized  by  law  to  refuse  the  use  of  the 
mails  to  anyone  conducting  a  lottery  business,  or  a  scheme  for  obtaining 
money  under  false  pretenses. 

All  questions  arising  under  the  fraud  or  lottery  statutes  are  referred 
to  the  assistant  attorney-general  for  the  Postoffice  Department,  and  he 
passes  upon  the  cases  as  presented  and  prepares  orders  prohibiting  the 
use  of  the  mails,  known  as  fraud  orders,  for  the  postmaster-general's 
signature.  These  cases  are  not  presented  to  the  postmaster-general  for 
consideration  unless  fraud  orders  are  recommended  by  the  assistant  attor- 
ney-general. The  responsibility,  therefore,  for  the  execution  of  the  statute 
referred  to  rests  with  the  office  of  the  assistant  attorney-general. 

The  administrative  methods  of  Tyner  and  Barrett  can  be  most  clearly 
illustrated  by  reviewing  a  number  of  cases  that  were  passed  upon  by  them. 

E.    G.    LEWIS,    ST.    LOUIS,    MO. 

E.  G.  Lewis,  of  St.  Louis,  Mo.,  was  conducting  what  is  known  as  an 
"endless  chain"  scheme.  He  offered  a  watch  for  ten  cents,  the  conditions 
being  that  the  original  sender  of  the  ten  cents  was  to  get  ten  cards.  These 
he  was  to  sell  or  give  away  to  ten  other  persons,  each  of  which  was  to 
send  ten  cents  and  receive  and  distribute  ten  more  cards.  And  when  all 
of  these  were  sent  to  Lewis  with  ten  cents  each,  the  watch  would  be  for- 
warded to  the  starter  of  the  cliain. 

Lewis  would  get  from  original  holder,  ten  cents;   from  first  circle,  one 


166  THE  SIEGE  OF  UNIVERSITY  CITY 

dollar;  from  second  circle,  ten  dollars;  total,  eleven  dollars  and  ten 
cents,  before  the  watch  was  sent. 

Barrett  ruled  that  the  chance  of  breaking  this  chain  was  so  great  that 
it  amounted  to  lottery;  that  the  possibility  of  one  person  controlling  the 
action  of  one  hundred  and  ten  persons — in  compound  style — was  so  remote 
that  it  made  the  prizes  dependent  upon  cliancc.  He  held,  however,  that 
the  simple  chain,  which  brought  the  prize  on  the  second  round,  did  not 
involve  chance  and  was  not  lottery;  that,  if  the  scheme,  in  other  words, 
gave  the  watch  upon  the  payment  by  the  ten  to  whom  the  first  man  sold 
his   tic'Kets,   it  might  use  the  mails.      (Exhibit   F-2.) 

Lewis,  according  to  Barrett's  rulings,  was  conducting  a  fraudulent  busi- 
ness. No  fraud  order  was  issued,  however,  and  he  was  permitted  to  wind 
up  the  current  business,  upon  the  promise  that  in  future  operations  he 
would  simplify  his  plan  as  suggested  by  Barrett. 

As  an  acknowledgment  of  the  kind  and  courteous  treatment  which  he 
received  at  the  hands  of  Barrett  in  disposing  of  the  case,  Lewis  presented 
him  with  a  gold  watch,  valued  at  thirty-five  dollars,  which  Barrett  accepted. 
Afterwards  it  appears,  however,  that  under  the  new  name  of  the  Mail 
Order  Publishing  Company,  Lewis  operated  the  same  old  scheme.  When 
Barrett  was  advised  of  this  he  wrote  Lewis,  under  date  of  July  25,  1899 
(Exhibit  F,  pp.  4-6),  accusing  him  of  bad  faith  in  returning  to  the  old 
scheme,  and  said: 

"You  requested  me,  in  consideration  of  my  courtesy  and  leniency,  to 
accept  a  watch,  which  you  sent,  and  which  I  accepted  in  good  faith;  but  now 
I  cannot,  with  self-respect,  retain  the  watch,  so  I  have  returned  it  to  you 
by  mail  to-day." 

It  seems,  however,  that  afterwards,  amicable  relations  were  re-established 
between  them,  and  Barrett  again  accepted  the  watch.  Later,  when  Barrett 
retired  from  office,  Lewis  employed  him  as  his  attorney. 

The  impropriety  of  an  officer  accepting  a  present  from  a  violator  of  the 
law  for  an  act  of  leniency  should  have  been  apparent  to  a  duller  man  than 
Barrett. 

In  September,  1900,  the  attorney-general  ruled  that  not  only  was  the 
compound  system  in  violation  of  the  law,  but  the  simple  scheme  as  well. 

The  above  extract  from  Bristow's  report  wherein  for  the  first  time 
the  names  of  W.  J.  Vickery  and  R.  M.  Fulton  are  linked  Avith  the 
name  of  E.  G.  Lewis,  was,  with  the  exception  of  the  sixth  and  sev- 
enth paragraphs,  reprinted  by  the  Department  and  issued  from  the 
office  of  Assistant  Attorney-General  Goodwin  in  reply  to  inquiries 
concerning  the  Lewis  case.  Lewis  was  thus  not  only  pilloried  before 
the  rank  and  file  of  the  postoffice  officiary  (all  of  whom  were  close 
students  of  this  report)  as  a  bribe-giver  and  violator  of  law.  That 
accusation  was  likewise  imparted  broadcast  to  the  general  public 
and  tlie  press. 

Stice  further  read  into  the  record  of  the  Ashbrook  Hearing  the 
memorandum  of  President  Roosevelt,  transmitting  Bristow's  report 
to  Congress,  and  characterizing  it  "as  thorough  a  bit  of  investigation 
work  as  has  ever  been  done  under  the  Government."  Roosevelt 
.states  that  the  facts  therein  set  forth  "show  literall}''  astounding  mis- 
conduct" on  the  part  of  Barrett.     As  to  him,  he  says: 

In  the  office  of  the  assistant  attorney-general  for  the  Postoffice  Depart- 
ment, under  Tyner  and  Barrett,  far  greater  wrong  was  inflicted  upon  the 
pulilic  than  could  be  measured  by  a  pecuniary  standard,  for  in  lliis  office 
the  corruption  of  Government  officials  took  the  form  of  favoring  get-rich- 
quick  concerns  and  similar  swindling  scliemes;  in  other  words,  the  criminals, 


^Dining  room  of  Lewis'  University  City  residence     "-Library 
The  library   adjoins  the   entrance  hall  and  living 
room  adjoins  the  library  n^mg 


room   upon   the   left.     The  dining 


^Guest  room  in  the  Lewis  home 

"Sleeping  apartment  of  Mr.   and  Mrs.  Lewis 


THE  DREYFUS  CASE  OF  AMERICA  169 

whom  it  was  the  sworn  duty  of  these  Government  officitils  to  prosecute, 
paid  them  for  permission  to  fleece  the  public  unmolested. 

The  President's  memorandum  closes  with  the  following  ringing 
peroration  which,  upon  the  theory  of  the  inspectors,  would  include 
Lewis  within  the  scope  of  presidential  rebuke: 

No  crime  calls  for  sterner  reprobation  than  the  crime  of  the  corrup- 
tionist  in  public  life  and  of  the  man  who  seeks  to  corrupt  him.  The  bribe- 
giver and  the  bribe-taker  are  equally  guilty.  Both  alike  sin  against  the 
primary  lav/  of  the  State's  safety.  All  questions  of  difference  in  party 
policy  sink  into  insignificance  when  the  people  of  this  country  are  brought 
face  to  face  with  a  question  like  this,  which  lies  at  the  root  of  honest 
and  decent  government.  On  this  question,  and  on  all  others  like  it,  we 
can  aiford  to  have  no  division  among  good  citizens.  In  the  last  resort  good 
laws  and  good  administration  alike  must  rest  upon  the  broad  basis  of  sound 
public  opinion.  A  dull  public  conscience,  an  easy-going  acquiescence  in 
corruption,  infallibly  means  debasement  in  public  life;  and  such  debasement 
in  the  end  means  the  ruin  of  free  institutions.  Self-government  becomes 
a  farce  if  the  representatives  of  the  people  corrupt  others  or  are  them- 
selves corrupted.  Freedom  is  not  a  gift  which  will  tarry  long  in  the  hands 
of  the  dishonest  or  of  those  so  foolish  or  so  incompetent  as  to  tolerate  dis- 
honesty in  their  public  servants.  Under  our  system  all  power  comes  from 
the  people,  and  all  punishment  rests  ultimately  with  the  people.  The 
toleration  of  the  wrong,  not  the  exposure  of  the  wrong,  is  the  real  offense. 

This  official  condemnation  of  Lewis  and  the  interlinking  of  his 
name  with  that  of  an  official  said  by  the  President  to  have  been 
guilty  of  "astounding  misconduct/'  was  then  (and  still  is)  conclusive 
upon  the  official  mind.  Lewis  was  found  by  Bristow  to  be  a  corrup- 
tionist  and  a  violator  of  the  law.  The  President  commended  and 
approved  his  findings.  Lewis,  therefore,  was  a  man  to  be  regarded 
with  suspicion  for  all  future  time,  because,  forsooth,  he  presented 
a  watch  to  Barrett  under  the  circumstances  above  narrated. 

baumhoff's  story. 
Was  Bristow  wholly  free  from  bias.''  Was  the  chief  inquisitor 
himself  guiltless  of  the  irregularities  which  he  so  freely  charged 
against  others .''  No  such  question  seems  to  have  crossed  the  mind  of 
anyone  connected  with  the  Siege  of  University  City  until  for- 
mer postmaster  at  St.  Louis,  F.  W.  Baumhoff,  was  placed  upon  the 
stand  during  the  session  of  the  Congressional  Committee  of  Inquiry 
at  St.  Louis  in  November,  1911.  Baumhoff  was  a  most  quiet,  self- 
possessed,  and  unassuming  witness.  His  testimony  gave  little 
promise  of  special  interest,  yet  he  electrified  all  present  at  the  hear- 
ing by  the  bold  assertion  that  he  had  always  known  what  first  caused 
the  attacks  of  the  Government  upon  the  Lewis  enterprises.  He  had 
kept  silent  during  the  entire  controversy  only  for  the  reason  that 
he  had  never  before  found  a  proper  occasion  to  speak.  Baumhoff 
then  exploded  a  mine  which  had  lain  dormant  for  eight  years ;  but 
which,  if  his  testimony  is  credible,  shatters  the  contention  of  the 
Government  into  a  thousand  pieces.  For  the  first  time  since  the 
report  of  Bristow  as  fourth  assistant,  he  brought  the  latter's  name 
into  the  Lewis  case.  He  graveh'^  charged,  in  substance,  that  it  was 
Bristow  who  had  instigated  the  early  investigations  of  Lewis.     The 


170  THE  SIEGE  OF  UNIVERSITY  CITY 

inference  was  clear  that  Bristow  liad  pilloried  Lewis,  nol  so  much 
to  expose  any  actual  wrong-doing  as  to  further  his  own  unscrupulous 
ambition.  The  story  told  by  BaumhofF,  whicli,  if  confirmed  by  the 
investigations  of  the  Congressional  Committee,  promises  to  let  the 
light  of  day  for  the  first  time  into  the  earliest  beginnings  of  this  con- 
troversy, is  in  substance  as  follows: 

My  name  is  Frederick  W.  Baumhoff.  I  reside  in  St.  Loxiis  and  am 
now  in  the  bond  business.  I  was  formerly  Postmaster  of  St.  Louis  for 
five  and  a  half  years.  I  entered  the  service  in  1881  and  left  it  on  Decem- 
ber 31,  1903.  Meantime  I  filled  various  positions  from  the  lowest  to  the 
liighest.    I  was  all  told  twenty-three  years  in  the  service. 

An  application  was  made  l\y  Mr.  Lewis  to  enter  a  little  magazine  called 
the  Winner  during  the  administration  preceding  mine.  I  was  then  Assist- 
ant Postmaster.  Mr.  Lewis  applied  for  and  was  given  a  franchise  for 
second-class  privilege.     I  had  nothing  to  do  with  that. 

The  Winner  Magazine  at  first  was  a  very  small  publication.  They  felt 
that  the  field  would  be  greater  if  they  changed  the  name  to  the  AV Oman's 
Magazine.  Every  time  a  publication  changes  its  name  a  new  application 
has  to  be  made.  So  Lewis  applied  for  second-class  entry  on  the  Woman's 
Magazine.  This  was  in  the  early  part  of  my  administration.  The  Depart- 
ment never  acted  on  that.  Mr.  Lewis  was  given  a  temporary  permit  to 
publish.  He  was  asked  to  give  up  the  old  permit  of  the  Winner  Magazine, 
which  was  a  little  printed  slip  of  paper  but  could  not  find  it.  So  he  was 
notified  to  use  the  old  permit  and  continue  publication.  I  wrote  the 
Department, — the  letter  should  be  on  file  there, — and  asked  about  the  appli- 
cation. I  was  advised  to  continue  accepting  it  and  so  notified  Mr.  Lewis. 
This  constituted  full  and  free  entry  of  the  Woman's  Magazine  to  second- 
class  privileges  absolutely.  Mr.  Lewis  was  first  given  a  temporary  permit. 
About  a  year  later  I  received  the  order,  "Please  notify  the  publisher  to 
continue."     I  understood  that  was  final. 

My  imderstanding  of  the  matter  is  that  the  old  permit  could  not  be 
found  and  so  could  not  be  exchanged,  and  Mr.  Lewis  was  therefore  told 
to  continue  imder  the  original  permit.  They  told  me  to  use  the  original 
permit.  As  far  as  my  knowledge  is  concerned,  the  Woman's  Magazine  was 
legally  entered  as  second-class  matter.  I  always  so  considered  it.  The 
returns  for  the  Woman's  Magazine  were  made  in  exactly  the  same  way  as 
those  of  other  regularly  entered  publications.  If  the  Department  gave  a 
temporary  permit  and  later  directed  the  publisher  to  continue,  it  could 
no  longer  be  considered  as  tem]>orary.  In  no  case  within  my  knowledge 
was  a  temporary  permit  allowed  to  run  so  long.  To  all  intents  and  pur- 
poses it  was  continued  as  on  a  permanent  order,  and  five  years  afterwards 
it  was  so  construed  by  postoffice  officials.  I  made  many  commimications 
and  several  personal  visits  to  the  Department.  I  was  assured  that  though 
many  investigations  had  been  made  there  was  nothing  against  Mr.  Lewis 
and  his  publication. 

There  was  no  more  reason  why  Mr.  Lewis'  publication  should  be 
selected  than  any  other.  Yet  they  have  been  investigated  in  every  con- 
ceivable way.  There  were  investigations  during  my  administration,  during 
administrations  l)cfore  me,  and  following  my  administration.  There  were 
investigations  l)y  postoffice  inspectors,  by  jx>ople  connected  with  the  legal 
department,  by  local  postoffice  insjicctors,  by  inspectors  dispatched  from 
other  points,  and  by  the  special  agents  of  the  Department  itself.  Mr. 
Bacon,  who  is  now  in  charge  of  the  Department,  himself  came  on  and  made 
an  investigation  lasting  a  week  or  two. 

I  recall  many  investigations  not  only  of  Mr.  Lewis'  magazines  but  of 
others.  This  is  customary.  An  investigation  sometimes  originates  locally 
and  sometimes  at  Washington.     Often  the  work  is  done  locally  by  direc- 


THE  DREYl^US  CASE  OF  AMERICA  l7l 

tion  of  the  Department,  or  it  may  be  done  by  persons  from  the  third  assist- 
ant's office.    That  happened  in  a  number  of  cases  besides  Lewis'. 

Lewis  is  simply  unfortunate.  He  was  not  in  my  opinion  specially 
picked  out  for  investigation  on  account  of  anything  he  had  done,  but  came 
into  the  matter  accidentally.  I  may  say  I  am  not  friendly  to  Mr.  Lewis 
and  not  unfriendly.  I  don't  suppose  I  have  talked  to  him  half  a  dozen 
times  since  I  left  the  service.  Some  of  his  later  plans  I  do  not  approve. 
But  my  story  will  bring  out  what  I  believe  to  have  been  the  real  beginning 
of  what  is  now  known  as  tlie  Lewis  case. 

SOME    KANSAK    POLITICS. 

During  the  early  days  of  Roosevelt's  administration,  there  was  much 
dissatisfaction  in  the  Postoffice  Department.  Officials  were  fighting  one 
another  in  rivalry,  in  attempts  to  get  even  on  old  scores  and  in  many 
other  ways. 

At  this  time  quite  a  majority  of  all  the  postoffice  inspectors  were  being 
appointed  from  Kansas.  Lhey  were  in  many  cases  illegally  appointed.  To 
understand  how  this  came  about  it  is  necessary  to  state  one  of  the  rules  of 
civil  service,  otherwise  called  the  classified  service.  There  are  many 
postofficcs  which  are  outside  the  classified  list  because  of  the  small  amount 
of  mail  they  handle.  The  business  of  these  offices  grows  as  the  population 
of  the  towns  increase,  and  when  they  have  attained  the  necessary  size, 
these  postoffices  are  also  classified.  Before  a  postoffice  is  thus  placed  under 
the  civil  service  rules  any  one  can  be  appointed  as  clerk  or  other  employee, 
without  being  graded  in  examination.  When  the  postoffice  is  classified  all 
the  employees  on  the  payroll  at  that  time  are  put  into  the  civil  service. 
»So  if  any  one  happened  to  know  that  a  given  postoffice  was  about  to  be 
classified  and  could  secure  an  appointment  there  as  clerk,  he  could  evade 
the  civil  service  regulations. 

A  good  deal  of  that  sort  of  thing  was  then  being  done.  A  man  would 
be  appointed  as  clerk  at  an  unclassified  postoffice.  Shortly  after,  that 
office  would  be  put  in  the  civil  service.  Then  the  newly  appointed  clerk 
would  be  transferred  to  the  postoffice  inspectors'  division  and  appointed  as 
postoffice  inspector  at  some  other  location.  There  never  was  any  difficulty 
in  thus  transferring  men  from  one  branch  of  the  classified  service  to 
another.    That  is  one  of  the  weaknesses  of  our  civil  service  regulations. 

A  number  of  men  were  transferred  about  this  time  from  local  post- 
offices  in  Kansas  to  positions  as  clerks  in  offices  which  were  about  to  be 
classified.  Later,  they  were  assigned  to  the  postoffice  inspectors'  division 
from  those  localities.  The  records  would  show  that  a  postoffice  inspector 
had  been  assigned,  say  from  Kentucky.  So  he  was.  But  investigation 
would  reveal  that  he  was  originally  appointed  from  Kansas,  then  transferred 
to  Kentucky,  and  from  there  appointed.  This  has  a  direct  bearing  on 
the  Lewis  case. 

BRISTOW    vs.    DICE. 

The  inspector-in-charge  of  the  St.  Louis  office  for  a  long  time  was  a 
very  competent  man.  His  name  was  George  A.  Dice.  He  is  now  dead. 
He  came  originally  from  Tennessee,  but  his  home  was  in  Danville,  111., 
Uncle  Joe  Cannon's  town.  An  effort  was  made  once  or  twice  to  remove 
Mr.  Dice.  An  insyfcctor  was  once  sent  to  St.  Louis  under  pay  of  the 
Department  at  Washington,  with  the  delicate  mission  to  get  Mr.  Dice  trans- 
ferred. He  was  offered  any  place  except  Chicago.  That  was  a  fixture.  Mr. 
Dice  immediately  appealed  to  Mr.  Cannon  and  the  Speaker  vetoed  it.  He 
went  to  the  President  about  it  and  had  it  stopped.  From  that  time  on 
there  were  petty  jealousies.  A  little  fight  developed  within  the  service 
that  finally  drove  Mr.  Dice  into  his  grave.  He  often  complained  to  his 
friends  of  the  persecutions  of  the  Department  to  get  rid  of  him  and  get 
another  man.  Inspector  Harrison,  into  his  place  as  inspector-in-charge 
of  the  St.  Louis  Division. 

All  the   states  of  the   Union   are   grouped   into   these   inspectorial   divi- 


172  THE  SIEGE  OF  UNIVERSITY  CITY 

sionp  with  headquarters  in  some  railroad  centre.  For  instance,  Boston  is 
headquarters  for  New  England;  New  York  City  for  New  York,  Brooklyn 
and  lAtng  Island.  A  district  often  comprises  several  states.  In  our  State 
of  Missouri  we  are  better  provided  for.  We  have  two  divisions.  This 
again  has  a  direct  bearing  upon  the  Lewis  case. 

Mr.  Bristow  of  Kansas  was  then  fourth  assistant  postmaster-generaL 
Formerly  the  State  of  Ivansas  was  in  the  St.  I>ouis  Division,  and  therefore 
under  the  insi>ector-in-charge  at  St.  Louis.  Inspector  Harrison  is  from 
Kansas.  Every  power  that  could  possibly  be  exercised  was  used  to  put  him 
in  Mr.  Dice's  place  in  order  to  cover  that  state.  When  all  efforts  failed 
Congress  took  the  matter  up  and  a  new  postoffice  division  was  installed 
with  headquarters  at  Kansas  City.  This  takes  in  Kansas  City  and  one 
county  out  of  Missouri,  besides  the  whole  State  of  Kansas.  Harrison  was 
made  inspector-in-ciiargc.  He  is  now  United  States  Marshal  in  Kansas. 
I  do  not  know  if  that  is  how  Mr.  Bristow  was  elected  Senator,  but  I  do 
know  that  when  anything  m  the  way  of  politics  was  going  on  in  Kansas, 
there  were  more  postoffice  inspectors  there  than  in  any  other  state.  Per- 
haps they  went  there  to  prevent  people  voting  illegally.  Maybe  not.  You 
can  judge  for  yourselves. 

Meantime  every  effort  was  being  made  to  undermine  Mr.  Dice  and  find 
fault  with  everj'thing  he  did.  That  I  tiiink  is  how  the  Lewis  case  became 
prominent.  The  inspectors  finally  settled  on  the  Lewis  case  as  the  means 
by  which  they  could  accomplish  their  end. 

LEWIS    MADE    THE    "oOAT." 

That  was  about  the  time  my  service  expired.  I  left  December  13,  1903. 
Shortly  after  that,  as  we  know,  the  I^vvis  case  came  up.  The  prime  mover 
in  it  was  the  man  who  succeeded  Mr.  Dice,  a  Mr.  Fulton.  My  interest 
ceases  there.  After  that  I  was  not  in  the  service  and  cannot  tell  what 
happened.  Perhaps  after  I  left  Mr.  Lewis  suddenly  acquired  a  good  many 
dishonorable  methods.  I  will  say  that  during  my  service  to  the  best  of 
my  knowledge  he  did  not.  His  subscriptions  continually  grew  and  he  had 
a  very  prosperous  business  so  far  as  his  publications  were  concerned.  His 
People's  Bank  was  organized  after  I  left  the  service.  Perhaps  the  very 
moment  I  left  the  office  and  closed  the  door  behind  me  as  Postmaster,  the 
I^ewis  puljlications  suddenly  went  wrong.  I  do  not  know.  I  am  not  vouch- 
ing for  them.  I  am  giving  a  statement  of  facts,  as  I  know  them,  which 
I  have  always  believed  led  up  to  the  investigation  that  followed. 

Mk.  Lewis:  All  this  is  new  to  me,  Mr.  BaumhofF.  I  would  like  to 
get  the  specific  cijcumstances.  You  stopped  just  when  I  was  sliding  in 
between  the  cog  wheels.  Was  Mr.  Dice's  subscription  to  the  stock  of  the 
Lewis  Publishing  Company  utilized  in  connection  with  this  affair? 

Mr.  Baumhoff:  Every  action  of  Mr.  Dice  was  passed  upon  by  people 
under  him.  The  Department  encouraged  that  and  still  encourages  it.  There 
is  often  one  body  of  inspectors  going  around  and  another  following  them 
to  make  sure.  The  point  I  am  getting  at  is  that  the  Lewis  case  was  used 
in  an  effort  to  undermine  Mr.  Dice  and  find  out  something  they  could 
report  which  would  show  his  incompetency.  This  caiLsed  those  in  authority 
to  overlook  the  irregularity  of  the  way  in  which  the  whole  aflfair  was 
conducted. 

Many  other  things  the  Department  had  on  hand  were  waived  aside. 
Everything  was  done  to  push  the  Lewis  case.  Clerks  were  detailed  from  the 
postal  service  to  go  out  there  to  University  City.  They  spent  months  at  a 
time.  Thirty,  forty  and  if  I  remember  right,  at  one  time  about  seventy, 
clerks  were  there.  The  main  matter  of  fault  finding  was  the  price  he  was 
charging  for  his  paper.  I  think  it  was  ten  cents  a  year.  After  many  in- 
vestigations which  seemed  to  favor  Lewis,  the  publication  was  finally 
closed  up.     That  in  a  general  way  is  the  history  of  the  case. 

The  origin  of  it  was  an  unfair  attitude  toward  Mr.  Dice.  He  did  not 
want  to  leave  St.  Louis.     His  home  was  here.    Yet  one  effort  after  another 


Mr  and  Mrs.  Lewis  escaping  business  and  social  cares.  i  iu-  reporters  -u'iio  called 
to  interview  Lewis  when  the  Peoples'  United  States  Bank  was  first  thrown  into  the 
hands  of  a  receiver  were  informed  that  he  was  horse-back  riding 


K%||2sw«-'   «    •'^ 


i^^  mmy^it 


c4'':^;5::.;;tr^/,^Lx,»^i,""t;2 ':::,' tri  "-^^r"'  of  t,e  university 

come  ,o,s  are  caUc,  By  dn  iA/Xf.r-'^J'lSl/i^'.  'iFul^^Uy'l^^t^''"''  '""" 


THE  DREYFUS  CASE  OF  AMERICA  175 

was  made  to  eflfect  his  transfer,  and  the  Lewis  affair  came  in  as  a  by-plaj 
of  that.  The  Lewis  case,  to  use  a  siang  express,  was  made  simply  the 
"goat". 

Did  the  Lewis  case  have  its  origin  in  Bristow's  efforts  to  discredit 
Dice?  Were  Harrison  and  Holden  sent  to  investigate  the  Winner 
in  order  to  find  charges  against  Dice  of  incompetence,  corruption 
or  neglect  of  duty  ?  Did  they  report  as  they  were  expected  to  report, 
to  serve  the  purposes  of  Bristow  and  contrary  to  the  true  facts? 
Such,  in  substance,  is  the  logical  inference  from  BaumhofF's  story. 
The  issue  between  Bristow  and  Dice  was  a  drawn  battle.  Dice  was 
sustained  by  Cannon  against  the  alleged  persecution  of  Bristow. 
Nevertheless,  the  latter,  whose  influence  was  augmented  by  the  suc- 
cess of  his  famous  report,  accomplished  his  end,  first,  by  the  division 
of  Dice's  territory,  and  afterward  by  hounding  Dice  into  the  grave. 

ENTER  VICKERY  AND  FULTON. 

Lewis,  meantime,  to  use  his  own  picturesque  phrase,  had  "slipped 
into  the  cogs"  of  the  departmental  machinery  and  had  become  inex- 
tricably entangled.  The  very  page  of  Bristow's  report  upon  which 
Lewis  was  pilloried  as  a  violator  of  the  law,  contains  the  following 
sentences  which,  in  the  light  of  after  events,  bear  a  sinister  signi- 
ficance : 

The  failure  of  a  number  of  these  concerns  (popularly  known  as  get- 
rich-quick)  in  St.  Louis,  Missouri,  brought  numerous  complaints  to  the 
Department.  Inspectors  W.  J.  Vickery  and  R.  M.  Fulton  were  placed  in 
charge  of  the  investigation.  Their  report  is  submitted  herewith,  marked 
Exhibit  F. 

What,  if  anything,  this  report  may  have  had  to  do  with  the  endless 
chain  scheme  conducted  by  the  Winner,  is  still  unknown.  But  both 
Vickery  and  Fulton  must  have  been  cognizant  of  the  attitude  of 
Bristow  toward  Dice  and  of  the  latter's  friendliness  with  Lewis. 
The  eyes  of  Vickery  and  Fulton  must  often  have  turned  to  this  page, 
which  thus  bore  their  own  names  cheek-by-jowl  with  that  of  Lewis. 
The  phrases  which  thus  characterize  Lewis  as  conducting  a  fraudu- 
lent business  and  as  a  violator  of  the  law,  must  have  been  indelibly 
stamped  upon  their  recollection.  The  clever  story  made  by  Bristow 
of  the  simple  incident  of  the  sample  watch  to  attach  more  firmly 
the  stigma  of  bribe-taker  to  Barrett,  and  to  characterize  the  friend 
of  Dice  as  a  corruptionist  and  breaker  of  the  law,  thus  assumes  a 
consequence  out  of  all  proportion  to  its  proper  nature.  When  Lewis' 
attention  was  first  drawn  to  it,  he  dismissed  it,  doubtless,  with  a 
laugh.  Yet,  next  to  the  charges  of  Howard  Nichols,  those  of  Bristow 
have  probably  been  the  most  injurious  that  have  been  brought  against 
Lewis  during  his  entire  career, 


CHAPTER  VII. 
THE   RISE  OF  THE  WINNER. 

The    Richarz     Pressrooms — The     Woman's      Farm    Journal 

Strides  of  Progress — The  Elimination  of  Nichols New 

Business  Affiliations — The  Vision  of  the  World's  Fair. 
Viewed  from  the  higher  altitude  of  historical  perspective,  it  is 
easy  now  to  see  gathering  below  the  horizon  of  Lewis'  affairs  in  1903 
the  clouds  that  afterwards  bred  a  tempest  so  portentous.  But  to 
Lewis,  at  that  time,  the  skies  seemed  clear.  The  fates  at  last  ap- 
peared to  be  broadly  smiling  upon  his  enterprise.  The  years  spanned 
by  the  story  of  the  Mail  Order  Publisliing  Company,  from  the  first 
issue  of  the  Winner  of  May,  1899,  to  the  organization  of  the  Lewis 
Publishing  Company  on  April  15,  1903,  worked  a  transition  in 
Lewis'  fortunes  little  short  of  miraculous.  We  are  now  to  inquire 
how  he  first  got  a  firm  grip  on  the  lowest  rungs  of  the  ladder  by 
which  in  a  few  brief  years  he  climbed  to  fame  and  fortune. 

The  chief  problem  in  the  development  of  the  Winner  as  a  piece 
of  proiDerty  was  to  provide  the  necessary  mechanical  equipment. 
St.  Louis  was  never  a  centre  of  the  printing  and  publishing  industry. 
There  were  in  the  early  days  of  the  Winner,  no  pressrooms  in  that 
city  capable  of  producing  at  moderate  prices  the  enormous  output 
required.  The  first  earnings  of  the  magazine  were,  therefore,  swal- 
lowed up  by  the  purchase  of  new  printing  apparatus. 

THE  RICHARZ  PRESSROOMS. 

The  best  equipped  pressroom  in  St.  Louis,  from  Lewis'  point  of 
view,  and  the  one  which  he  selected  to  print  the  Winner,  was  that  of 
J.  P.  Richarz.  Even  this  was  very  inadequate.  The  owner,  a 
thrifty  German  and  competent  mechanic,  was  not  by  temperament 
or  experience  qualified  to  finance  a  large  enterprise,  nor  did  he  have 
the  funds.  Lewis,  in  order  to  get  his  work  out  at  all,  was  soon  under 
the  necessity  of  providing  additional  capital  for  Richarz.  He  was 
obliged  also  to  purchase  for  the  Winner,  and  install  in  the  Richarz 
Pressrooms,  or  wherever  available  space  could  be  rented  in  the 
vicinity,  a  large  part  of  the  machinery  required  to  meet  the  needs 
of  liis  ever-increasing  circulation.  Lewis  foresaw  that  he  must,  in 
the  end,  maintain  his  own  printing  establishment.  So,  he  conceived 
the  plan  of  buying  Richarz  out.  The  purchase  of  his  first  interest 
in  the  Richarz  Pressrooms  is  an  important  step  in  his  career.  The 
way  in  which  he  financed  the  deal  is  characteristic  of  his  ingenuity 
in  financial  affairs,  since  so  Avidely  noted.  This  deal  introduces  two 
men,  George  D.  Allen  and  C.  D.  Garnett,  who  afterwards  became 
Lewis'  fast  friends  and  backers. 

176 


THE  DREYFUS  CASE  OF  AMERICA  177 

Lewis,  in  brief,  negotiated  a  contract  -H'ith  the  Garnett  &  Allen 
Paper  Company,  whereby,  in  consideration  of  his  agreement  to 
purchase  from  them  for  a  terra  of  j^ears  the  paper  stock  required 
for  the  Winner,  he  obtained  the  use  of  five  thousand  dollars  cash. 
The  loan  was  payable  in  instalments  upon  easy  terms.  This  sum 
he  applied  on  the  purcliase  at  par  of  a  third  interest  in  the  capital 
stock  of  the  Richarz  Pressrooms  of  twenty-five  thousand  dollars. 
The  balance  was  to  be  deducted  from  the  first  profits  accruing  to  the 
stock.  He  then  pledged  to  Garnett  &  Allen  the  stock  thus  purchased 
as  security  for  their  loan.  To  employ  a  homely  phrase,  he  thus  made 
one  hand  wash  the  other. 

The  Richarz  Pressrooms  Company,  in  which  Lewis  thus  became  a 
third  owner,  had  been  organized  during  the  year  1900  as  a  close 
corporation.  Two-thirds  of  the  stock  was  still  held  by  Richarz  and 
members  of  his  family.  To  protect  his  interest  as  a  minority  stock- 
holder, Lewis  required  Richarz  to  enter  into  a  pool  of  their  joint 
holdings.  By  the  terms  of  the  pool,  Lewis  became  a  director  and 
secretary  of  the  company.  The  concern  agreed  to  contract  no  lia- 
bilities or  indebtedness  other  than  current  bills  without  his  consent. 
The  purchase  of  paper  stock  by  the  company  was  thrown  to  Garnett 
&  Allen.  Lewis  was  authorized  to  receive,  in  addition  to  the  divi- 
dends on  his  stock,  one-fourth  of  the  profits  on  all  orders  brought 
to  the  company  by  him.  The  cash  paid  over  by  him  for  his  interest 
was  to  be  used  for  the  exclusive  purpose  of  developing  and  increas-, 
ing  the  business  and  profits  of  the  company. 

A  contract  was  thereupon  consummated  between  the  Mail  Order 
Publishing  Company  and  the  Richarz  Pressrooms,  whereby  the  latter 
concern  undertook  to  print,  fold,  bind,  wrap,  and  deliver  to  the  post- 
office  at  St.  Louis,  the  Winner  for  a  period  of  four  years,  on  an 
agreed  basis.  Payment  was  to  be  made,  one-half  in  cash  and  the 
remainder  in  the  notes  of  the  Mail  Order  Publishing  Company  en- 
dorsed by  H.  L.  Kramer,  Postoffice  receipts  were  to  be  accepted 
by  both  parties  as  proof  of  the  number  of  copies  printed  and 
delivered.  The  work  of  printing  the  Winner  was  always  to  have 
precedence.  The  entire  issue  was  to  be  printed  within  twenty  days 
from  the  receipt  of  plates  from  the  foundry.  A  board  of  arbitration 
was  provided  to  adjust  disputes.  This  transaction  was  closed,  and 
eight  hundred  and  thirty  shares  of  stock  were  assigned  to  Lewis  on 
March  16,  1901. 

THE    woman's    farm    JOURNAL. 

Having  now  established  lines  of  credit  on  his  two  principal  items 
of  expense;  namely,  the  cost  of  printing  and  paper  stock,  Lewis 
looked  about  him  for  new  worlds  to  conquer.  During  the  early  days 
of  the  Winner  the  publisher  of  a  local  farm  paper  had  offered 
Lewis  one  thousand  dollars,  on  condition  that  he  install  the  endless 
chain  plan  on  that  periodical  and  double  its  circulation  within  one 
year.  This  was  The  Woman's  Farm  Journal,  an  old  established 
periodical,  which  bore  an  excellent  reputation   among  advertising 


178  THE  SIEGE  OF  UNIVERSITY  CITY 

men.  Lewis  accepted  the  offer,  and  more  than  tripled  the  circula- 
tion. This  sum  was  very  acceptable  in  itself,  but  of  even  greater 
value  to  Lewis  was  the  acquaintance  thus  formed  of  Frank  J.  Cabot, 
who  afterwards  became  one  of  his  close  associates.  This  is  Lewis' 
story : 

In  traveling  around  the  country,  securing  advertising  patronage  for  the 
Winner,  I  heard  a  great  deal  of  a  paper  published  in  St.  Louis,  called  The 
Woman's  Farm  Journal.  Advertisers  used  to  sav:  "There  is  only  one 
paper  that  can  come  near  your's  in  results.  That  is  a  little  paper  in  your 
own  city,  the  Woman's  Farm  Journal."  I,  therefore,  talked  the  matter 
over  with  Mr.  Cabot,  the  publisher,  and  finally  bought  the  paper  from  him. 
Later,  I  took  him  into  the  business." 

To  finance  tliis  deal,  Lewis  required  the  sum  of  five  thousand  dol- 
lars. To  get  this,  he  took  in  two  advertising  men,  Messrs.  Hack- 
staff  and  Budke,  connected  with  the  Nelson  Chesraan  &  Co.  adver- 
tising agency.  His  letter,  under  date  of  April  4,  1901,  containing 
this  proposition,  shows  the  status  of  Lewis'  affairs  at  that  time.  It 
also  affords  an  insight  into  his  manner  of  putting  through  a  deal. 
Lewis  says: 

The  writer  intends  to  purchase  the  Woman's  Farm  Journal  of  St.  Ix)uis. 
This  paper  is  eleven  years  old.  It  has  a  profit  of  about  five  hundred  dol- 
lars net  per  month.  It  has  never  been  pushed  or  exploited  in  any  manner, 
and  is  first-class  property.  The  price  set  on  it  is  fifteen  thousand  dollars. 
My  intention,  as  soon  as  I  secure  this  paper,  is  to  increase  its  make-up  and 
circulation,  and  also  to  raise  its  advertising  rate  with  the  September  num- 
ber. 

With  the  facilities  we  have  for  publishing  such  a  paper  we  can  produce 
one  hundred  thousand  copies  each  issue,  at  two  hundred  dollars  per  month 
less  than  the  present  proprietor  pays.  We  also  have  facilities  for  running 
its  circulation  uj)  very  rapidly.  By  using  the  fine  engravings  and  good 
stories  that  ^^ere  published  in  the  Winner  a  year  ago,  we  can  greatly  im- 
prove the  contents  without  expense.  We  can  thus  get  everything  out  of 
this  property  that  there  is  in  it.  We  hope  within  a  year  to  make  it  the 
foremost  Farm  Journal  in  the  country. 

We  also  propose  to  purchase  immediately,  a  very  fine,  large,  rotary 
printing  press.  This  is  ofiFered  to  us  at  one-third  of  its  original  cost  and 
is  practically  brand  new.  We  shall  probably  have  to  pay  two  thou- 
sand dollars  cash  and  one  hundred  dollars  a  month  on  this  press.  But  a 
very  careful  estimate  shows  that  it  will  save  about  three  hundred  dollars 
a  month  net  on  the  cost  of  producing  the  two  papers.  The  purchase  of 
this  press  will  be  a  joint  proposition  ijetween  the  Mail  Order  Publishing 
Company  and  the  Woman's  Farm  Journal  Company,  pro  rated  on  the 
number  of  copies  printed  on  it  of  each  publication. 

Lewis  then  proposes  to  incorporate  the  Farm  Journal  Publishing 
Company  for  twenty-five  thousand  dollars,  accepting  the  capital 
stock  in  full  payment  for  the  property.  He  offers  Messrs.  Hack- 
staff  and  Budke  a  one-fifth  interest  for  par,  namely,  five  thousand 
dollars  cash,  with  a  bonus  of  an  equal  amount  in  advertising  space 
in  the  Woman's  Farm  Journal  and  the  Winner.  He  thus  proposed 
to  give  them  a  fifth  interest  in  the  concern  for  the  use  of  five  thou- 
sand dollars  for  a  few  months.  Lewis  expressed  the  opinion  that 
he  could  make  the  stock  of  the  Farm  Journal  pay  twenty  per  cent 
the  first  vear  of  its  life. 


THE  DREYFUS  CASE  OF  AMERICA  179 

His  offer  appears  to  have  been  promptly  accepted.  Two  days 
later  a  purchase  and  sales  agreement  was  entered  into  between  Lewis 
and  Cabot  transf tarring  to  the  former  the  property  of  the  Woman's 
Varva  Journal,  including  its  entire  mechanical  equipment,  its  good- 
will and  accounts  receivable.  Another  item  specified  in  the  pur- 
chase was  a  mailing  list  of  two  hundred  thousand  names  for 
sampling.  The  consideration  mentioned  was  fifteen  thousand  dol- 
lars. The  sum  of  one  thousand  was  to  be  paid  in  cash.  An  addi- 
tional sum  of  five  thousand  was  payable  in  advertising  space  at 
current  net  rates  in  the  Winner.  Two  thousand  dollars  additional 
was  payable  in  Lewis'  notes  of  hand,  endorsed  by  the  Mail  Order 
Publishing  Company.  Lewis  assumed  a  contract  for  news  printing 
paper  with  the  Garnett  &  Allen  Paper  Company  on  which  a  consid- 
erable balance  of  paper  stock  was  yet  to  be  delivered.  He  also 
gave  as  security  for  his  notes  a  mortgage  on  the  Journal  itself.  The 
property  was,  however,  to  be  delivered  to  him  at  once  free  from  all 
other  liabilities.  A  memorandum  of  agreement  to  this  effect  was 
drawn  forthwith,  and  the  projicrty  at  once  changed  hands. 

A  separate  agreement  of  even  date  shows  that  Lewis  was  not  slow 
to  make  use  of  a  method  of  financing  that  had  once  proved  to  be 
successful.  The  Graham  Paper  Company,  one  of  the  largest  busi- 
ness concerns  of  St.  Louis,  by  this  document  loaned  the  Farm 
Journal  Company  the  sum  of  five  thousand  dollars  upon  terms  almost 
identical  with  the  Garnett  &  Allen  deal;  namely,  on  consideration 
of  the  exclusive  purchase  by  Lewis  from  them  of  all  paper  stock 
required  by  the  P^arm  Journal  Company.  The  price  of  the  paper 
in  both  cases  was  to  be  determined  each  six  months  by  the  current 
market  rate.  A  slight  complication  arose  on  account  of  the  unde- 
livered balance  of  stock  due  the  Farm  Journal  on  the  Garnett  & 
Allen  contract;  but  this  appears  to  have  been  amicably  adjusted,  and 
the  paper  used. 

Lewis  next  caused  a  new  corporation  to  be  formed  to  acquire  the 
property  of  the  Woman's  Farm  Journal.  This  was  known  as  the 
Farm  Journal  Publishing  Company.  Its  certificate  of  incorporation 
was  placed  of  record  on  April  17,  1901.  One  hundred  and  fifty 
shares  of  stock  in  the  concern  were  issued  to  Lewis  and  fifty  shares 
to  Nichols.  Fifty  shares  appear  to  have  been  dividedbetween  Hack- 
staff  and  Budke.  The  new  company  then  took  over  the  publication 
of  the  Journal,  Cabot  and  Mrs.  Cabot  being  retained  in  charge  of 
the  editorial  end. 

STRIDES     OF     PROGRESS. 

A  good  deal  of  additional  business  resulted  from  the  purchase  of 
the  Woman's  Farm  Journal.  The  new  capital  thus  added  to  Lewis' 
cash  resources  eased  his  financial  strain.  A  sense  of  security  also 
resulted  from  his  long-time  contracts  on  presswork  and  paper  stock. 
These  conditions  led  to  his  removal  from  the  cramped  quarters  he 
had  previously  occupied  to  a  new  location.  Shortly  after  the  Journal 
was  taken  over,  he  leased  a  suite  of  rooms  on  the  second  floor  of  the 


180  THE  SIEGE  OF  UNIVERSITY  CITY 

office  building  at  iOSyj  North  Eighth  street,  St.  Louis,  for  a  period 
of  two  years,  beginning  June  15,  1901,  and  immediately  removed 
the  equipment  of  tlie  Winner  and  the  Journal  thither. 

The  number  and  variety  of  Lewis'  enterprises  was  now  such  as 
to  cause  him  and  his  friends  some  anxiety  as  to  what  the  outcome 
might  be  in  the  event  of  his  sudden  death.  These  and  other  con- 
siderations, to  be  explained  in  subsequent  chapters,  led  to  the  organi- 
zation, in  June,  1901,  of  the  Development  and  Investment  Company 
as  a  holding  concern  for  liis  various  interests.  On  June  20,  there- 
fore, Lewis'  entire  holdings  in  both  publications,  consisting  of  three 
hundred  shares  in  the  Mail  Order  Publishing  Company*  and  one 
hundred  and  fifty  shares  in  the  Farm  Journal  Publishing  Company, 
were  made  over  to  this  corjioration.  Nichols  testified  before  the 
Ashbrook  Committee  that  to  his  knowledge  Lewis  did  not  in  fact 
thus  transfer  his  holdings.  Both  the  above  certificates  of  stock, 
however,  bear  Nichols'  signature  as  secretary. 

The  chief  landmarks  of  Lewis'  progress  during  this  period  may 
now  be  rapidly  sketched  in.  During  the  month  of  November,  1901, 
he  contracted  with  the  Kidder  Press  Comjjany  for  the  purchase  and 
delivery  of  the  rotary  press  mentioned  in  his  proposal  to  Messrs. 
HackstafF  and  Budke.  The  consideration  mentioned  was  ten  thou- 
sand dollars.  This  was  payable  in  instalments  over  a  term  of 
twent3^-three  months.  Delivery  and  installation  of  the  press  in  the 
Richarz  Pressrooms  was  promised  for  the  following  August. 

During  the  month  of  December,  Lewis  entered  into  a  contract 
with  the  Nelson  Chesman  Advertising  Agency  to  place,  during  the 
ensuing  year,  the  equivalent  of  five  thousand  dollars  a  month  adver- 
tising in  publications  of  general  circulation,  for  subscriptions  to 
the  A^'^inner  and  the  Woman's  Farm  Journal.  This  advertising 
caused  a  rapid  expansion  of  his  business. 

The  outlook  at  the  beginning  of  the  new  year,  led  Lewis,  in  Janu- 
ary, 1902,  to  extend  his  quarters  to  include  the  entire  second  floor 
of  the  building  at  108)^  North  Eighth  street,  to  which  he  had 
recently  removed.  The  terms  of  this  lease  permitted  his  placing 
the  sign  "Winner  Building"  over  the  entrance.     A  corresuonding 


'A  memorandum  of  statement  of  this  company  from  January  1  to  October  1,  1901, 
in  Lewis'  own  handwriting  is  still  preserved.  The  income  from  advertising  space  was 
represented  in  round  figures  as  $72,000,  that  from  subscriptions  as  $20,000,  or  a  total 
of  $92,000  cash  revenue  all  told.  The  total  expenses  of  all  sorts  were  shown  to  be 
$74,000,  a  net  jjrofit  of  $18,000  for  the  period  of  nine  months,  exclusive  of  the  three 
best  months  of  the  business  year.  Lewis  estimated  that  his  business  for  the  following 
year  would  be  approximately  $S£,000,  and  a  resulting  profit  in  that  case  at  the  rate 
of  $65,000  per  annum. 

His  assets,  consisting  of  cash,  bills  and  accounts  receivable,  paper  stock  and  equip- 
ment, were  represented  in  round  figures  as  $31,000.  The  cash  value  of  the  subscrip- 
tion list  was  estimated  as  $56,000,  independent  of  the  good-will  of  the  magazine  itself. 
As  against  these  total  assets  of  $87,000  were  shown  bills  and  accounts  payable  of 
$14,000,  and  capital  stock,  $50,000  or  $64,000  all  told,  leaving  a  net  surplus  of  $23,000, 
exclusive  of  the  franchise  value  of  the  publication.  Lewis'  memorandum  shows  a  total 
of  274,000  paid-in-advance  ten-cent  subscriptions,  and  113,000  twenty-five-cent  subscrip- 
tions, procured  at  an  advertising  expenditure  of  $25,000. 

This  memorandum  appears  to  have  been  prepared  by  Lewis  for  his  own  informa- 
tion, as  there  is  no  indication  of  its  having  been  submitted  to  others.  It  also  bears 
internal  evidence  of  being  a  reliable  statement  of  the  facts. 


THE  DREYFUS  CASE  OF  AMERICA  181 

change  occurred  at  the  masthead  of  the  two  publications  and  upon 
the  stationery  of  both  companies. 

A  sworn  statement  of  circulation  of  the  Woman's  Farm  Journal 
was  required  of  the  publishers  in  February,  1902.  The  editors  were 
said  to  be  Lewis  and  Mr.  and  Mrs.  Cabot.  The  Journal  was  repre- 
sented as  independent  of  any  trade,  and  open  to  all  forms  of  adver- 
tising, except  medical.  The  proprietors  were  said  not  to  be  inter- 
ested in  any  advertising  in  its  columns  except  that  of  the  Pacific 
Trading  Company.  This  was  said  to  pay  the  same  as  others.  A 
total  subscription  of  two  hundred  and  sixty-two  thousand  copies 
each  issue  was  claimed,  at  a  subscription  price  of  twenty-five  cents 
per  annum.  The  number  of  sam.ple  copies  of  each  issue  was  stated 
as  ten  thousand.  These  were  said  to  be  sent  out  only  at  the  request 
of  present  subscriptions  and  club  raisers. 

Various  financial  statements  were  submitted  from  time  to  time 
during  the  summer  of  1902  when  business  was  dull  and  additional 
credit  was  required,  to  Lewis'  banks,  the  Fourth  National  and  the 
National  Bank  of  Commerce,  both  of  St.  Louis.  These  were  ac- 
cepted, after  such  investigation  as  is  customary  with  conservative 
bankers,  as  the  basis  of  substantial  lines  of  discount.  Lewis  had 
apparently  made  good  as  a  publisher,  and  won  for  himself  an  as- 
sured position  as  a  substantial  business  man  and  citizen  of  St. 
Louis.* 

THE    ELIMINATION    OF    NICHOLS. 

The  break  with  Nichols,  which  was  fraught  with  such  disastrous 
consequences,  occurred  during  the  month  of  May,  1902.  Nichols 
was,  at  this  time,  the  owner  of  a  two-fifths  interest  in  the  Mail  Order 
Publishing  Company,  and  a  one-fifth  interest  in  the  Farm  Journal 
Publishing  Company.  His  interest  in  the  Development  and  Invest- 
ment Company  was  nominal.  This  is  Lewis'  story  to  the  Ashbrook 
Committee  as  to  how  the  final  rupture  between  the  two  men  came 
about : 

One  of  the  young  women  clerks  came  to  me  one  day  and  said  that  she 
felt  she  ought  to  tell  me  something;  that  for  months  past  Mr.  Nichols  had 
been  getting  down  to  the  office  early  in  the  mornings  to  receive  the  mail, 
and  had  taken  out  the  large  clnb  envelopes  containing  considerable  sums 
of  money,  destroying  the  subscriptions  and  keeping  the  money;  that  she 


*A  statement  of  the  Mail  Order  Publishing  Company  as  of  March,  1902,  shows  an 
increase  in  the  claimed  surplus  of  that  publication,  over  all  liabilities,  including  capital 
stock,  to  $49,000.  A  similar  statement  as  of  April  6  claims  a  surplus  increased  to 
$70,000,  due  chiefly  by  reason  of  new  subscriptions  resulting  from  cash  advertising. 
A  total  of  $72,000  cash  was  shown  to  have  been  expended  during  the  preceding  six 
months  in  advertising  for  subscriptions.  The  results  of  this  advertising  became  ap- 
parent in  the  increase  of  the  surnlus  values  of  the  j\Iail  Order  Publishing  Compan)', 
which  had  risen  to  $85,000  by  the  'first  of  May,  and  to  $90,000  in  July.  Statements  for 
the  remainder  of  the  months  of  1902  are  not  available;  but  the  statement  for  the  first 
of  January,  1903,  shov/s  a  surplus  of  $90,000,  exclusive  of  the  cash  value  of  subscrip- 
tion list  now  estimated  at  $250,000;  or  in  excess  of  $300,000,  all  told. 

Advertising  contracts  were  in  hand  at  the  beginning  of  1903  for  the  ensuing  year 
to  the  amount  of  over  $250,000.  There  was  estimated  a  probable  subscription  revenue 
for  the  year  at  approximately  $100,000,  and  the  current  advertising  running  without 
contract  at  the  same  figure,  or  a  total  estimated  income  in  excess  of  $400,000.  The 
total  cost  of  producing  the  paper  for  a  year  was  estimated  a*:  $180,000,  showing  upoa 
that  basis  a  prospective  profit  of  approximately  $250,000  for  1903. 


182  THE  SIEGE  OF  UNIVERSITY  CITY 

had  seen  him  do  this  several  times;  that  if  I  would  look  in  the  bottom  of 
l)is  desk  then,  I  would  find  some  en\'elopes  that  lie  had  ready  to  take  home 
that  night.  He  was  out  at  the  time,  and  I  did  look  in  his  desk.  Then  I 
waited  for  him  to  come  in.  In  the  meantime  I  stepped  out  for  a  few  mo- 
ments. During  my  absence  he  came  in,  found  out  what  had  happened,  left 
the  office,  and  never  came  back.  Since  that  time  he  has  been  a  very  bitter 
enemy.  I  understand  that  he  is  the  source  of  a  large  part  of  this  misin- 
formation.    He  is  now  in  St.  Louis  selling  a  hair-dye  preparation. 

Nichols'  version. 

This  in  substance,  is  Mr.  Nichols'  version: 

We  were  in  the  street  car  one  day  going  home  when  Mr.  Lewis  said 
one  man  ought  to  run  the  business.  I  said,  "Ned,  it  looks  like  you  have  all 
the  say-so.  Everything  is  done  just  as  if  it  were  your  own."  He  said. 
"Yes,  I  know;  but  every  time  I  get  up  a  scheme,  you  knock  it  on  the  head." 
1  said,  "Ned,  your  schemes  are  so  harum-scarum  that  they  might  get  us 
into  trouble."  He  said,  "I  want  to  run  that  subscription  list  up."  I  said, 
"If  we  do  that,  we  have  got  to  spend  fifty  or  sixty  thousand  dollars  with 
the  Nelson  Chesman  Companj'  and  we  will  be  swamped." 

He  thought  for  awhile  and  then  said,  "Nick,  what  will  you  take  for  your 
stock?"  I  said,  "I  will  not  take  anything  for  it,  Ned.  I  tell  you  what  Til 
do.  If  you  want  to  run  the  whole  thing,  I  will  give  you  power  of  attorney 
and  j'ou  can  run  it  to  suit  yourself.  I  will  take  orders  from  you;  or  what- 
ever you  saj%  I  will  just  turn  the  business  over  to  you,  and  if  j^ou  bring 
the  thing  out  of  a  hole,  and  make  good,  it  will  be  the  greatest  thing  you 
ever  did." 

That  very  night  he  came  to  my  heme  and  said  he  wanted  to  talk  the 
busmess  over.  I  said,  "All  right,  Ned,  what  will  you  do?"  He  said,  "I 
uill  pay  you  seventy-five  dollars  a  week."  I  was  only  getting  fifty  dollars, 
and  not  always  getting  that. 

Well,  that  is  what  he  wanted  me  to  do.  To  go  on  just  in  the  same  way 
we  had  been  doing,  but  with  him  as  sole  owner.  I  said,  "No;  I  have  been 
king  here  too  long.  I  have  ruled  this  place  just  like  a  czar;  and  I  don't 
believe,  Ned,  that  I  can  work  for  you."  He  said,  "Then  you  take  the  Win- 
ner, or  the  AVoman's  Farm  Journal.  I  will  take  whichever  one  you  don't 
lake,  and  we  will  separate."  I  said,  "No;  if  we  separate,  let  us  do  it  com- 
))letel}'."  He  said,  "What  are  you  going  to  do?"  I  said,  "I  will  take  the 
Pacific  Trading  Company."  This  was  a  joint  enterprise  owned  by  Mr. 
Lewis,  Mr.  Cabot  and  myself,  and  Mr.  Duby,  the  chemist,  for  selling  patent 
medicines,  including  the  hair  dye.  "Well,"  he  says,  "that  is  just  the  thing. 
I  will  run  the  two  magazines,  and  you  Can  run  the  Pacific  Trading  Com- 
pany." I  had  a  little  too  much  pride,  probaiily;  but  I  said,  "Ned,  I  will 
make  that  business  make  itself.  I  know  the  patent  medicine  business  from 
A  to  Z,  but  I  don't  know  the  publishing  business."  So  I  said,  "I  bet  you 
dinners  for  two,  that  I  will  have  more  money  in  five  years  than  j'ou  will 
have."     I  would  have  lost  that  bet,  if  he  had  taken  it. 

So  I  stayed  there  pretty  near  two  weeks.  I  signed  up  all  the  stock  that 
Mr.  Lewis  presented  to  me.  He  said,  "Nick,  this  is  your  old  stock.  You 
sign  over  the  Woman's  Farm  Journal  stock  to  me  and  I  will  sign  over  the 
Pacific  Trading  Company  stock  to  you."  I  said,  "All  right,  Ned.  Give 
me  a  thousand  dollars  on  the  old  account."  I  remember  signing  my  stock 
over  to  him  and  he  to  me.  He  assigned  me  the  stock  for  the  Pacific  Trad- 
ing Company.  I  assigned  to  him  the  stock  of  the  Magazine.  There  was  an 
arrangement  and  the  matter  was  settled  amicably,  and  carried  out  in  good 
laith. 

ATTITUDE    OF    NICHOLS. 

The  reason  I  severed  my  connection  with  him  I  will  put  this  way.  I  kept 
arguing  with  Mr.  Lewis  to  drop  some  of  the  things  he  had  on  foot.  The 
Diamond   Candy   Company,   the   Progressive   Watch   Company,   and   so   on. 


THE  DREYFUS  CASE  OF  AMERICA  188 

were  out  of  business.  The  Development  and  Investment  Company  and  the 
Coin  Controller  Company  were  in  business.  But  we  had  half  a  dozen  other 
things  in  mind  that  we  were  talking  about.  One  of  them  was  the  Univer- 
sity Heights  Company.  He  had  that  scheme  in  hand,  and  I  did  not  like  it 
I  told  him  it  was  not  proper  and  not  right,  and  that  I  really  did  not  care 
to  go  into  it.  He  also  had  on  foot  this  proposition  of  putting  up  a  great 
big  building,  as  he  did  do  afterv/ard.  But  from  my  view  of  the  business 
at  the  time,  I  could  not  see  where  he  could  get  the  money.  I  knew  that 
the  contractors  would  want  their  money  promptly.  I  do  not  know  what 
he  might  have  had  in  mind  about  acquiring  the  money  with  which  to  build 
that  building.  But  I  did  not  see  where  the  money  could  come  from  as 
quickly  as  the  contractors  would  need  it.  I  knew  at  the  time  we  didn't 
have  the  money  to  buy  one  acre  of  ground,  much  less  ten  or  fifteen  acres, 
and  put  up  a  building. 

I  don't  say  that  I  cont3mp]ated  severing  my  connection  with  ]Mr.  Lewis 
because  he  was  thinking  about  this  thing.  But  I  say  this:  If  j'ou  had  been 
associated  with  Mr.  Lewis  inthnately  for  three  or  four  years  and  had  no 
faith  in  some  of  the  schemes  that  he  proposed  to  you,  you,  also,  would 
have  been  rather  timid  about  staying  with  him.  I  am  afraid  to  say  that 
he  was  as  full  of  schemes  as  a  dog  is  of  fleas,  because  some  of  the  Com- 
mittee might  take  exception  to  this  way  of  putting  it,  and  I  do  not  want 
to  appear  fresh. 

Lewis'  story  touching  the  accusation  of  an  employee  that  Nichols 
was  abstracting  money  from  the  subscription  mails  is  recited  with- 
out prejudice,  solely  because  it  is  essential  to  a  proper  understand- 
ing of  what  follows.  Lewis  admits  that  the  charges  were  not 
made  the  basis  of  either  civil  or  criminal  proceedings.  Nichols 
strenuously  denies  any  wrongdoing.  The  sole  fact  of  public  in- 
terest is  that  Nichols  felt  himself  to  be  aggrieved  and,  later,  sought 
revenge  by  becoming  an  informer  against  Lewis  and  all  his  enter- 
prises. The  versions  of  both  Lewis  and  Nichols  as  to  the  severance 
of  their  relations  are  now  before  the  reader,  who  is  thus  in  a  posi- 
tion to  draw  his  own  conclusions. 

The  Winner  was  now  successfully  financed.  It  had  turned  the 
corner  from  investment  to  profit,  and  was  in  a  position  to  make 
money  rapidly.  Lewis,  through  the  Development  and  Investment 
Company,  was  reaching  out  for  further  investments,  looking  to 
quick  profits.  He  was  prepared  to  take  speculative  risks  of  which 
Nichols  was  fearful.  It  was  thus  evident,  apart  from  Lewis'  lack 
of  confidence  in  Nichols,  growing  out  of  any  suspicions  he  may 
have  had,  and  other  circumstances,  that  the  differences  of  opinion 
between  the  two  men  as  to  future  policies  were  irreconcilable. 

The  final  transfer  of  Nichols'  holdings  in  the  Farm  Journal  Pub- 
lishing Company  was  made  on  September  12,  1902.  His  stock 
was  then  assigned  by  him  to  Lewis,  and  by  the  latter  to  the  Devel- 
opment and  Investment  Company.  Lewis,  upon  the  same  date,  also 
assigned  to  the  Development  and  Investment  Company  his  entire 
holdings  of  two  hundred  and  seventy-five  shares  in  the  Mail  Order 
Publishing  Company.  This  is  the  last  appearance  of  Nichols  in 
any  official  relation  with  Lewis'  enterprises. 

The  withdrawal  of  Nichols  gave  rise  to  a  complete  reorganiza- 
tion of  the  Mail  Order  Publishing  Company.     On  April  15,  Messrs. 


]84.  THE  SIEGE  OF  UNIVERSITY  CITY 

Garnett  &  Allen  had  purchased  a  one-tenth  interest  in  the  Winner 
and  were  admitted  to  the  corporation.  On  the  8th  of  May  a  stock- 
holders' meeting  took  place.  A  new  election  of  officers  was  held. 
F.  J.  Cabot,  former  publisher,  now  editor  of  the  Woman's  Farn\ 
Journal,  became  secretary  in  Nichols'  stead.  All  outstanding  shares 
of  stock  were  cancelled.  The  stockholdings  of  the  Company  were 
then  redistributed  on  the  following  basis:  Cabot,  one  hundred 
shares;  Lewis,  one  hundred  seventy-five;  Kramer,  seventy-five; 
Allen,  one  hundred;  Garnett,  fifty.  The  ownership  of  the  ]Mad 
Order  Publishing  Company  thereafter  remained  substantially  un- 
changed until  its  merger  in  the  Lewis  Publishing  Company,  under 
circumstances  next  to  be  described. 

NEW    BUSINESS    AFFILIATIONS. 

We  have  now  seen  how  Lewis  obtained  his  first  real  start  by 
securing,  within  thirty  days,  cash  capital  amounting  to  fifteen  thou- 
sand dollars,  financiug  therewith  purchases  amounting  to  upwards 
of  twenty-five  thousand  dollars,  and  still  retaining  possession  in 
cash  of  sums  sufficient  to  provide  working  capital  for  both  of  his 
new  enterprises.  He  Avas  now  in  full  control  of  the  Mail  Order 
Publishing  Company  and  Farm  Journal  Company.  By  stress  of 
personality,  he  was  also  the  dominant  factor  of  the  Richarz  Press- 
rooms Company,  which  was  practically  monopolized  by  his  pub- 
lications. The  deals  thus  consummated  had  been  made  with  prac- 
tical business  men  of  high  character.  The  presumption  is,  there- 
fore, conclusive,  that  Lewis'  publications  were  well  regarded  in  the 
trade,  even  at  this  early  date.  His  personal  character  and  reputa- 
tion as  a  business  man  must,  also,  have  been  good  to  enable  him  to 
negotiate  these  contracts.  He  had  severed  the  last  vital  link  be- 
tween himself  and  his  former  line  of  business  by  turning  over  to 
Nichols  the  Pacifi.c  Trading  Company  in  exchange  for  the  latter's 
interest  in  his  publications.  In  place  of  Nichols,  he  had  secured, 
as  business  associates,  men  of  standing  in  the  publishing  industry 
and  closely  allied  trades.  As  his  credit  became  established  he  had 
formed  valuable  banking  connections.  His  acquaintances  and 
friendships  with  influential  St.  Louisnns  multiplied.  His  business 
and  personal  reputation  as  a  citizen  had  grown  apace.  And  all  of 
this  had  taken  place  within  two  years  after  the  first  publication  of 
the  Winner. 

THE    VISION    OF    THE    WORLd's    FAIR. 

Then  came  over  men's  minds  for  the  first  time  in  St.  Louis  the 
vision  of  a  great  ideal,  the  Louisiana  Purchase  Exposition.  The 
horizon  of  achievement  was  at  once  seen  to  be  widened  in  every 
direction.  The  effect  upon  Lewis'  mind  was  almost  magical.  His 
own  horizon  expanded  with  a  bound.  An  international  exposition 
is  a  great  promotion  scheme.  Such  a  project  carried  with  it  a  kind 
of  intoxication  to  which  the  most  sober-minded  citizen  is  liable. 
Lewis,  a  promoter  by  temperament,  reacted  to  it  as  to  his  natural 
element.     The  World's  Fair  became  the  central  image  about  which 


THE  DREYFUS  CASE  OF  AMERICA  185 

clustered  all  his  thoughts  and  dreams.  The  Woman's  Magazine 
was  perhaps  the  first  periodical  of  national  circulation  to  take  up 
the  Fair  as  an  editorial  topic.  Lewis  placed  himself  in  touch  witli 
the  authorities  almost  immediately  after  it  was  announced,  and  at 
once  opened  his  columns  as  a  medium  of  national  publicity.  Hardly 
an  issue  of  the  Woman's  IVIagazine  appeared  from  that  time  for- 
ward without  some  advocacy  of  the  coming  exposition.  Imme- 
diately letters  began  to  pour  in  from  Lewis'  subscribers  announc- 
ing the  intention  of  making  their  trip  to  the  World's  Fair  the  occa- 
sion of  a  jDcrsonal  visit  to  the  editor.  All  sorts  of  questions  were 
asked  by  readers.  Many  wanted  to  know  about  accommodations  at 
St.  Louis.  Others  asked  about  the  cost  and  other  details  of  trans- 
portation. Still  others  inquired  about  seasonal  and  other  local  con- 
ditions. The  office  of  the  Woman's  Magazine  soon  became  a  veri- 
table bureau  of  information. 

Lewis  was  quick  to  recognize  the  opportunity  of  earning  the  life- 
long friendship  of  a  multitude  of  his  most  prosperous  and  ener- 
getic readers.  Brooding  over  the  matter,  he  came  to  see  that  the 
advantage  enjoyed  by  the  Winner  of  being  located  at  the  World's 
Fair  city  would  be  immeasurably  enhanced  if  he  could  place  himself 
in  close  proximity  to  the  site  of  the  Exposition.  When  the 
determination  was  reached  to  locate  the  fair  grounds  at  the  western 
extremity  of  Forest  Park,  his  thoughts  turned  at  once  in  that  direc- 
tion. The  emphasis  laid  by  the  promoters  upon  the  architectural 
features  of  the  Fair  arrested  Lewis'  attention.  The  great  variety 
of  architectural  designs  submitted  by  the  authorities  for  publication 
in  the  Winner,  stimulated  his  imagination.  The  total  effect  of  these 
thoughts  and  ideas  culminated  in  a  project,  the  successful  issue  of 
which  is  among  the  most  stupendous  achievements  in  the  entire 
history  of  journalism. 

Lewis,  in  fact,  determined  to  take  possession  of  the  entire 
machinery  of  publicity  of  the  great  Louisiana  Purchase  Exposition, 
and  transmute  it  into  a  means  of  promoting  his  two  publications. 
He  resolved  to  purchase  a  location  adjacent  to  the  fair  grounds 
and  erect  there  a  structure  equal  in  stateliness  and  beauty  to  the 
World's  Fair  buildings  themselves.  He  determined  not  merely  to 
advise  his  readers  about  securing  accommodations,  but  to  entertain 
them  as  his  guests.  He  devised  a  project  for  promoting  the  attend- 
ance to  the  Exposition  itself,  which  was  also  to  afford  him  a  sub- 
stantial revenue.  The  mere  conception  of  these  schemes  would 
characterize  Lewis  as  a  daring  and  original  genius.  The  actual 
realization  of  them  stamps  him  as  a  shrewd  and  sagacious  man  of 
large  affairs. 

The  entire  design  must  have  seemed  to  the  friends  who  could  re- 
member the  occasion  of  his  first  coming  to  St.  Louis  as  a  vendor  of 
Anti-Skeet,  and  his  early  struggles  to  secure  a  foothold,  as  little 
short  of  madness.  Yet  Lewis  ajDpears  to  have  set  about  the  job 
without   the   slightest  misgiving.     A  suitable   site   had  to  be  pur- 


186  THE  SIEGE  OF  UNIVERSITY  CITY 

chased.  The  building  itself  was  j'et  to  be  designed.  The  project 
must  needs  be  adequately  financed.  To  accomplish  these  results, 
the  co-operation  of  all  the  various  enterprises  with  which  he  was 
connected  must  be  assured.  To  this  end,  Lewis  conceived  the  idea 
of  a  consolidation  of  all  his  publishing  interests  into  a  single  com- 
pan}^     And  thus  the   Lewis  Publisliing  Company  was  born. 

The  efficient  instrument,  by  means  of  which  Lewis  worked  out 
the  financial  and  other  problems  with  which  he  was  confronted  at 
the  various  stages  of  this  great  enterprise,  was  the  Development 
and  Investment  Company.  We  must  therefore  now  describe  the 
combination  of  circumstances  which  gave  rise  to  this  concern,  the 
manner  of  its  organization,  and  the  purpose  for  which  it  was  in- 
tended. The  organization  of  the  Lewis  Publishing  Company,  the 
purchase  of  the  tract  of  land  which  became  the  nucleus  of  Uni- 
versity City,  the  story  of  the  World's  Fair  Contest  Company,  and 
of  Camp  Lewis,  will  all  then  fall  naturally  into  place  among  the 
other  projects  of  which  the  Development  and  Investment  Company 
was  the  patron  and  promoter.  This  concern,  as  will  be  seen,  was 
designed  by  Lewis  as  a  holding  company  for  all  his  various  in- 
terests and  was  often  described  by  Lewis  as  himself  capitalized; 
hence  the  title  of  a  succeeding  chapter. 


CHAPTER  VIII. 
INVENTION  AND  PROMOTION. 
Lewis  as  Artist,  Artisan  and   Inventor — The  Lewis  Address- 
ing  Machine   Company — The   Allen   Steam   Trap   Com- 
pany— The     Controller     Company     of     America — The 
United  States  Fibre  Stopper  Company — The  First  Stock 
Put  on  the  Market — The  Question  of  Good  Faith — The 
Fibre  Stopper  Company  Under  the  Probe. 
The  phase  of  Lewis'  career  which  makes  it  so  complex  as  to  be 
the  despair  alike  of  biographer  and  reader,  is  his  astounding  ver- 
satility.    No  sooner  has  one  mastered  the  chain  of  reasoning  and 
the  series  of  events  by  which  Lewis  made  the  Winner  IMagazine  a 
valuable  piece  of  property,  than  it  becomes  necessary  to  investigate 
what  he  was  doing  at  the  same  time  as  an  inventor  and  promoter 
of  inventions.     When  these  complex  affairs  are  cleared  up,  one  is 
confronted    with   his   extensive    real   estate    and   building    projects. 
Nor  is  this  all.     For  the  sequel  shows  that  the  germs  of  his  still 
later  ideals  and  conceptions  of  a  City  Beautiful,  such  as  he  sought 
to  realize  through  the  American  Woman's  League  and  the  People's 
University,  were  even  then  looming  on  the  horizon  of  his  thoughts. 
We  have  considered  Lewis  as  vendor  of  proprietary  articles  and  as 
publisher.    We  have  now  to  view  him  in  the  role  of  an  inventor  and 
promoter  of  mechanical  devices. 

LEWIS    AS     artist,     ARTISAN     AND     INVENTOR. 

Lewis  was  drawn  along  the  path  which  led  to  his  wide  activities 
as  promoter  by  his  innate  bent  toward  all  forms  of  skill  in  artisan- 
ship  and  mechanics.  From  boyhood  he  has  been  able  to  do  almost 
anj^thing  with  his  fingers  that  human  hands  can  do.  Very  early 
in  life  he  picked  up  a  working  knowledge  of  taxidermy  and  in  time 
became  an  expert  taxidermist.  He  has  always  been  an  amateur 
artist  and  designer  of  no  mean  skill.  Right  in  the  middle  of  his 
fight  with  the  Government  he  turned  the  chickens  out  of  an  old  hen 
house,  put  in  a  potter's  wheel  and  taught  himself  the  extremely 
difficult  art  of  molding,  decorating,  and  firing  porcelain,  with  no 
other  assistance  than  the  textbook  of  the  great  French  ceramic 
decorator,  Taxile  Doat.  -Time  and  experience  have  made  Lewis  a 
master  of  many  arts  and  forms  of  material.  Wood,  iron,  concrete. 
clay,  brick,  stone,  porcelain,  wood-pulp,  wax,  cork,  he  has  tried 
them  all,  harnessed,  shaped  and  put  them  to  use  to  make  money 
for  himself  and  others.  He  has  gone  on  to  work  with  real  estate, 
banking,  notes,  bonds,  education,  and  the  ideals  of  men  and  wom- 
en.    The  plastic  touch  with  which  he  has  modeled  porcelain  has 

187 


188  THE  SIEGE  OF  UNIVERSITY  CITY 

also  altered  the  very  face  of  nature.  It  has  removed  hills,  laid 
highwaj^s  and  brought  into  shape  magnificent  buildings  and  their 
equipment.  Even  the  organization  of  companies,  corporations, 
leagues  and  universities  are  only  the  application  of  the  same  innate 
aptitudes  to  his  relationships  with  men  and  women. 

This  natural  and  acquired  ability  to  give  expression  to  the  prod- 
ucts of  his  mind  in  the  form  of  sketches  and  models,  gives  a  clue 
to  one  of  those  profound  and  characteristic  insights  Avhereby  Lewis 
has  been  able  to  move  and  influence  great  masses  of  men  and  wom- 
en almost  at  his  will.  For  his  OAvn  instincts  have  enabled  him  to 
penetrate  the  secret  that  the  masses  of  mankind  are  wont  to  think 
in  concrete  images.  A  model  or  picture  is  far  more  eloquent  to 
the  common  mind  than  any  form  of  argument.  Acting  upon  this 
insight,  Lewis  lias  told  his  story  in  terms  of  clay,  brick  and  marble, 
in  such  fashion  that  he  who  runs  may  read.  The  illustrations  to 
this  volume  testify  that  the  entire  history  of  University  City  can 
be  recorded  by  the  photographic  lens.  The  octagonal  tower  was 
first  modeled  by  Lewis  himself,  then  by  a  professional  modeler, 
and  afterwards  built  in  actuality.  Under  the  great  marble  stair- 
way, which  is  the  central  feature  of  the  tower,  is  the  remarkable 
model  of  the  University  City  plaza,  illustrated  on  another  page. 
This  shows  the  entire  group  of  buildings  embodied  in  Lewis'  ideal 
conception.  This  model  is  in  a  high  degree  symbolic  of  the  creative 
and  constructive  bent  of  his  imagination. 

LEWIS    AS    INVENTOR. 

Except  for  the  discovery  of  his  superior  business  sagacity,  Lewis 
would  doubtless  have  sought  a  career  for  himself  as  an  inventor. 
His  name  does  in  fact  appear  upon  the  rolls  of  the  patent  offices 
of  a  half-score  different  countries.  While  a  mere  boy  he  patented 
a  nickel-in-the-slot  vending  machine.  He  adapted  the  same  prin- 
ciple later  to  the  fi.rst  model  of  the  coin  controller  for  the  telephone 
call  station,  which  was  really  his  own  invention.  The  difficulty  of 
addressing  by  hand  the  enormous  nmnber  of  wrappers  required  for 
the  Winner,  provoked  in  his  fertile  brain  the  device  afterwards 
patented  as  the  Lewis  addi'essing  machine,  the  forerunner  of  many 
widely  used  instruments. 

THE    LEWIS    ADDRESSING    MACHINE    COMPANY. 

Lewis  has  always  been  by  nature  sympathetic  toward  inventors 
and  appreciative  of  mechanical  devices.  The  first  device  that  he 
tried  to  make  for  sale,  grew  out  of  his  publication  business,  being 
no  other  than  the  addressing  machine  above  mentioned.  Lewis 
himself  tells  the  story  in  the  following  language: 

At  the  time  the  Lewis  Addressing  Machine  Company  was  formed  1  had 
very  little  capital.  I  was  just  beginning  to  estahlish  a  hanking  credit.  The 
circulation  of  tlie  AV^inner  Magazine  was  growing  rapidly  and  one  of  the 
chief  problems  was  the  addressing  by  hand  of  more  than  a  million  wrap- 
pers every  month.  One  night  while  I  was  on  a  train  traveling  to  Chicago 
the  idea  struck  me  of  using  what  is  known  as  hectograph  or  stencil  paper, 
br  means  of  a  mechanical  device  afterwards  perfected   in  this  machine. 


THE  DREYFUS  CASE  OF  AMERICA  189 

When  I  got  to  Chicago  I  spoke  to  several  newspaper  men  friends  of  mine 
about  the  matter,  especiallj^  George  Krogness.  They  became  intensely  in- 
terested. We  decided  that  we  would  put  the  idea  to  a  test.  So  I  went  out 
and  bought  one  of  the  small  clothes-wringers  such  as  are  sold  to  children, 
and  some  hectograph  paper,  and  we  made  a  demonstration  then  and  there. 
We  decided  that  the  idea  was  patentable,  and  concluded  to  perfect  the 
device  and  put  it  on  the  market.  Three  of  us  put  up  a  thousand  dollars 
each  and  formed  a  company.  I  took  out  the  patents.  They  are,  I  believe, 
the  pioneer  patents  in  the  addressing  macliine  business.  I  concluded,  later, 
that  I  should  not  have  time  to  follow  up  the  matter.  I,  therefore,  bought 
back  the  interest  from  my  two  associates  for  two  thousand  dollars  each. 
In  other  words,  I  paid  them  two  for  one.  Then  I  suspended  operations. 
I  still  own  the  patents  and  am  the  sole  stockholder.  No  one  was  defrauded 
there. 

Lewis'  recollection  of  this  affair  after  eleven  years^  while  sub- 
stantially correct,  is  not  quite  accurate  in  detail.  The  original 
memorandum  of  agreement  between  himself  and  his  two  associates 
bears  date  of  November  10,  1899,  some  eleven  months  after  the 
Winner  was  established.  Lewis'  partners  were  W.  T.  Davis  and 
C.  George  Krogness,  friends  whose  acquaintance  had  been  formed 
by  him  while  soliciting  advertisements  for  the  Winner.  The  ori- 
ginal document  recites  that  for  the  sum  of  one  thousand  dollars 
Lewis,  "as  owner  of  the  invention  knov/n  as  the  addressing  machine 
which  he  is  now  perfecting,"  sells  a  half  interest  in  any  patents  he 
may  procure.  He  also  agrees  to  give  as  a  bonus  eleven  hundred 
lines  of  advertising  space  in  the  Winner. 

The  Lewis  Addressing  Machine  Company  was  formally  incorpo- 
rated and  the  first  shares  issued  in  May  of  1900.  Patents  were 
secured  in  Canada,  England,  France  and  Germany,  as  well  as  in 
the  United  States.  The  cost  for  this  item  alone  was  nearly  a  thou- 
sand dollars.  The  first  model  was  built  by  Rudolph  Goeb  (an  ex- 
pert mechanic  of  whom  we  shall  hear  again,  then  in  the  employ 
of  Munn  &  Co.  of  St.  Louis),  during  the  last  three  months  of 
the  year  1900.  The  machine  was  remodeled  by  Goeb  after  Lewis' 
suggestions  between  the  months  of  April  and  November,  1901. 
Various  mechanical  difficulties  and  the  fact  that  Lewis'  time  was 
taken  up  by  other  interests,  then  led  him  to  suspend  further  opera- 
tions. The  resignation  of  his  associates  as  directors  in  the  enter- 
prise were  received  in  November,  1901.  His  note  for  three  thou- 
sand dollars  in  their  favor  in  full  payment  for  their  interest,  bears 
date  of  December  4,  that  year.  The  cancelled  vouchers  still  remain 
in  Lewis'  file  as  evidence  of  his  good  faith.  Lewis'  first  promotion 
thus  netted  his  associates  three-fold  their  original  investment  in 
additon  to  a  bonus  of  advertising  space,  which  was  itself  worth  one 
thousand  dollars,  the  face  value  of  the  investment.  As  Lewis  says, 
"No  one  was  defrauded  there,"  unless  it  was  himself. 

Lewis  later  made  over  the  stock  of  the  Lewis  Addressing  Machine 
Company  to  the  Development  and  Investment  Company.  A  new 
model  was  then  perfected  and  a  final  patent  was  issued  to  Rudolph 
W.  Goeb  in  behalf  of  that  concern  as  late  as  January  25,  1910.  In 
March  of  1905  certain  postoffice  inspectors,  finding  this  stock  among 


190  THE  SIEGE  OF  UNIVERSITY  CITY 

the  assets  of  the  Development  and  Investment  Company,  submitted 
to  Lewis  a  list  of  fourteen  questions,  in  reply  to  which  he  stated 
in  substance  the  above  facts.  He  added  that  several  of  the  machines 
had  been  built  and  put  in  use  and  that,  at  one  time,  negotiations 
for  the  sale  of  the  patents  were  almost  closed  with  the  manufac- 
turers of  tlie  linotype.  The  project,  he  said,  was  being  held  back 
until  he  could  build  the  machines  on  a  large  scale  and  place  them 
on  the  market.  The  stock  was  being  carried  on  the  books  of  the 
Development  and  Investment  Company  as  of  unknown  value,  an 
asset  in  suspense.  The  clever  inspectors  upon  these  facts,  which 
they  report  in  substance  as  being  true,  recommended  that  a  fraud 
order  be  issued  against  the  company  upon  the  grounds  that  the 
machine  and  its  company  might  be  revived  and  might  then  be  used 
to  obtain  money  fraudulently.     These  are  their  "words: 

This  machine  was  invented  by  Lewis,  its  purpose  being  the  printing  of 
addresses  on  newspaper  wrappers.  Patents  were  secured,  and  C.  George 
Krogness,  of  the  San  Francisco  Examiner,  and  W.  T.  Davis,  of  the  Kan- 
sis  City  (Mo.)  Star,  purchased  an  interest.  The  machines  were  not  a  suc- 
cess, and  the  company  died  for  that  reason.  Lewis  states  that  he  repur- 
chased the  interests  of  the  two  gentlemen  mentioned  and  the  stoclt  found 
its  way  into  the  assets  of  the  Development  and  Investment  Company,  where 
it  now  rests.  The  machine  was  not  practical,  and  the  stoclc  has  no  money 
value.  Mr.  Lewis  states  that  the  whole  proposition  is  in  abeyance  and  that 
the  mails  are  not  now  used  in  furthering  the  sale  of  stock.  We  hold  the 
proposition  to  be  a  scheme  devised  for  fraudulent  purposes  and  would  not 
hesitate  to  recommend  that  a  fraud  order  be  issued,  if  there  was  evidence 
that  the  mails  were  now  being  used.  Inasmuch  as  it  is  held  in  abeyance,  its 
reapi^earance  is  liable  at  any  time  so  long  as  Mr.  Lewis  enjoys  the  second- 
class  privilege  for  the  Woman's  Magazine  and  the  Woman's  Farm  Journal. 
It  is  included  in  the  assets  of  the  Development  and  Investment  Company, 
another  fraudulent  concern,  and  for  that  reason,  that  company  still  being 
in  active  oper^ition,  we  recommend  that  E.  G.  Lewis  and  the  I-ewis  Address- 
ing Machine  Company  be  cited  to  show  cause  why  a  fraud  order  should 
not  be  issued. 

Upon  what  theory  the  inspectors  held  that  this  was  a  scheme 
"devised  for  fraudulent  purposes"  it  is  difficult  to  imagine. 

THE    ALLEN    STEAM    TRAP    COMPANY. 

The  next  device  to  be  called  to  Lewis'  attention  was  the  Allen 
steam  trap,  as  to  which  he  makes  the  following  statement: 

This  was  a  mechanical  device  for  saving  coal  in  connection  with  a  steam 
engine.  Mr.  N.  A.  McMillan,  now  president  of  the  St.  Louis  Union  Trust 
Company,  was  an  intimate  friend  of  mine.  He  extended  a  large  banking 
credit  to  me  and  also  gave  me  personal  credit.  He  was  always  my  last 
resource.  When  I  had  borrowed  all  the  money  I  could  from  the  banks  to 
carry  out  some  exceptionally  large  deal  or  enterprise,  I  could  always  get 
an  extra  sum  from  Mr.  McMillan. 

He  called  me  into  the  bank  one  day  and  told  me  of  a  little  patent,  the 
Allen  steam  trap,  which  the  inventor  had  brought  to  his  attention.  He  told 
me  if  I  would  look  at  it,  and  if  I  thought  it  good,  that  he  would  join  me 
in  a  company  to  develop  and  put  it  on  the  market.  He  suggested  that 
we  each  put  a  couple  of  thousand  dollars  into  it,  grubstake  the  inventor 
and  try  it  out.  We  did  this  and  carried  it  along  to  a  certain  point.  We 
then  decided  there  was  nothmg  in  it  to  warrant  giving  it  further  attention 
or  money.  We,  therefore,  both  pocketed  our  losses  and  forgot  it.  Mr. 
McMillan,  the  inventor,  and  myself  were  the  only  ones  interested  in  that. 


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THE  DREYFUS  CASE  OF  AMERICA  193 

Rudolph  Goeb,  the  mechanical  expert  employed  by  Lewis,  as 
foreman  of  his  experimental  plant,  states  that  work  on  this  device 
was  conducted  before  the  organization  of  the  Development  and 
Investment  Company  and  that  it  was  abandoned  and  the  effects  of 
the  comiDany  stored  in  his  custody  in  the  fall  of  1902.  The  reason 
stated  by  Lewis  to  Goeb  at  that  time  was  that  the  competition  of 
similar  devices  was  such  that  the  company  had  no  prospect  of  more 
than  a  ten  per  cent  profit,  which  margin  would  not  warrant  further 
financial  risk.  A  patent  on  the  steam  trap  was  granted  to  the 
inventor,  Benjamin  F.  Allen,  on  September  27,  1902. 

Meantime,  Lewis  had  become  interested  in  the  adaptation  of  the 
principle  of  his  patent  for  vending  machines  to  the  control  of  tele- 
phone instruments  as  a  device  for  measured  service.  This  was  on 
the  same  principle  as  the  coin-in-the-slot-pay-instrument,  the  use 
of  which  is  now  so  nearly  universal.  The  first  model  for  this  device 
on  lines  of  Lewis'  own  invention  was  perfected  by  Goeb  during  the 
spring  of  1901.  During  the  month  of  April  Lewis  privately,  as 
an  individual,  retained  Goeb  to  devote  his  entire  time  to  the  perfec- 
tion of  the  addressing  machine  and  telephone  controller,  apportion- 
ing the  expense  between  the  two  companies  as  best  he  could.  He 
thus  had  in  the  spring  of  1901  three  separate  mechanical  devices; 
a  steam  trap,  an  addressing  machine  and  a  telephone  controller,  in 
process  of  development.  A  number  of  his  friends  and  associates 
were  interested  with  him  financially.  The  expense  incurred  was 
already  considerable  and  it  was  apparent  that  still  more  capital 
would  soon  be  needed.  From  these  facts  sprang  simply  and  natur- 
ally the  Development  and  Investment  Company,  which  was  formed 
to  take  charge  of  and  develop  all  these  various  devices. 

During  the  year  1902,  the  brightest  prospect  of  the  Development 
and  Investment  Company  appeared  to  be  the  patents  of  the  tele- 
phone controller.  The  patents  and  processes  for  making  fibre  stop- 
pers had  also  been  acquired.  Hence,  Lewis'  experimental  plant  in 
the  newly  rented  workshop  on  the  suburban  railway  track,  was  at 
this  time  engaged  upon  no  fewer  than  four  separate  inventions. 
As  the  history  of  the  development  of  these  has  only  an  indirect 
bearing  upon  the  main  current  of  this  story,  they  will  here  be  sum- 
marily disposed  of.  Work  on  the  addressing  machine  and  the  steam 
trap  was  suspended,  as  we  have  seen,  before  the  close  of  1902.  The 
telephone  controller  device  then  for  a  time  held  the  centre  of  the 
stage. 

THE    CONTROLLER   COMPANY   OF   AMERICA. 

The  Controller  Company  of  America  was  organized  in  1901  and 
its  product  first  placed  upon  the  market  in  1902.  It  continued  in 
operation  and  appeared  to  be  on  the  eve  of  great  success  in  the  year 
1905,  when  all  at  once  Lewis'  whole  resources  became  absorbed 
with  his  controversy  with  the  Government  over  the  right  to  use  the 
mails.  The  story  of  the  coin-controlled  telephone  has  been  sum- 
marized by  Lewis  himself  as  follows; 


194  THE  SIEGE  OF  UNIVERSITY  CITY 

The  coin  controller  was  a  device  for  an  automatic  telephone  machine 
which  locked  the  receiver  until  you  dropped  in  a  nickel  and  returned  the 
nickel  if  the  connection  was  not  made.  The  inception  of  this  company 
was  in  190;2.  Slot  machines  were  then  practically  unknown.  I  was  inces- 
santly bothered  by  people  coming  into  the  building  and  using  my  telephone. 
One  daj''  the  idea  struck  me  that  sucli  persons  might  be  made  to  contribute 
their  share  of  the  cost.  As  I  studied  over  the  matter,  a  simple  device  for 
locking  the  receiver  so  that  you  could  not  get  connection  until  you  dropped 
in  a  nickel,  flashed  into  my  mind.  I  worked  this  out,  made  one,  and  at- 
tached it  to  my  phone.  It  collected  quite  a  number  of  nickels  the  first  day. 
So  I  then  stepped  over  to  the  Union  Trust  Companv  to  see  Judge  Medill, 
the  president. 

The  Judge  was  a  very  wealthy  man,  but  had  the  reputation  of  being 
very  shrewd  and  a  little  bit  "near,"  tliat  is,  conservative,  in  parting  with 
Jiis  money.  Mr.  McMillan,  who  was  then  the  cashier,  asked  me  where  I 
was  going.  I  said  I  was  going  in  to  get  the  Judge  to  give  me  a  couple  of 
thousand  dollars  for  something  I  had  in  my  pocket.  He  laughed  and  said, 
"Show  it  to  me  when  you  come  out."  I  said  I  would.  Judge  Medill  was 
taken  with  the  device  and  asked  me  what  I  was  going  to  do  with  it.  I 
told  liim  I  was  going  to  take  out  a  patent  and  sell  it  to  the  telephone  com- 
panies, or  else  attach  it  to  the  telephones  and  go  shares  with  them.  He 
agreed  to  go  in  with  me,  took  out  his  checkbook  and  wrote  a  check  on 
the  spot  for,  I  think,  two  thousand  dollars.  I  know  that  I  called  Mr.  Mc- 
Millan's attention  to  it  as  I  came  out. 

I  then  went  to  my  patent  attorneys  and  made  application  for  the  pat- 
ent. It  developed  into  a  very  effective  device.  We  decided  that  we  had  a 
pretty  good  thing.  A  great  many  of  Judge  Medill's  friends  among  the 
bankers  and  business  men  decided  to  come  in  with  us,  so  we  capitalized  a 
company  for  two  hundred  thousand  dollars.  Its  stock  was  immediately 
taken  by  the  wealthy  men  of  St.  Louis.  Nobody  came  in  that  could  not 
afford  to  take  what  he  did  purely  as  a  speculation. 

We  employed  the  best  electrical  and  mechanical  experts  and  they  evolved 
what  was  the  predecessor  of  the  modern  pay  station.  The  difference  was 
this:  The  only  pay  station  they  had  at  that  time  was  either  one  where 
you  dropped  in  a  nickel,  then  pidled  a  handle  which  rang  a  bell  to  attract 
the  operator's  attention,  or  another  patent  to  conflict  with  ours,  such  that 
you  dropped  a  nickel  and  tlie  operator  told  you  to  hang  up  the  phone  until 
she  formed  the  necessary  connection.  Even  then  she  would  have  to  hold 
the  phone  until  she  found  out  whether  you  got  the  person  you  wanted  to 
talk  to.  The  device  that  was  evolved  out  of  my  patent  was  such  that,  when 
you  dropped  the  nickel  and  central  plugged  in,  the  return  current,  if  the 
line  was  busy,  would  automatically  throw  out  your  nickel.  That  saved  so 
much  time  for  the  operator  that  she  could  handle  forty  or  fifty  calls  with 
these  machines  while  she  could  only  handle  one  with  any  other. 

The  telephone  companies  commenced  to  take  interest  in  the  matter.  We 
corresponded  with  one,  the  Maryland  Telephone  Company  of  Baltimore 
and  finally  struck  a  deal  with  them,  whereby  we  deposited  twenty-five  thou- 
sand dollars  and  acquired  the  exclusive  pay  station  rights  of  that  company. 
We  then  equipped  the  city  of  Baltimore  with  pay  stations.  When  our  con- 
trollers were  cut  in  on  the  system,  the  telephone  exchange  promptly  went 
out  of  operation.  There  was  some  difficulty  with  return  currents.  Some 
electrical  problem  still  had  to  be  solved.  Meantime,  otiier  cities  were  bid- 
ding for  it  and  one  of  the  most  prominent  stockholders,  I  think  Mr.  For- 
man,  of  the  Fourth  National  Bank  of  St.  Louis,  secured  an  option  for  us 
on  the  pay  station  rights  on  the  whole  city  of  Brooklyn. 

It  looked  like  a  very  paying  proposition.  But  it  was  going  to  take  a 
great  deal  of  money,  because  whenever  we  made  a  contract  we  had  to  equip 
a  whole  city  with  pay  stations.  Eventually  we  were  to  get  a  percentage 
of  the  revenue,  which  we  figured  out  would  give  us  a  very  profitable  monop- 


THE  DREYFUS  CASE  OF  AMERICA  195 

oly.  Some  dissension  arose  among  the  stockholders.  Some  were  for  in- 
creasing the  capital  to  a  very  large  amount,  sufficient  to  equip  all  the  cities 
which  Avanted  contracts.  Others  would  not  vote  for  increase.  The  corpo- 
ration split  up.  Practically  nothing  further  was  done.  I  do  not  remember 
what  the  final  wind-up  was,  except  that  as  an  officer  I  joined  with  one  or 
two  others  and  paid  every  bill  we  could  find  any  record  of.  Almost  all  of 
the  stockholders  were  very  wealth}^  men,  to  whom  the  whole  aiJair  was 
merely  an  incident,  but  I  went  to  a  number  of  my  personal  friends  whom 
I  had  Induced  to  join  and  bought  back  their  stock  at  one  hundred  cents 
on  the  dollar.     I  took  the  loss  myself. 

The  following  testimony  of  David  Sommers  before  the  Ashbrook 

Congressional  Committee  is  of  interest  here: 

I  remember  Mr.  Lewis  coming  to  me  and  representing  that  the  automatic 
telephone  controller  pay-station  device  in  which  he  was  interested,  was  a 
good  thing,  in  his  opinion.  He  advised  me  to  take  stock  in  it.  I  took  some 
eighteen  thousand  dollars  or  twenty  thousand  dollars  of  the  stock.  Later, 
when  the  plan  did  not  work  out  as  was  expected,  Mr.  Lewis  repaid  me 
in  full,  with  six  per  cent  interest  on  my  investment. 

Only  the  Coin  Controller  Company  of  America,  of  all  of  Lewis' 
enterprises  investigated  by  the  inspectors,  escaped  the  recommenda- 
tion of  a  fraud  order.  As,  therefore,  it  is  not  involved  in  the  en- 
suing controversy,  its  further  history  may  be  omitted.  It  will  be 
sufficient  to  say  that  a  concern  under  the  style  of  the  Coin  Con- 
troller Company  was  incorporated  under  the  laws  of  Missouri  on 
January  18,  1901,  with  a  capital  stock  of  twelve  thousand  dollars. 
The  OAvnership  was  distributed  among  Lewis'  personal  friends  and 
business  associates,  including  Kramer  and  Judge  Medill.  The  deal- 
ings in  this  stock  were  confined  to  fourteen  individuals,  all  told. 
Later,  on  April  12,  1902,  a  new  incorporation  was  formed  under 
the  style  of  the  Controller  Company  of  America  with  a  capital  stock 
of  one  hundred  and  fifty  thousand  dollars.  This  was  increased  in 
May  of  1903  to  two  hundred  thousand  dollars.  The  board  of  direc- 
tors at  this  period  included  Messrs.  Forman,  Shepley,  Edwards, 
John  A.  Lewis,  McMillan  and  Hill — all  bankers  prominently  identi- 
fied with  four  of  the  principal  banking  institutions  of  St.  Louis — 
and  a  number  of  other  well-to-do  business  men.  The  prospects  of 
the  concern  were  thought  by  its  directors  to  be  exceptionally  bright, 
but  the  attention  of  Lewis  was  distracted  by  his  troubles  with  the 
Government  and  the  company  was  soon  afterwards  disbanded. 

THE    UNITED    STATES    FIBRE    STOPPER    COMPANY. 

Early  in  the  spring  of  1902,  Lewis  was  approached  by  a  young 
man  named  Mason,  who  represented  himself  as  authorized  to  obtain 
capital  for  a  meritorious  invention.  At  Mason's  request,  in  May 
of  that  year,  Lewis  accom.panied  him  to  the  inventor's  workshop 
in  a  dingy  little  room  behind  a  plumber's  shop  in  St.  Louis.  In 
these  queer  quarters  he  was  shown  the  first  model  of  a  machine, 
which  is  illustrated  in  these  pages,  for  manufacturing  fibre  stop- 
pers. Lewis  was  strongly  attracted  by  what  seemed  to  him  the 
great  possibilities  of  this  invention.  He  at  once  proceeded  to  nego- 
tiate a  contract  with  J.  H.  Rivers,  the  inventor. 


196  THE  SJEGE  OF  UNIVERSITY  CITY 

The  machine  has  since  been  perfected  and  gives  promise  of 
ultimate  fulfillment  of  Lewis'  most  sanguine  expectations.  It  is  an 
invention  for  the  production  of  bottle  stoppers  from  felted  wood- 
pulp  fibre.  These  are  adapted  for  all  purposes  for  which  the  ordi- 
nary bark  corks  or  rubber  stoppers  are  now  employed.  They  also 
have  other  properties  peculiar  to  themselves.  The  story  of  this 
device  was  entertainingly  sketched  by  Lewis  for  the  Ashbrook 
Hearings  in  the  account  we  now  give  in  his  own  words: 

The  United  States  Fibre  Stopper  Company  is  a  company  for  making 
artificial  corks  for  bottles.  It  has  promise  of  a  wide  field  of  usefulness. 
As  to  this  company  I  will  say  that  it  is  a  favorite  child  of  mine.  I  have 
always  been  very  fond  of  mechanics.  I  have  taken  out  several  hundred 
patents  in  various  countries,  and  on  some  of  them,  different  to  most  in- 
ventors, I  have  made  money;  yes,  considerable  money.  I  am  very  fond  of 
my  mechanical  paraphernalia. 

LEWIS    AND    THE    IN\T;NT0U. 

The  United  States  Fibre  Stopper  Company  came  into  being  in  this  way: 
Somebody  came  to  me  one  day,  along  in  ISOl  or  190:3  and  said,  "Lewis,  there 
is  a  fellow  working  in  the  back  end  of  a  plumber's  shop  downtown  who  has 
been  working  for  several  years  on  an  idea,  which  I  believe  is  one  of  the  big- 
gest things  in  America."  I  said,  "All  right;  I'll  go  and  see  him."  I  went, 
{i.nd  found  the  man  working  by  the  light  of  a  candle,  at  night,  on  a  process 
and  machine  for  making  stoppers  out  of  ground  wood-pulp,  out  of  waste 
paper,  in  fact.  It  struck  me  it  might  be  a  valuable  adjunct  to  my  pub- 
lishing enterprise — we  had  a  great  deal  of  waste  paper  which  is  nearlj'  all 
wood-pulp.  I  went  into  the  matter  and  offered  to  help  the  inventor.  He 
had  come  to  a  point  where  it  looked  to  me  as  if  he  really  had  something 
useful.  So  I  took  him  under  my  wing.  I  said :  "Here,  I'll  tell  you  what 
I  will  do  with  you.  I  will  rent  a  plant  and  equip  it  with  machinery  and 
put  you  in.  I  will  get  a  first-class  chemist  to  help  you.  If  you  need  a 
first-class  machinist,  you  shall  have  him,  too.  I  will  pay  the  bills.  You 
can  go  to  work  night  and  day  until  you  get  it  perfected.  Tiien  let  me  see 
it.  I  will  expect  some  results  within  a  reasonable  time,  because  I  am  going 
to  give  you  every  facility." 

This  I  did.  I  had  already  rented  a  two-story  workshop  on  the  Suburban 
tracks,  near  Kingshighway.  I  equipped  this  place  with  all  the  machinery 
that  he  said  he  wanted.  I  furnished  a  mechanical  laboratory;  cmplojed  an 
expert  mechanic;  engaged  the  services  of  a  chemist  and  set  them  all  to 
worlc.  They  worked  along  some  time,  but  the  macliine  did  not  get  perfected. 
I  finally  became  convinced  that  the  inventor  had  fallen  into  a  rut.  He  had 
thought  of  the  idea,  but  he  fell  down  every  time  on  the  process  for  per- 
fecting it.  Then  he  was  not  capable  of  getting  up  and  taking  a  fresh  start. 
He  did  not  go  at  it  from  a  new  angle.  He  would  start  at  the  same  place 
where  he  had  fallen.  So,  I  went  to  him  and  said:  "I  am  getting  tired  of 
this.  I  will  give  you  so  much  a  week,  provided  you  keep  out  of  the  shop. 
Then  I  will  get  the  best  machinists  and  chemists  I  can  get  in  the  United 
States,  and  we  will  see  what  they  can  do." 

PROBLEMS    OF     MANUFACTURE. 

Not  only  was  the  machine  to  be  constructed,  but  there  were  structural 
problems  connected  with  the  cork  itself.  The  wood-pulp  had  to  be  felted, 
not  simply  compressed.  If  you  compressed  it,  it  got  as  hard  as  a  stone, 
with  no  resiliency.  The  ground  pulj),  to  be  properly  felted,  had  to  be 
made  about  the  consistency  of  milk,  wliich  is  ninety  per  cent  water.  I  refer 
to  country  milk  from  the  cow.  The  water  then  had  to  be  drawn  out  of 
that  felted  stopper.  If  you  drew  it  from  the  top  and  bottom  there  was 
vertical  cleavage  after  a  time,  and  it  came  apart.  If  you  drew  the  water 
from  the  sides,  the  cleavage  was  longitudinal.     Sometimes,  after  the  cork 


1  Oo 

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taj  _^ 

^  c 

--> 

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V    r 

c 

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:^ 

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o 

t-"^ 

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Lcwu'   favorite   photograph   of   Mrs.    Lewis,   taken    by   Kajiwara,   celebrated  art  pho- 
tographer  of  St.   Louis 


THE  DREYFUS  CASE  OF  AMERICA  199 

had  dried,  it  split  lengthwise,  and  particularly  if  you  put  a  corltscrew  into 
it.     They  did  not  at  first  seem  to  be  able  to  overcome  the  difficulty. 

I  had  already  inquired  around  for  one  of  the  best  mechanical  experts 
in  the  country  and  I  had  engaged  a  young  man  named  Goeb — he  calls  him- 
f.elf  Gabe — whose  training  had  been  making  astronomical  instruments.  He 
is  one  of  those  careful  mechanists  who  take  twice  as  long  to  put  a  thing 
together  as  others  do.     But  when  it  is  done  it  will  work. 

Then  I  retained  Dr.  Gudeman,  head  chemist  of  the  Glucose  Trust  in 
Chicago,  and  handed  him  several  thousand  dollars  with  which  to  experiment. 
I  also  engaged  Prof.  Caspar!  and  did  the  same  with  him.  We  worked 
along  for  a  year,  until  finally  they  brought  the  corks  to  me,  saying,  "We 
have  perfected  the  process  and  perfected  the  machine." 

I  submitted  the  corks  in  the  form  of  discs  used  with  crown  tin  caps  for 
bottling,  to  the  Anheuser-Busch  Brewing  Company  and  they  bottled  a  lot 
of  their  goods  with  our  corks,  and  subjected  them  to  a  very  severe  test. 
They  were  very  glad  to  have  promise  of  an  artificial  cork,  because  the 
holes  in  a  bark  cork  are  full  of  tannin  and  dirt.  If  you  bottle  beer  with 
n  bark  cork,  in  a  short  time  the  tannin  dissolves,  and  puts  a  blue  streak 
through  the  beer.  Then  a  large  proportion  of  bark  corks  are  porous 
through  and  through.  If  you  cork  any  carbonated  liquid  with  them,  in  a 
short  time  it  will  become  fiat,  because  most  bark  corks  leak. 

MARKET   FOa  THE   FIBRE   STOPPER. 

If  this  artificial  cork  was  what  we  had  rejison  to  believe,  it  was  one  of 
the  largest  monopolies  in  the  world.  To  give  some  conception  of  what  it 
means,  I  will  say  that  in  Baltimore  is  the  Crown  Seal  Company,  which  has 
made  millions  of  dollars  on  the  little  metal  cap  that  goes  on  the  top  of  the 
beer  bottle.  Inside  that  cap  is  a  thin  layer  of  cork.  A  considerable  per- 
centage of  these  caps  leak  and  have  to  be  rebottled,  while  under  our  process 
the  metal  caps  absolutely  seal  the  bottle  permanently. 

I  submitted  the  stoppers  to  the  Anheuser-Busch  Company  and  they  wrote 
me  a  letter,  after  an  exhaustive  series  of  tests,  stating  that  was  the  very 
thing  they  had  been  looking  for,  and  commending  it  in  the  highest  terms. 
I  submitted  it  to  the  great  chemical  houses  and  bottling  houses  throughout 
the  United  States  and  received  everywhere  reports  commending  it.  One 
of  the  features  of  it  was  that  it  solved  the  problem  of  the  non-refiUable  bot- 
tle. We  could  make  the  cork  any  size,  shape  or  color  and  put  the  name 
and  trade  mark  on  it  without  additional  cost.  When  a  corkscrew  was  put 
into  it  this  trademark  would  be  destroyed.  The  bottle  could  not  then  be 
refilled  without  detection. 

It  was  about  this  time  that  it  became  known  throughout  the  world  that 
the  world's  supply  of  cork  bark  was  being  exhausted.  They  had  stripped 
the  cork  trees  of  Spain  to  such  an  extent,  that  each  year  the  grade  which 
had  formerly  been  second  was  advanced  to  first  grade.  It  is  now  almost 
impossible  to  get  good  cork.  This  new  process  of  ours,  if  it  was  right,  and 
successful,  gave  us  the  world's  monopoly  of  corks.  Moreover,  our  stoppers 
could  be  produced  at  about  onc-tcnth  the  cost  of  bark  corks. 

A    MILLION-DOLLAR    COMPANY. 

It  looked  pretty  good  to  me.  I  had  spent  a  great  deal  of  money  devel- 
oping it.  But  I  was  satisfied  from  the  reports  that  we  had  succeeded  in 
perfecting  it.  So  at  last  we  incorporated  it  for  a  million  dollars.  This 
was  in  1903.  I  had  it  patented  all  over  the  world  except  in  Scandinavia 
and  Russia.  I  took  ptitents  in  Mexico,  Canada,  tlie  United  States,  France, 
England,  Germany,  and  I  believe  Australia — almost  the  entire  world — the 
patents  running  from  ten  to  twelve  up  to  sixty,  even  eighty,  years  in  some 
countries.  Our  patents  were  the  pioneer  patents  throughout  the  world. 
I  came  across  only  one  other  patent  of  the  same  nature.  That  was  the 
Holmes  patent  in  the  United  States,  which  was  an  attempt  to  do  the  same 
thing,  but  had  never  succeeded.  I  purchased  it  for  twenty-seven  thousand 
dollars,  in  order  to  get  it  out  of  the  way. 


200  THE  SIEGE  OF  UNIVERSITY  CITY 

One  of  the  justifications  for  incorporating  it  for  the  large  sum  of  a  mil- 
lion dollars,  was  the  fact  that  we  were  already  in  successful  negotiations 
with  large  concerns  in  foreign  countries  for  the  sale  of  the  foreign  rights. 
ZVIy  idea  was  not  to  go  into  the  sale  of  the  corks  ourselves  under  these 
patents;  but  to  lease  the  rights  in  the  different  countries  of  Europe  and 
America  for  a  sum  down  and  a  royalt)*  of  half  a  cent,  to  a  cent,  per  gross 
for  all  corks  manufactured  under  the  process.  We  had  practicallj'^  closed 
the  negotiations  to  all  intents  and  purposes  in  Germany  and  England. 
The  representative  of  the  German  firm  had  traveled  as  far  as  New  York 
to  see  us.  One  proposal  from  a  big  paper  house  had  got  down  to  a  figure 
of  a  quarter  of  a  million  dollars  for  the  German  rights  in  Germany,  cash, 
and  a  royalty  of  half  a  cent  a  gross.  The  German  patents  are  guaranteed 
by  the  German  Government.  You  do  not  have  to  fight  for  your  patent 
tliere.  Once  it  is  granted,  the  German  Government  protects  it  and  guar- 
antees it.  Tlie  deal  for  England,  as  I  remember,  was  for  half  a  million 
dollars,  and  the  question  in  dispute  was  whether  the  contract  should  include 
the  British  colonies. 

MARKETING    THE    STOCK. 

The  company  was  already  incorporated.  We  had  sold  about  one  hun- 
dred thousand  dollars  of  stock  at  par  and  two  hundred  thousand  dollars 
of  it  had  gone  to  the  inventor.  The  price  soon  went  up  to  double,  that  is, 
two  dollars  for  a  dollar  share,  because  bids  for  it  were  coming  in  from 
the  cork  manufacturing  companies.  The  great  ijulk  of  stock  was,  in  fact, 
purchased  by  cork  concerns,  and  users  of  corks.  I  was  president  of  the 
company.  I  wanted  to  sell  this  stock  to  develop  various  details  of  the  proc- 
esses, to  make  the  model  machines,  and  to  send  proper  people  over  to 
Europe  for  the  sale  of  the  foreign  rights. 

About  that  time  we  suddenly  found  out  that  we  had  not  perfected  the 
cork  after  all.  A  furtlier  mechanical  problem  had  arisen  in  the  structure 
of  the  cork.  We  found  this  out  after  we  had  sold  the  one  hundred  thou- 
sand dollars  of  stock  mentioned.    This  was  eight  or  nine  years  ago. 

Nobody  knew  about  this  media nical  defect  except  myself  and  the  machin- 
ist. As  soon  as  I  found  that  out,  I  immediately  stopped  the  sale  of  the  stock. 
I  did  not,  as  I  recollect,  accept  about  fifty  or  sevent3'-five  thousand  dollars 
that  had  been  sent  in  for  stocli.  I  refused  to  sell  any  more.  Then  I  began 
to  purchase  back  the  stock  I  had  sold.  I  have  purchased  back  all,  I  be- 
lieve, but  about  twenty  thousand  dollars.  I  don't  think  there  is  more  out- 
standing than  that.  In  some  cases,  when  I  tried  to  purchase  back  and  ex- 
plained the  circumstances,  the  purchasers  said  they  did  not  care  to  sell. 
They  asked  if  I  was  going  to  develop  it.  I  said  j^es,  and  they  said,  "That 
is  all  right,  then  we  will  stay  in."  I  paid  back  the  same  price  at  which  I 
had  sold.  In  the  last  year  or  two  I  have  not  been  able  to  buy  back,  because 
I  have  had  no  money  to  do  so.  The  inventor  had  received,  I  think,  one- 
fifth  of  the  stock  for  his  rights  and  interests  in  it.  That  stock  of  the  in- 
ventor is  what  has  been  peddled  around  and  is  somewhat  in  evidence  in  this 
controversy.  I  have  not  sold,  nor  has  anyone  connected  with  me  sold,  with 
my  knowledge,  in  recent  years,  any  of  this  stock.  None  that  I  held  myself 
has  been  sold  in  these  last  seven  or  eight  years;  and  during  that  time  I 
have  purchased  back  at  least  one  hundred  thousand  dollars'  worth. 

I  do  not  think  that  we  stated  in  our  magazine  that  we  had  sold  the  pat- 
ent rights  for  England  for  five  hundred  thousand  dollars.  I  am  not  cer- 
tain. That  can  be  seen.  But  if  it  was  a  bald  statement  that  we  had  already 
sold  them,  I  had  every  reason  to  believe  that  we  had  sold  them, 
as  the  negotiations  were  closed.  The  man  who  came  out  about 
the  English  deal — or  It  may  have  been  the  German  one — was  already  at 
New  York  and  wired  me.  I  wired  him  back  and  told  him  what  had  oc- 
curred and  then  wrote  and  told  him  the  situation,  that  I  did  not  feel  jus- 
tified in  making  the  deal  and  that  he  could  call  it  off  for  the  present,  be- 


THE  DREYFUS  CASE  OF  AMERICA  201 

cause  there  was  only  one  thing  to  do  now,  and  that  was  to  go  at  it  again 
and  see  if  we  could  not  perfect  it. 

QUALITIES  OF  THE   FIBRE   STOPPER. 

The  defect  we  discovered  was  in  the  mechanical  structure  of  the  cork. 
After  a  time  all  the  corlvs  developed  a  flaw.  We  wished  to  correct  this. 
This  was  seven  vears  ago.  It  is  now  corrected  and  we  have  perfect  fibre 
stoppers.  The  trouble  was  in  the  felting  of  the  pulp  wood  or  fibre.  The 
action  in  felting  is  peculiar.  It  is  comparatively  simple  in  making  paper, 
because  this  is  not  solid,  but  a  thin,  flat  sheet,  easily  dried  by  running 
under  pressure  through  hot  rollers.  In  the  stopper,  it  is  a  mass  and  must 
be  felted  and  dried  in  such  a  way  that  it  will  not  split  and  will  not  lose  its 
resiliency.  If  you  take  one  of  these  finished  stoppers  and  throw  it  on  the 
floor  it  will  bounce  five  feet  or  more.  This  was  the  problem,  to  preserve 
the  resiliency  and  give  it  strength.  One  of  these  corks  has  six  hundred 
times  the  strength  of  a  baric  cork. 

When  the  defect  was  developed  I  was  so  firmly  convinced  that  we  had 
one  of  the  l)est  thin;;s  in  the  industrial  world  if  it  could  be  perfected,  that 
I  immediately  doubled  the  force  at  work,  got  another  cliemist  and  then  an- 
other and  a  third.  I  got  other  expert  mechanics.  We  went  to  work  on 
that  thing  and  have  worked  at  it  without  intermission,  all  these  years,  to 
within  the  last  few  months,  in  all  eight  vears.  In  my  judgment  it  is  not 
only  now  perfected,  but  if  I  could  save  tlie  cork  company  from  the  wreck 
of  the  Siege  of  University  City,  I  believe  I  could  sell  all  those  rights  for 
enough  to  re-establish  all  our  enterprises  again,  and  pay  off  our  indebted- 
ness. 

I  will  say,  in  conclusion,  that  when  we  moved  out  to  the  coimtry  at 
University  City,  I  erected  there  a  large  new  plant,  in  a  building  one  hun- 
dred and  seventy-fi\  e  feet  by  one  hundred  and  twenty-five  feet,  three  stories 
high;  and  equipped  it  with  the  most  modern  machinery  and  a  fine  chemical 
laboratory.  This  work  has  gone  on  there  uninterruptedly  up  to  a  few 
months  ago,  up  to  the  first  part  of  this  year,  1911. 

Rivers  and  his  friends  had  incorporated  under  the  style,  the 
American  Fibre  Stopper  Company.  For  convenience  of  transfer 
Lewis  had  new  articles  of  association  drawn  up,  under  the  title, 
The  United  States  Fibre  Stopper  Company,  under  the  laws  of 
South  Dakota.  Prior  to  this,  in  order  to  provide  Avorking  capital, 
Lewis  effected  on  September  24,  1902,  the  sale  of  three  one-hun- 
dredths  of  the  stock  of  the  original  company  for  three  thousand 
dollars.  The  purchaser  was  H.  A.  Swanson,  a  heavy  advertiser  in 
the  Winner  and  Woman's  Magazine  from  the  beginning,  and  after- 
wards one  of  Lewis'  staunch  backers.  A  similar  interest  was  sold 
to  N.  A.  McMillan  of  the  St.  Louis  Union  Trust  Company.  The 
new  charter  was  granted  in  December,  1902.  The  executive  board 
of  the  American  Fibre  Stopper  Company  held  its  last  meeting  on 
December  31,  1902,  and  Rivers  was  authorized  to  assign  his  pat- 
ents and  inventions  to  the  United  States  Fibre  Company,  then  in 
process  of   formation. 

THE    FIRST    STOCK    PUT    ON   THE    MARKET. 

In  February,  1903,  an  arrangement  was  effected  with  the  Ger- 
mania  Trust  Company  of  St.  Louis  to  act  as  fiscal  agent  in  the  issue 
and  transfer  of  stock.  Instructions  were  given  them  to  issue  the 
entire  stock  to  the  Development  and  Investment  Company,  with 
the  exception  of  eighty  thousand  dollars  worth  each  to   Swanson 


202  THE  SIEGE  OF  UNIVERSITY  CITY 

and  McMillan,  and  ninety  thousand  dollars  each  to  Lewis,  who  was 
president,  and  Cabot,  his  associate,  who  was  secretary. 

The  following  transaction  was  then  carried  out.  The  trust  com- 
pany was  instructed  to  issue  and  then  to  cancel  one  certificate  of 
stock  of  par  value  of  one  hundred  and  fifty  thousand  dollars  and 
to  reissue  that  amount  of  stock  on  receipt  of  subscriptions  accom- 
panied by  cash.  The  cash  was  to  be  paid  as  follows :  ten  per  cent 
to  the  treasury  of  the  company ;  ten  per  cent  to  the  trust  company, 
for  acting  as  agent;  tlie  remainder,  eighty  per  cent,  to  be  credited 
to  the  account  of  the  Development  and  Investment  Company  as 
sales  agent  and  promoter.  The  one  hundred  and  fifty  thousand 
dollai's'  worth  of  stock  was  then  placed  on  the  market  at  par. 

Advertisements  were  inserted  in  the  Woman's  ^Magazine  and 
Farm  Journal  and  a  considerable  amount  was  subscribed  by  Lewis' 
readers.  Large  subscriptions  were  also  received  from  persons  in- 
terested in  the  cork  industry  and  persons  using  corks.  In  all,  over 
one  hundred  thousand  dollars  was  realized.  Eighty  per  cent  of 
the  sums  received  by  the  Development  and  Investment  Company  on 
these  sales  of  stock  were  available  as  gross  earnings  to  cover  the 
cost  of  sale  and  the  expense  of  promotion  and  development.  The 
surplus  over  this  expense,  if  any,  was  available  for  the  payment  of 
interest  upon  secured  indebtedness  of  the  Development  Company. 
Any  balance  could  be  applied  for  distribution  to  stockholders.  It 
can  thus  be  seen  how  tlie  Development  and  Investment  Company 
was  able  to  pay  dividends. 

Rivers  was  first  installed  in  the  experimental  plant  of  the  De- 
velopment and  Investment  Company  in  July,  1902.  He  brought 
along  from  his  former  workshop  the  parts  of  two  complete  machines, 
of  which  the  first  was  never  assembled  and  the  second  was  merely 
a  model  for  experimental  purposes.  This  obviously  required  to  be 
rebuilt  to  turn  out  a  commercial  product.  Rivers  was  sanguine  that 
he  could  reconstruct  this  model  within  thirty  days,  and  definitely 
agreed  to  do  so.  When  his  device  was  subjected  to  the  tests  of  the 
experienced  mechanics  and  chemists  employed  by  Lewis,  difficulties 
developed.  The  machine  was  not  completely  rebuilt  until  October 
10,  1903.  Two  months  more  were  spent  in  further  experimental 
work  and  changes.  Rivers  then  invited  the  directors  to  witness  a 
demonstration  of  the  machines  in  December,  1903.  This  was  the 
basis  of  a  glowing  announcement  by  Lewis  of  the  success  of  the  in- 
vention, in  the  annual  statement  of  the  Development  and  Invest- 
ment Company  for  that  year.  But,  notwithstanding  this  apparent 
success,  it  seems  that  LeAvis  was  again  misled  by  the  inventor's  state- 
ments. The  device  was  not  yet  perfect.  Further  tests  developed 
the  failure  of  Rivers'  second  model  to  turn  out  a  marketable  product. 

Rivers  was  then  dismissed,  with  his  present  of  stock,  and  the  prob- 
lem was  given  over  to  Goeb,  a  practical  mechanic,  by  whom  addi- 
tional years  of  experiment  were  necessary  to  develop  a  thoroughly 
practical  machine.     But  Lewis  had  in  the  meantime  with  his  usual 


THE  DREYFUS  CASE  OF  AMERICA  203 

optimism^  recommended  to  readers  and  friends  the  purchase  of  the 
stock  at  par.  Sales  were  made.  Large  quantities  had  been  taken. 
Negotiations  were  pending  for  the  sale  of  patent  rights  in  foreign 
countries.  Lewis  even  went  so  far  as  to  announce  in  advertisements 
in  his  publications,  the  actual  sale  of  the  English  rights  for  a  lump 
sum  of  half  a  million  dollars,  with  future  royalties  of  half  a  cent 
a  gross  of  corks. 

The  deal,  however,  did  not  go  through.  This  was  said  to  be  on 
account  of  the  sudden  discovery  of  a  further  flaw,  on  which  Lewis 
himself  stopped  the  negotiations,  though  he  asserts  that  the  minds 
of  the  negotiators  had  met  and  that  all  the  terms  of  the  future 
arrangements  had  been  agreed  upon.  It  was  upon  this  tentative 
arrangement  that  Lewis  based  the  representations  which  effected 
sales  at  one  hundred  per  cent  premium. 

Lewis  was  well  aware  that  the  United  States  Fibre  Stopper  Com- 
pany stock  was  at  this  time  a  speculative  proposition.  Legally,  the 
offering  of  this  speculative  stock  at  public  sale  through  the  Devel- 
opment and  Investment  Company  was  clearly  permissible.  Whether, 
from  an  ethical  standpoint,  Lewis,  without  plainly  pointing  out  its 
nature,  ought  to  have  recommended  its  purchase  to  his  readers,  or 
even  permitted  the  appearance  of  advertisements  of  it  in  his  pub- 
lications, is  a  question  affecting  his  good  faith,  upon  which  opinions 
differ. 

The  idea  was  good^  The  machines  were  being  made.  There  was 
undoubtedly  a  profitable  market  for  the  proposed  product.  Lewis' 
error  lay  in  his  acceptance  of  the  representations  of  Rivers'  without 
a  more  thorough  investigation  than  he  evidently  gave.  As  the  sequel 
has  shown,  he  was  misled  from  the  outset,  both  as  to  the  status  of 
the  invention  and  as  to  the  ability  of  the  inventor  to  cope  success- 
fully with  the  mechanical  and  chemical  problems  involved.  Such 
difficulties  are,  however,  inherent  in  most  good  inventions. 

Both  the  impulsive  recommendation  and  consequent  sale  of  this 
stock  were  made  on  Rivers'  unverified  promise  and  Lewis'  antici- 
patory representations  as  to  the  sale  of  English  rights,  before  con- 
tracts were  actually  in  his  hands.  These  are  examples  of  Lewis' 
overwhelming  optimism,  his  audacious  and  even  reckless  disposition 
to  venture  any  risk,  his  supreme  confidence  of  his  ability  to  make 
good  in  the  end.  Such  recklessness  in  a  business  man  is  absolutely 
unjustifiable.  Lewis  is  deserving  of  unsparing  criticism  here.  He 
stands  blameworthy  of  all  that  has  been  meted  out  to  him  for  both 
of  these  proceedings. 

THE    QUESTION    OF    GOOD    FAITH. 

Nevertheless,  evidences,  not  of  fraud,  but  rather  of  boyish  good 
faith  abound  at  every  stage.  He  had  confidence  in  Rivers,  and 
believed  that  the  inventor  would  make  good.  He  believed  that  the 
English  capitalists  would  sign  the  contract,  embodying  the  terms 
which  they  had  accepted.  Above  all,  he  had  absolute  confidence  in 
his  own  ability  to  carry  the  project  through  to  a  successful  issue, 


204  THE  SIEGE  OF  UNIVERSITY  CITY 

and  to  realize  in  the  end  all  his  own  and  the  stockholder's  hopes. 
And  he  still  has  this  confidence. 

Lewis,  moreover,  when  pressed  as  to  whether  such  conduct  was 
right,  falls  back  on  his  absolute  guarantee  to  subscribers  against 
all  loss  through  the  patronage  of  the  advertising  in  his  publications. 
He  maintains  that  the  appearance  of  an  advertisement  in  the  Wom- 
an's ^lagazine,  and  especially  that  of  one  of  his  own  enterprises, 
was  equivalent  to  his  personal  endorsement.  He  has  many  times 
paid  back  losses  to  others.  He  considered  himself,  individually,  and 
the  Wornan's  Magazine  as  a  company,  bound  to  make  good  any 
losses  thus  sustained,  the  same  as  they  would  be  bound  by  their 
endorsement  on  commercial  paper.  Lewis  thus  takes  the  ground 
that  the  purchase  of  stock  of  the  United  States  Fibre  Stopper  Com- 
pany in  its  early  stages  was  safeguarded  against  the  usual  risks  of 
speculation,  by  his  own  ability  to  back  his  representations  and,  if 
necessary,  to  relieve  the  purchasers  of  their  investments. 

No  attempt  is  here  made  to  justify  this  line  of  argument.  Laws 
of  ethics  or  rules  of  business  or  common-sense  may  make  Lewis 
seem  quite  wrong.  But,  that  he  acted  in  good  faith  and  in  the  be- 
lief that  he  was  fully  justified,  no  one  who  is  fully  cognizant  of 
Ihe  facts  of  his  career  will  question.  This  instance  is  characteristic 
of  the  worst  phase  of  Lewis'  type  of  temperament;  namely,  a  ten- 
dency to  recklessness  in  overstatements,  to  extravagant  optimism 
and  to  adventurous  disregard  of  caution.  Llis  subsequent  conduct, 
however,  is  equally  characteristic  of  the  best  phase  of  his  character. 
For,  as  he  testified,  he  immediately,  upon  the  final  break  with 
Rivers,  withdrew  all  further  stock  of  the  United  States  Fibre  Stop- 
per Company  from  the  market.  He  notified  the  investors  of  tlnj 
difficulties  that  had  arisen,  and  undertook  in  case  they  so  desired, 
to  relieve  them  of  their  investments.  He  made  good,  in  other  words, 
both  his  express  and  his  implied  guarantees. 

Apart  from  his  lack  of  caution  in  properly  testing  Rivers'  inven- 
tion, and  his  over-hastj''  representations  to  the  public,  especially  in 
the  case  of  the  English  negotiations,  Lewis'  judgment  upon  this 
fibre  stopi^cr  invention  appears  to  have  been  thoroughly  sound,  and 
liis  mode  of  handling  the  whole  affair,  skillful  and  practical. 

The  employment  of  a  reputable  trust  company  as  fiscal  agents 
insured  the  proper  handling  and  registration  of  the  securities.  The 
experimental  plant  of  the  Development  and  Investment  Company 
was  well  equipped  and  well  organized.  It  proceeded  under  Lewis' 
instructions  to  operate  intelligently  and  in  good  faith  with  sole 
regard  to  the  perfection  of  the  process.  The  delicate  and  costly 
task  of  securing  the  necessary  patents  received  due  attention.  The 
negotiations  for  the  sale  of  the  foreign  rights  were  of  such  a  nature 
as  would  have  been  extremely  advantageous  to  the  company  had 
the  representations  of  the  inventor  been  true  and  his  expectations 
realized.     The  whole  affair  is  typical  of  the  best  and  the  worst  that 


THE  DREYFUS  CASE  OF  AMERICA  205 

can  be  alleged  of  Lewis  as  a  promoter  of  mechanical  inventions  and 
processes. 

THE    FIBRK    STOPPER    UNDER   THE    PROBE. 

The  Congressional  Investigating  Committee,  on  the  occasion  of 
its  hearings  in  St.  Louis  in  November  of  1911  made  a  tour  of  in- 
spection of  University  City.  It  afterwards  called  as  a  witness  the 
expert  mechanic  Goeb,  employed  by  Lewis  on  these  inventions.  The 
following  digest  of  the  testimony  of  this  expert,  and  the  statement 
of  Congressman  Redfield  as  to  his  personal  inspection  of  this  plant 
are  of  high  interest  as  bearing  upon  the  question  of  Lewis'  good 
faith.     Mr.  Goeb  said: 

I  was  first  employed  by  Mr.  Lewis  in  1901,  to  make  three  addressing 
machines.  I  was  then  in  the  employ  of  another  firm,  Messrs.  Munn  &  Co. 
I  was  shortly  after  employed  regularly  by  Mr.  Lewis  for  experimental 
work  and  getting  up  new  mechanical  machines  and  perfecting  his  ideas. 

I  first  began  work  on  the  Fibre  Stopper  Company  in  conjunction  with 
Mr.  Rivers,  the  original  inventor,  in  190:?.  Mr.  Rivers  was  then  let  out 
and  I  had  full  charge  after  October,  1903.  The  thop  was  situated  then  at 
4961  Suburban  Railroad  Track.  It  was  specially  fitted  for  perfecting  the 
cork  machines.  We  vacated  those  premises  on  August  1,  1909,  and  moved 
to  University  City  on  December  1,  1909. 

The  original  inventor,  Mr.  Rivers,  I  found,  had  made  five  or  six  differ- 
ent attempts  to  perfect  the  manufacturing  system  for  producing  the  cork. 
He  finally  got  to  the  place  that  proved  it  a  complete  failure.  This  was  in 
December,  1903.  He  had  announced  his  complete  success  to  Mr.  Lewis, 
but  then  developed  complete  failure  in  mechanical  construction.  I  took 
command  of  that  work  on  the  first  of  January,  1904. 

During  the  seven  years  I  have  had  complete  charge  of  it,  several  expert 
chemists  were  employed.  I  was  also  assisted  by  machinists  and  expert 
draughtsmen.  I  was  supplied  with  every  facility  for  perfecting  that  ma- 
chine. At  times  I  was  obstructed  by  funds  getting  short.  But  the  in- 
structions were  to  spare  no  pains  and  efforts  withm  the  limits  of  our  funds 
and  our  capacity  to  perfect  the  machine.  For  seven  years  I  have  been  en- 
gaged practically  constantly  on  that  work. 

The  mechanical  work  went  on  along  with  the  chemical  experiments.  Mr, 
Haywood  was  at  one  time  general  manager.  He  got  Dr.  Caspari,  the  head 
of  a  medical  college  or  school  of  pharmacy  in  St.  Louis,  to  work  up  chemical 
formula?.  Caspari  produced  a  form  of  treatment  which  was  endorsed  by 
the  Anheuser-Busch  Brewing  Association  as  a  result  of  tests  made  with 
the  assistance  of  their  chemists. 

After  I  had  fulfilled  my  duty  as  a  mechanic,  in  aiding  to  perfect  the 
machine,  Mr.  Lewis  made  me  the  promise  that  he  would  give  me  fifty  thou- 
sand dollars  of  his  own  stock,  to  show  his  appreciation  of  what  I  had  done, 
whenever  the  machine  was  perfected.  I  finally  announced  to  him  that  the 
machine  was  mechanically  perfect,  and  he  gave  me  fifty  thousand  dollars 
of  the  company's  stock.  The  machine  is  now,  so  far  as  practical  purposes 
are  concerned,  perfect.  There  were  three  different  types  since  the  first 
so-called  perfected  machine.  The  last  machine  embodies  still  other  fea- 
tures, including  what  we  call  the  Turret.  This  Turret  machine  is  practically 
perfect. 

For  material,  lathes,  supplies  and  labor,  we  have  expended,  perhaps,  an 
average  of  five  hundred  dollars  a  week,  sometimes  more,  sometimes  less. 
On  one  machine,  Mr.  Rivers,  the  inventor,  with  a  mechanical  engineer  as  his 
assistant  and  ten  mechanics,  were  at  work  for  almost  a  year.  At  that  time 
I  estimated  he  had  spent  about  twelve  thousand  dollars.  There  has  been 
expended,  I  should  judge,  outside  the  investment  in  the  building,  about  five 
hundred  dollars  a  week  for  some  four  hundred  and  sixteen  weeks,  or  over 


20G  THE  SIEGE  OF  UNIVERSITY  CITY 

two  hundred  tliousand  dollars,  in  perfecting  cork  machines,  since  the  stock 
was  withdrawn  from  sale. 

Congressman  Rediield,  of  the  Ashbrook  Committee,  here  inter- 
posed his  testimony  as  to  the  plant  from  a  personal  visit,  as  fol- 
lows : 

I  think  it  is  proper,  on  this  particular  subject,  for  me  to  put  upon  rec- 
ord in  a  very  few  words  what  I  found  myself  in  an  examination  over  the 
floor  of  this  building,  to  be  the  facts.  I  ought,  perhaps,  to  preface  it  by 
saying  that  I  am  familiar  with  the  construction  of  factories  as  they  stand 
in  at  least  the  Eastern  and  Central  States  of  this  Union,  having  visited 
many  hundreds  of  them.  I  have  built  them  myself.  I  have  represented 
them,  have  owned  them,  of  several  kinds,  and  have  examined  factories  in 
every  one  of  the  larger  countries  of  Europe. 

I  have  never  seen  a  more  perfect,  well-balanced,  carefully  designed  and 
constructed  building  then  this  plant  which  we  Mere  shown  yesterday.  The 
building  is  not  only  brick,  as  many  are,  but  it  has  concrete  columns  and 
cellar,  concrete  floors  and  a  concrete  roof.  It  has  exceptionally  fine  light, 
and  is  of  a  thoroughly  solid  character.  The  equipment  is  in  many  respects 
of  a  peculiarly  high  grade.  The  elevators  and  some  of  tlie  machinery  show 
that  great  care  has  been  used  to  get  that  which  was  of  permanent  value. 
It  is  not  explicable  on  any  other  basis,  for  they  could  be  had  to  do  the  work 
at  much  less  cost.  The  building  is  not  equipped  for  making  heavy  ma- 
chinery, but  for  the  work  of  liglit  machinery  it  is  very  nearly  if  not  quite 
as  good  a  plant  as  I  have  ever  seen.  The  plant  is  entirely  self-contained. 
It  is  equipped  for  designing,  for  experimenting,  for  making  its  own  ma- 
chinery, and  for  operating  that  machinery  when  it  is  made,  I  do  not  know 
who  the  person  was  who  designed  that  plant.  I  have  not  met  him.  I  have 
jio  knowledge  of  him.  But,  whoever  he  was,  he  understands  his  business. 
I  am  very  glad  to  make  a  record  of  the  value  of  and  the  kind  of  work  put: 
into  that  plant. 

The  subject  of  the  practical  value  of  companies  based  upon  pat- 
ent rights  in  mechanical  devices^  in  so  far  as  it  affects  Lewis'  good 
faith,  may  be  brought  to  a  close  by  the  testimony  of  F.  R.  Still,  an 
associate  of  Congressman  Redfield  in  his  business  enterprises.  Mr. 
Still  chanced  to  be  passing  through  St.  Louis  while  the  Congres- 
sional Committee  was  in  session  and,  quite  by  accident,  attended 
one  of  the  hearings.  He  Avas  called  by  the  committee  at  the  sug- 
gestion of  ]Mr.  Redfield,  as  an  expert  to  testify  as  to  the  normal  and 
usual  experience  of  companies  engaged  in  the  development  of  pat- 
ented articles  and  processes.  This  is  the  substance  of  Mr.  Still's 
examination : 

I  am  one  of  the  associates  in  business  of  Mr.  Redfield,  one  of  the  com- 
mittee. I  did  not  know  of  his  presence  in  St.  Louis  when  I  came  to  the 
city  this  morning.  I  missed  connections.  I  am  not  acquainted  with  any 
of  the  parties  to  this  action  and  never  heard  of  the  United  States  Fibre 
Stopper  Company,  nor  met  Mr.  Britt  or  Mr.  Madden. 

My  experience  as  a  mechanical  engineer  and  manufacturer  has  been  as 
follows:  Since  188G,  I  have  been  with  the  company  I  am  with  at  present. 
I  started  as  draftsman  and  am  now  one  of  the  executive  officers  and  have 
been  for  years.  Hardly  any  action  has  been  taken  in  the  company  but 
what  has  been  more  or  less  under  my  charge.  I  have  had  a  great  deal  of 
experience  in  developing  inventions — blowers,  heaters,  dry  kilns,  dust  sepa- 
rators, exliaust  fans,  steam  engines,  boilers,  drying  equipment;  and  am 
brouglit  into  contact  with  almost  every  kind  of  manufacturing.  Nearly 
everything  we  make  is  patented. 


O   £■ 

b  ^ 


V  ^  o 

5  o.  ov 


THE  DREYFUS  CASE  OF  AMERICA  209 

We  always  have  difficulty  in  developing  patented  processes.  One  case 
was  a  patented  apparatus  for  drying  bricks.  A  man  named  Alex  Scott 
patented  a  process  for  conveying  bricks  to  the  kiln,  setting  them  directly 
in,  drying  them  and  thus  doing  away  with  the  dryer.  We  bought  the  pat- 
ent from  the  firm  in  Columbus  which  owned  it,  and  organized  a  company 
^mong  ourselves  and  our  employees.  There  was  no  stock  in  our  ov,-n  com- 
pany for  sale,  and  we  thought  this  was  an  opportunity  to  interest  our  men. 
The  president  paid  for  the  patents  and  we  took  over  the  company,  some 
twenty  men  becoming  owners. 

We  have  now  twelve  plants  working  successfully  on  this  device.  But  at 
first  tlie  system  met  with  one  difficulty  after  another.  In  burning  bricks, 
(which  is  a  science  in  itself),  if  the  chief  burner  gets  his  back  up  or  put 
out  at  all,  one  thing  after  another  goes  wrong.  We  drifted  from  one  thing 
to  another.  We  even  purchased  patents  on  a  down-draft  kiln.  But,  after 
serious  knocks,  about  two  years  ago  we  decided  to  drop  it.  We  offered  to 
take  back  the  stock.  The  Scott  Kiln  Company  was  wiped  out.  After  six 
years  of  activitj'  and  the  best  knowledge  we  had,  we  concluded  the  thing 
was  worthless.  This  was  two  years  ago.  A  year  later,  a  key  to  the  diffi- 
culty was  found.  We  bought  another  patent,  something  we  didn't  have 
before,  and  now  the  kiln  is  a  success. 

This  is  the  history,  in  substance,  of  most  of  the  great  inventions.  Nearly 
everything  we  ever  liad  contact  with  caused  us  a  great  deal  of  grief,  if  not 
almost  despair,  before  a  successful  conclusion  had  been  reached.  This  has 
been  the  case,  too,  with  the  t}'pewriter,  and  with  the  automobile.  I  am 
intimately  connected  with  that.  I  know  of  no  great  invention  which  has 
not  passed  through  that  stage.  I  have  never  seen  anything  that  was  a  suc- 
cess from  the  start. 

Mr.  Slejip:  Wouldn't  you  like  to  buy  some  stock  in  the  Fi!)re  Stopper 
Company  yourself?      (Laughter.) 

Mb.  Austix:  I  was  just  going  to  suggest  to  Mr.  Redfield  aiid  his  secre- 
tary that  they  gobble  up  this  concern  while  in  St.  Louis. 

Mr.  Still:     I  don't  know  anything  about  that  brand. 

Mr.  E.  G.  Lewis:  If  you  found  a  concern  owning  pioneer  patents  cov- 
ering forty,  perhaps  eighty,  additional  processes,  with  patents  in  United 
States,  Canada,  Mexico,  France,  and  other  countries,  for  manufacturing 
out  of  wood  pulp  a  substitute  for  bark  corks  equally  good,  at  one-tenth 
the  cost  of  production,  would  you  consider  the  ownership  of  such  a  process 
and  patents  very  valuable? 

Mr.  Still:    It  certainly  sounds  so. 

Mr.  Lewis:  Would  you  consider  five  million  dollars  an  excessive  capital 
stock? 

Mr.  Still j  I  would  not.  I  think  it  would  be  an  easy  matter  to  get  the 
money  if  it  had  been  demonstrated  that  it  was  a  success.  I  v/ant  to  see 
it  tried  once.     After  that  it  is  merely  a  mechanical  process. 

Mr.  Lewis:  In  other  words,  if  one  cork  could  be  made,  a  million  could, 
br  duplicating  the  process  and  machines,  and  tliis  would  be  satisfactory 
to  demonstrate  its  value  as  at  least  five  million  dollars? 

Mr.  Still:  Yes.  I  don't  know  whether  I  would  put  up  that  amount — • 
with  one  cork.     But  I  understand  what  you  mean. 

Mr.  Austix:  I  should  like  to  see  you  float  five  millions  of  dollars  on 
one  cork.     (Laughter.) 

Mr.  Lewis:    I  mean  the  process  having  been  demonstrated. 

Mh.  Still:  If,  as  you  say,  the  largest  users  of  the  product  in  the  world 
pronounced  this  product  superior  to  anything  they  had  used  before  or  at 
least  equal  to  it,  and  said,  "That  is  exactly  what  we  have  been  looking  for," 
I  should  consider  that  good  evidence  you  had  perfected  the  patent.  I  would 
go  the  limit  on  that. 

Mr,  Lewis:  If,  in  the  face  of  that  you  discovered  a  mechanical  fault  to  be 


210  THE  SIEGE  OF  UNIVERSITY  CITY 

overcome  to  make  it  really  perfect,  and  you  stopped  the  sale  of  stock,  re- 
turned the  money,  purchased  back  stock  sold,  and  then  turned  and  spent 
another  two  hxmdred  thousand  dollars  and  over  eight  years  in  perfecting 
the  invention,  would  you  consider  that  a  reasonable  exhibition  of  good 
faith? 

Mr.  Still:  It  sounds  to  me  as  though  that  would  be  about  all  a  man 
could  do. 

Mr.  Redfield:  If  a  difficulty  arose,  not  in  the  process,  but  in  the  physical 
nature  of  the  material  used,  would  that  be  a  normal  and  usual  difficulty? 

Mr.  Still:  Yes;  I  have  a  case  myself  of  a  high-speed  blower.  It  pro- 
duced the  high  pressure  we  desired,  but  in  course  of  time  the  metal  of  which 
the  spider  or  wheel  frame  was  made  became  fatigued  by  the  speed.  One 
after  another  broke  down.  We  replaced  the  material  with  steel  made  at 
much  higher  temperature;  and  they  withstood  the  strain.  We  had  to  work 
^.'ighteen  months  on  it.  I  would  have  spent  two  hundred  thousand  dollars 
on  it  if  necessary.  I  would  certainly  regard  two  hundred  thousand  dollars 
spent  on  perfecting  a  process  for  making  artificial  corks  as  a  very  small 
sum  in  comparison  with  its  value. 

The  story  of  the  United  States  Fibre  Stopper  Company  is  by  no 
means  at  an  end.  The  machine  produces  artificial  corks  perfectly. 
It  is  now  a  matter  of  mechanical  reproduction.  Had  Lewis'  re- 
sources not  been  absorbed  in  the  struggle  with  the  Government  in 
the  j^ears  succeeding  1905,  it  is  altogether  probable  that  a  complete 
equipment  for  the  manufacture  of  fibre  stoppers  would  have  long 
since  been  installed  in  the  company's  plant  at  University  City,  and 
its  products  widely  placed  upon  the  market 


CHAPTER  IX. 
THE  FOUNDING  OF  UNIVERSITY  CITY. 
The  Choice  op  a  Site — The  Growth  of  St.  Louis — University 
Heights — Six  Times  One  Are  Six — A  City  Beautiful — 
The  First  Eighty-Five  Acres — A  Million  Dollar 
Check — The  Deal  Under  the  Probe — Lewis  Home  at 
University  City — Millions  in  Options. 

University  City  was  founded  in  the  fall  of  1902,  four  years 
before  it  was  set  apart  by  law  as  a  separate  municipality.  This 
event  was  the  beginning  of  a  new  era  for  Lewis  and  his  enterprises, 
marking,  as  it  does,  his  removal  from  the  Winner  building  down 
town  to  his  present  location,  now  the  heart  of  University  City.  The 
change  in  his  surroundings  was  reflected  in  his  conduct  of  affairs. 
He  judged  men  and  events  from  a  loftier  viewpoint.  His  activities 
rise  to  a  higher  general  level.  They  assume  a  more  elevated  tone 
and  dignified  character.  They  embrace  greater  values,  touch  per- 
sonages of  higher  economic  and  political  rank,  and  acquire  national 
rather  than  merely  local  significance. 

THE   choice    of  A   SITE. 

Lewis  has  sketched  the  history  of  the  founding  of  University  City 
in  his  promotion  literature,  and  in  the  columns  of  the  Woman's 
Magazine.  He  also  told  the  story  in  full  to  the  Ashbrook  Con- 
gressional Committee.  The  following  account  is  digested  in  his 
own  words  so  as  to  present  at  one  view,  the  process  of  reasoning 
which  led  him  to  pick  out  this  particular  location,  and  the  sequence 
of  events  that  followed.     He  says  in  substance: 

While  I  was  busy  attending  to  the  growth  of  the  Woman's  Magazine,  I 
had  clearly  in  my  mind  that  St.  Louis  was  going  to  be  a  big  city,  one  of 
the  first  in  the  United  States.  Probably,  no  city  in  all  the  United  States 
has  a  future  more  assured  than  St.  Louis.  It  is  situated  on  the  great  high- 
way of  the  Nation,  the  Mississippi  River.  Its  position  is  such  as  to  hold 
the  South,  Southwest,  and  West  as  tributaries  to  its  commerce.  Its  mer- 
chants' enterprises  draw  their  business  from  an  extent  of  country  immense 
in  size  and  fabulously  rich.  The  city  is  known  as  one  of  the  richest  in  the 
United  States.  Its  wealth  is  spread  in  moderate  fortunes  among  a  great 
number  of  citizens,  so  that  it  has  become  a  city  of  attractive  homes.  In 
no  other  city  are  there  so  many  people  able  to  build  and  own  the  beautiful 
homes  in  which  they  live.  Yet,  by  reason  of  its  situation,  no  other  city  of 
its  size  has  so  little  space  available  left  for  fine  dwellings. 

Cities  located  on  large  rivers  always  develop  their  finest  residence  dis- 
trict away  from  the  river,  not  along  the  river  front.  St.  Louis  is  situated 
on  a  bend  of  the  Mississippi,  which  is  almost  a  horseshoe.  The  city  occupies 
the  space  inside  the  bend.  It  has,  therefore,  been  forced  to  build  up  and 
develop  along  the  narrow  tract  leading  away  from  the  center  of  the  bend- 
Its  line  of  growth  is  thus  necessarily  toward  the  west.  The  finest  residence 
section  is  naturally  the  West  End,  and  only  in  this  direction  can  more  of 
these  beautiful  homes  be  built. 

211 


212  THE  SIEGE  OF  UNIVERSITY  CITY 

I  saw  that  the  city  must  increase.  I  knew  that  land  values  in  the  heart 
of  the  city  must  appreciate,  that  rentals  must  be  raised.  I  realized  that 
we  would  soon  need  larger  quarters.  We  were  then  occupying  the  basement 
of  some  buildings  down  town,  and  the  second  and  third  floors  of  others 
wherever  we  could  get  the  necessary  rooms,  as  close  together  as  possible. 
I  saw  that  we  should  have  to  build  or  acquire  a  large  plant  somewhere  in 
or  near  the  city.  I  was  the  principal  owner  of  this  publishing  company 
which  was  making  a  great  deal  of  money.  We  were  spending  money  freely, 
yet  it  looked  as  though  we  were  going  to  make  a  great  deal  more.  I  con- 
cluded, therefore,  that  I  would  buy  outright  a  suitable  piece  of  property, 
establish  a  new  plant  and  beautify  the  surroundings.  I  had  some  money  of 
my  own.  Besides,  Mrs.  Lewis  had  some  money.  This  credit  of  my  own 
and  my  corporations,  I  thought,  would  be  enough  if  properly  managed  to 
finance  the  whole  scheme.  I,  therefore,  began  to  cast  about  for  a  suitable 
location.  I  commenced  to  look  over  the  city  and  suburbs  of  St.  Louis  very 
carefully.     I  made  a  careful  study  of  the  entire  real  estate  situation. 

THE    GROWTH    OF    ST.    LOUIS. 

The  growth  of  a  city  is  from  high  ground  to  high  ground,  from  hill  to 
hill.  The  hollows  fill  up  later.  This  has  been  the  case  in  St.  Louis.  To 
the  south  are  the  manufactories  and  brick  iields.  To  the  north  the  land 
is  not  laid  out  for  fine  residences.  Therefore,  the  natural  development  has 
been  west,  from  hill  to  hill. 

St.  Louis  has,  in  fact,  developed  in  zones  from  height  to  height.  Twenty 
years  ago  the  high  land  from  Twelfth  to  Eighteenth  along  Locust  street 
was  the  fashionable  residence  district.  These  mansions  are  now  offices  or 
restaurants.  The  tide  next  rose  to  Twenty-fifth  street,  which  is  the  next 
highest  land  west  of  Eighteenth.  Even  as  recently  as  ten  years  ago  this 
was  the  centre  of  fashionable  homes.  The  next  jump  was  to  Grand  Ave- 
nue, which  is  Thirty-sixth  street.  Then  came  the  long  stretch  to  Taylor, 
or  Forty-fifth  street.  Eight  years  ago  this  was  considered  the  extreme 
west  limit  of  St.  Louis.  Two  more  jimips  were  taken  to  Kingshighway  and 
Union  Boulevard.  The  centre  of  this  is  now  Lindell  Boulevard,  v/here  are 
located  all  the  great  private  streets  and  places,  and  the  costly  homes  of 
the  wealthiest  people  of  St.  Louis.  After  this  came  new  buildings  in  vacant 
land  until  you  come  to  tlie  next  height,  some  distance  out,  which  is  now 
called  University  Heights. 

UNIVERSITY    HEIGHTS. 

After  a  very  careful  survey,  my  attention  was  attracted  to  the  high  land 
which  lies  along  both  sides  of  what  is  now  known  as  Delmar  Boulevard. 
This  is  the  main  artery  of  the  West  End  of  St.  Louis,  because  it  was  for- 
merly the  old  Bonhomme  Road,  the  first  French  trail,  which  was  the  line 
of  communication  between  St.  Louis  and  the  early  settlers  in  the  interior 
of  the  country.  It  is  now  a  great  east  and  west  boulevard  running  through 
St.  Louis  straight  west  out  into  St.  Louis  county,  right  through  the  heart 
of  University  City.  Tliis  location,  on  which  the  great  octagon  tower  was 
put,  had  been  the  property  of  the  Bonhomme  Land  Company.  It  was  a 
vacant  cow  pasture  which  the  owners  had  taken  for  a  debt.  My  reasons 
for  taking  this  tract  of  land  enter  into  the  whole  proposition.  The  location 
was  an  ideal  one  for  my  purpose.  Along  one  side  is  Forest  Park,  which 
had  recently  been  selected  as  the  location  of  the  World's  Fair  Grounds. 
Next  came  the  tract  just  then  acquired  by  Washington  University  for  its 
new  buildings.  This  institution,  the  leading  university  in  the  neighborhood 
of  St.  Louis,  had  recently  moved  from  its  premises  down  town,  and  bought 
the  land  next  Forest  Park  upon  the  west.  Here  they  have  since  laid  out 
college  halls  and  quadrangles  in  the  style  of  Oxford  and  Cambridge  Uni- 
versities. That  fixes  the  environment,  and  gives  the  surrounding  land  a 
higher  status  as  to  residence  value. 

My  tract  is  thus  the  centre  of  a  complete  little  district  in  between  Forest 
Park  and  Washington  University  on  the  south,  and  the  far  less  demandable 


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THE  DRP^YFUS  CASE  OF  AMERICA  215 

land  on  the  north,  like  a  cork  in  the  neck  of  a  bottle.  Through  this  district 
the  progress  of  the  building  of  fine  residences  must  tend,  and  the  conse- 
quent pressure  must  force  up  prices  to  almost  any  level  which  the  owners 
see  fit  to  demand.  This  tract  lay  practically  alongside  of  the  University, 
hence  the  name  University  Heights.  The  land  was  the  highest  in  the  dis- 
trict, and  was  unoccupied.  The  only  objection  was  that  it  was  thought  to 
be  too  far  out.  Nobody  in  St.  Louis  seemed  to  have  any  respect  for  the 
property  at  that  time.  In  fact,  when  I  commenced  to  buy  they  made  a  rush 
to  sell.  The  real-estate  men  of  St.  I>ouis  even  went  to  the  National  Bank 
of  Commerce  at  that  time,  and  asked  the  bank  to  withdraw  its  credit  from 
me,  because  I  was  starting  a  fictitious  real-estate  boom  which  in  their 
opinion  would  not  materialize  for  thirty  years.  I  thought  that  my  judgment 
was  better  than  theirs,  and  the  event  has  proved  that  it  was. 

SIX   TIMES    ONE    ARE    SIX. 

I  had  a  canvass  made  of  all  the  vacant  lots  in  the  West  End  within  the 
reasonable  limits  of  possible  growth  for  a  fine  residence  section.  I  found 
in  all  there  were  only  six  thousand  left.  1  then  went  to  the  building  rec- 
ords, and  found  that  those  lots  were  being  built  up  at  the  rate  of  about  a 
thousand  a  year.  The  result  would  be  that  in  about  six  years  all  the  prop- 
erty intervening  between  the  land  I  had  in  view,  and  the  solidly  built  up 
portion  in  St.  Louis,  would  be  entirely  occupied.  There  were  six  thou- 
sand vacant  lots,  and  the  people  were  building  at  the  rate  of  one  thousand 
houses  a  year.  Every  time  I  multiplied  up  those  six  times  one  thousand 
homes  it  made  six  thousand.  I  knew  the  intervening  space  would  be  cov- 
ered in  six  years,  not  thirty.  I  knew  that  the  new  homes  would  have  to 
be  in  what  is  now  University  Heights  or  out  beyond  it.  Having  these  facts 
well  in  mind,  I  determined  to  go  a  good  deal  deeper  into  the  scheme  than 
I  first  proposed. 

This  tract  of  land  lay  along  the  main  western  road,  just  outside  the  city 
limits.  The  limits  of  St.  Louis  extend  up  to  about  Sixtieth  street.  Our 
tract  would  begin  at  Sixty-third.  I  found  that  I  could  not  buy  the  corner 
lot  which  I  wanted  for  the  site  of  my  publishing  plant  without  acquiring 
the  entire  property.  1,  therefore,  determined  on  buying  that  tract  and  a 
large  amount  of  the  adjacent  property  and  that  I  would  not  only  build 
up  there  a  beautiful  plant,  but  also  surround  it  with  high-class  improve- 
ments. I  would  then  make  it  a  fine  residence  section  and  lay  it  out  as  a 
separate  city  from  St.  Louis. 

A  CITY  BEAUTIFUL. 

A  location  outside  the  city  line  had  some  advantages  and  some  disad- 
vantages. The  tax  rate  was  much  lower.  This  was  an  important  fact,  in 
view  of  my  calculation  that  I  would  have  to  carry  my  undeveloped  prop- 
erty for  at  least  six  years.  There  is  also  greater  freedom  in  laying  out  a 
tract  not  within  city  limits.  On  the  other  hand,  the  municipal  improve- 
ments do  not  extend  over  the  city  line.  One  specially  bad  feature  was  the 
proximity  of  Delmar  racetrack,  which  was  then  in  full  swing.  The  sport- 
ing element  (which  afterwards  created  conditions  such  that  Governor  Folk 
called  out  the  militia  and  put  the  racetrack  out  of  business),  took  advan- 
tage of  their  proximity  to  the  city  limits.  They  put  up  all  sorts  of  gam- 
bling places  and  dives  just  over  the  line  into  the  county.  These  were  right 
at  our  front  door.  No  doubt  this  was  one  of  the  reasons  why  the  land 
could  be  bought  so  cheap. 

I  found,  however,  on  looking  up  the  matter,  that  there  would  be  a  rem- 
edy for  these  conditions  in  the  incorporation  of  a  new  city.  St.  Louis  is 
one  of  the  two  cities  in  the  United  States  that  is  not  in  any  county.  There 
is  a  provision  of  the  Missouri  law  that  one  city  cannot  be  incorporated 
within  two  miles  of  any  other  city  in  any  county.  But  St.  Louis,  not  being 
iu  a  county,  the  condition  was  such  that  if  it  ever  became  desirable  to  in- 
corporate a  new  city  just  outside  St,  Louis,  this  could  be  done.    This  fact 


21G  THE  SIEGE  OF  UNIVERSITY  CITY 

seems  to  have  been  overlooked.     No  one  else  had  thought  about  it.     This 
tract  was  really  more  valuable  than  had  been  thought. 

About  this  time  I  began  to  work  out  the  idea  of  a  model  city  which 
should  be  a  real  "City  Beautiful."  The  thought  I  had  in  mind  and  that  I 
was  working  on  was  this:  Having  acquired  this  property  I  would  lay 
it  out  under  one  great  engineering  plan  as  the  most  beautiful  residence 
section  conceivable.  When  it  had  acquired  enough  population,  I  would 
incorporate  it  as  a  separate  city.  I  would  be  the  mayor.  Then,  having 
the  municipal  power,  I  could  always  protect  it.  If  anybody  should  erect  a 
soap  factory,  for  instance,  adjoining  our  residence  section,  on  which  we  were 
spending  enormous  sums  for  improvements,  we  could  condemn  that  prop- 
erty, or,  if  it  was  within  three  miles  of  the  municipal  centre  we  could  make 
it  a  city  park.  For  it  is  often  the  case  with  sucli  a  plan  that  somel)ody 
gets  in  the  middle  and  tries  to  hold  it  up,  hoping  to  be  bought  out.  Then, 
if  we  could  not  deal  with  such  obstructionists  as  interfering  with  our  pub- 
lishing plant,  we  could  handle  them  as  city  officials. 

The  keen,  far-seeing  glance  which  Lewis  thns  shot  into  the  verj' 
heart  of  the  complex  conditions  destined  to  determine  the  real  estate 
development  of  a  great  city,  is  among  the  most  characteristic  and 
representative  acts  of  his  entire  career.  A  study  of  the  real- 
estate  map  of  St.  Louis  at  the  present  time  proves  the  soundness  of 
his  judgment.  A  glance  at  the  views,  shown  elsewhere,  of  the  resi- 
dence property  built  up  in  what  were  then  vacant  fields  between 
University  Heights  and  St.  Louis  shows  the  accuracy  with  whicli 
Lewis  had  estimated  the  drift  of  events.     In  this  connection  he  says: 

When  we  went  out  there  we  were  almost  the  sole  inhabitants.  I  remem- 
ber one  other  house  out  there;  possibly  there  were  two  others.  To  the  east 
of  us  were  Park  View  and  Washington  Heights.  These  at  that  time  were 
being  graded.  There  were  practically  no  houses  in  sight,  perhaps  a  half 
dozen  all  told.  As  far  as  the  eye  could  see  was  vacant  land.  There  is  on 
that  same  area  today,  I  should  judge,  about  fifteen  hundred  houses.  It 
is  the  finest  residence  section  in  St.  Louis. 

THE  FIRST  EIGHTY-FIVE  ACRES. 

The  manner  in  which  this  purchase  was  made  was  thus  recounted 
by  Wm.  H.  Lee,  President  of  the  Merchants-Laclede  National  Bank 
since  its  incorporation  in  1885  before  the  Ashbrook  Committee: 

The  Merchants-Laclcde  National  Bank,  with  two  of  its  directors,  Mr. 
Paramore  and  Mr.  Conzelmann,  had  each  acquired  one-third  interest  in  a 
piece  of  land  located  in  what  is  now  University  City,  then  owned  by  the 
Bonhomme  Land  Company.  This  is  the  plat  on  whicih  the  octagon  building 
of  the  Woman's  Magazine  is  situated.  This  land  was  taken  for  a  debt  on 
the  part  of  the  corporation  known  as  the  Bonhomme  Land  Company.  The 
corporation  had  been  sold  out  under  a  deed  of  trust.  All  the  parties  inter- 
ested were  given  an  opportunity  to  get  in.  It  was  finally  bid  in  by  these 
three  interests.  Then  it  was  sold  through  two  gentlemen,  Messrs.  Hoskins 
and  Camp,  to  a  Mr.  Coakley,  who  it  afterwards  appeared  was  acting  as 
agent  for  Mr.  Lewis.  The  sale  on  behalf  of  the  bank  was  made  by  Mr. 
Paramore  with  my  consent  and  that  of  Mr.  Conzelmann,  and  as  I  thought 
to  Messrs.  Hoskins  and  Camp.  Two  days  afterwards  these  men  came  to  my 
office  and  paid  the  bank  ten  thousand  in  cash.  They  also  gave  two  notes, 
both  made  by  Mr.  Coakley.  One  Avas  for  one  hundred  and  twenty  thous- 
and dollars,  under  date  of  October  6,  1902,  due  in  five  years  and  bearing 
interest  at  5  per  cent.  The  second  was  for  forty  thousand  dollars,  due  in 
three  years  witli  interest  at  8  per  cent.  The  property  was  thus  mortgaged 
for  one  hundred  and  si.xty  tiiousand  dollars.     It  sold  for  one  hundred  and 


THE  DREYFUS  CASE  OF  AMERICA  217 

seventy  thousand  dollars,  of  which  ten  thousand  was  paid  in  *cash.  I  have 
no  knowledge  of  an  amount  of  two  hundred  thousand  dollars  having  been 
loaned.  My  knowledge  extends  only  to  the  amount  of  one  hundred  and 
seventy  thousand  dollars. 

The  way  the  transaction  was  managed  was  this:  The  property  at 
University  City  had  been  sold  under  the  original  deed  of  trust.  The  bank 
took  the  land  for  debt.  This  debt  had  to  be  paid  off.  The  three  parties 
to  the  transaction  were  the  bank,  Mr.  Paramore,  and  i\Ir.  Conzelmann.  Each 
put  up  twenty  thousand  dollars,  making  sixty  thousand  dollars  in  all,  to  pay 
off  the  debt.  Then  new  deeds  of  trust  were  made  for  the  one  hundred 
and  twenty  thousand  dollars  and  forty  thousand  dollars  of  the  purchase 
price.  The  deeds  were  owned  jointly  by  all  of  us,  one-third  each.  They 
were  held  by  the  owners  who  put  up  the  sixty  thousand  dollars  to  clear 
the  original  title. 

Lewis  thus  secured  title  to  a  piece  of  propertj^  which  had  recently 
been  picked  up  by  the  owners  for  a  debt  of  sixty  thousand  dollars. 
He  assumed  an  obligation  on  it  of  two  hundred  thousand  dollars, 
of  which  only  ten  thousand  dollars  appears  to  have  actually  changed 
hands.  He  then  incorporated  the  same  tract  for  a  million  dollars. 
This  deal  is  an  instance  of  Lewis'  financial  methods  which  has  been 
severely  criticized  by  many  conservative  people.  Others  deem  it 
perhaps  the  most  conspicuous  instance  of  practical  wisdom  that  he 
ever  exhibited.     Let  us  see  what  considerations  are  involved. 

HOW   THE    UNIVERSITY   HEIGHTS    COMPANY   WAS    FORMED. 

Even  apart  from  the  ethical  question  of  Lewis'  good  faith,  this 
transaction  occupies  a  very  central  position  in  our  story.  This  land 
was  afterwards  the  principal  security  for  certain  loans  of  the  Peo- 
ple's United  States  Bank  which  were  called  in  question.  For  all 
these  reasons  it  is  extremely  important  that  the  true  nature  of  this 
series  of  transactions  be  clearly  grasped.  This  is  what  Lewis  has 
to  say  about  it: 

The  purchase  of  the  original  tract  of  eighty-five  acres  led  to  the  forma- 
tion of  a  real-estate  company.  The  two  companies  that  figure  in  the 
narrative  are  therefore  the  liniversity  Heights  Realty  and  Development 
Company,  which  held  the  real  estate  property,  and  the  Development  and 
Investment  Company,  which  was  the  promoting  and  holding  company  for 
the  real  estate  enterprise.  The  University  Heights  Company  was  char- 
tered in  October,  1903,  with  a  capital  of  one  million  dollars,  in  order  to 
provide  a  corporation  through  which  to  carry  out  the  necessary  improve- 
ments. 


*L,ewis  testifies  that  the  total  sum  paid  Messrs.  Hoskins  and  Camp  was  $200,000.  The 
part  played  by  the  Development  and  Investment  Company  in  this  transaction  is  wit- 
nessed by  an  agreement  made  on  the  5th  of  August,  1902,  between  Messrs.  Iloskins  and 
Camp  and  that  concern,  whereby  it  agrees  to  purchase  the  85-acre  tract  of  land,  imme- 
diately west  of  Delmar  Garden,  from  them  for  the  sum  of  $300,000.  Payment  was  to 
be  made  in  the  form  of  a  mortgage  for  $115,000  at  5%  per  annum.  The  balance  was  to 
be  paid  in  the  five-year  certificates  of  the  Development  and  Investment  Company  at 
the  rate  of  S%  per  annum  on  the  sum  of  $55,000,  and  6%  on  the  sum  of  $30,000.  A 
further  bonus  of  $15,000  in  certificates  was  payable  to  the  vendors  in  the  event  that 
the  profits  of  the  Development  and  Investment  Company  exceeded  $100,000  on  the 
land.     The  equity  in  the  land  was  pledged  as  security  for  the  certificates. 

The  manner  in  which  Coakley  was  employed  in  the  transaction  and  the  exact  na- 
ture of  the  modifications  made  between  this  agreement  and  the  deal  finally  carried  into 
effect,  is  not  entirely  clear.  But  that  Messrs.  Hoskins  and  Camp  deem  the  above  agree- 
ment to  have  been  carried  into  effect  in  substance,  is  witnessed  by  their  endorsements 
upon  the  original  document  showing  hew  their  claim  for  an  equity  under  this  agree- 
ment has  been  adjusted  from  time  to  time. 


218  THE  SIEGE  OF  UNIVERSITY  CITY 

The  way  in  which  it  was  done  was  this:  I  first  borrowed  two  hundred 
thousand  <iolIars  to  acquire  the  acreage.  I  then  went  to  the  National  Bank 
of  Commerce  stating  what  I  wanted  to  do.  They  loaned  me,  or  gave  me 
credit  for,  one  million  dollars  I  had  three  or  four  other  gentlemen  join 
with  me  in  making  the  notes,  but  it  was  practically  a  loan  to  me.  They 
simply  endorsed  it  as  an  accommodation.  There  was  no  compensation  paid 
to  them.  The  note  was  paid  the  same  day,  and  the  transaction  closed.  The 
men  came  out  clear  of  obligation,  released  from  their  investment.  The 
reason  it  is  clear  in  my  mind  is  that  I  found  recently  among  some  old 
papers  that  million-dollar  check.  I  then  incorporated  the  University 
Heights  Realty  and  Development  Company  paying  this  million  dollars  into 
its  capital.  Nobody  was  interested  in  the  transaction  except  ourselves. 
The  law  of  Missouri  did  not  require  the  payment  of  the  capital  stock  in  a 
corporation  in  cash,  but  in  cash  or  equivalent  value.  There  was  not  at  the 
time  any  standard  of  the  values  of  this  land.  The  mere  fact  of  our  pur- 
chase and  the  severe  restrictions  that  we  put  upon  it,  greatly  enhanced  its 
value.  But  still  our  attorneys  advised  us  to  comply  with  every  technical 
point  by  buying  for  cash  and  paying  the  cash;  which  we  did, 

THE    DIVISION    AND    SALE    OF    STOCK. 

The  authorized  capital  stock  of  the  company  was  one  million  dollars, 
three  hundred  thousand  dollars  preferred  and  seven  hundred  thousand 
dollars  common.  The  preferred  stock  was  guaranteed  six  per  cent  interest. 
It  was  offered  in  the  St.  Louis  newspapers  with  a  description  of  the  prop- 
erty, and  a  statement  of  what  we  were  going  to  do,  and  of  the  fact  that 
I  held  the  bulk  of  the  common  stock.  It  was,  one  might  say,  a  personal 
advertisement.  This  preferred  stock  was  held  in  the  treasury  for  sale, 
and  about  one  hundred  and  twenty  thousand  dollars  worth  of  it  was  sold 
at  par  to  the  local  public.  It  was  almost  all  taken  up  by  wealthy  men  in 
St.  Louis  and  St.  Louis  county,  or  among  my  well-to-do  friends  and  busi- 
ness associates.  As  this  money  came  in  it  was  placed  in  the  treasury  and 
used  exclusively  to  develop  the  estate. 

The  common  stock  was  nearly  all  held  by  me,  with  Mrs.  Lewis  and 
one  or  two  others,  as  required  by  law.  It  was  not  sold  to  the  public  but 
held  by  the  Development  and  Investment  Company.  I  did  not  put  any 
of  the  common  stock  on  the  market. 

The  total  actual  price  paid  on  all  the  lands  embraced  in  the  University 
Heights  holdings  was  close  on  four  hundred  thousand  dollars.  The  total 
improvements  would  represent  about  two  hundred  and  fifty  thousand  dol- 
lars, in  sewers,  sidewalks,  gutters,  gas  and  water  mains.  It  is  completely 
improved  as  the  highest  class  of  residence  property. 

THIS  DEAL  UNDER  THE   PROBE. 

The  propriety  of  the  above  transaction  was  called  in  question 
before  the  Ashbrook  Investigating  Committee  while  ex-Congress- 
man Nathan  Frank  was  on  the  stand.  Mr.  Frank  is  a  local  trustee 
and  agent  for  St.  Louis  and  vicinity  of  the  Metropolitan  Life  Insur- 
ance Company  of  New  York,  and  one  of  the  most  eminent  corpo- 
ration lawyers  in  the  West.  The  witness  testified  in  reply  to  ques- 
tions of  Congressman  Austin,  substantially  as  follows: 

Under  the  former  law  of  Missouri  in  reference  to  incorporated  com- 
panies, which  was  in  effect  at  tliat  time,  at  least  one-half  the  capital  stock 
must  be  paid  in  actual  cash.  But  the  Supreme  Court  of  Missouri  has  held 
that  "lawful  money"  means  property,  and  that  in  paying  for  the  shares 
of  a  corporation  you  could  put  in  pro])erty  at  an  honest  fair  valuation. 
Recently,  the  law  has  been  made  much  more  explicit. 

At  this  point  ensued  the  following  colloquy : 


THE  DREYFUS  CASE  OF  AMERICA  219 

Mr.  Lewis.  I  want  to  ask  you  a  few  questions,  Mr.  Frank,  as  this  mat- 
ter has  frequently  been  brought  up  and  you  undoubtedly  could  qualify  to 
settle  it.  Suppose  you  purchased  eighty-five  acres  of  real  estate  which, 
in  your  judgment  and  that  of  competent  experts,  was  destined  to  become 
the  future  residence  centre  of  St.  Louis,  for  two  hundred  thousand  dollars. 
Suppose  you  then  incorpoiated  a  company  for  a  million  dollars,  of  which 
the  preferred  capital  stock  would  go  into  the  treasury  to  be  sold  for  the 
improvement  of  the  land  itself,  thereby  enhancing  its  value,  and  you,  as  the 
purchaser  of  the  land,  took  only  the  common  stock  representing  its  potential 
or  future  increment,  would  you  consider  that  you  were  defrauding  any- 
body, or  that  capitalizing  it  at  a  million  dollars  was  an  illegitimate 
transaction? 

Mr.  Frank.    Certainly  not. 

Mr.  Lewis.     You  would  consider  that  an  entirely  legitimate  transaction? 

Mr.  Frank.  That  is  done  all  the  time,  in  the  improvement  of  unim- 
proved property,  here  and  elsewhere. 

Mr.  Lewis.  That  is  your  understanding  as  to  what  was  done  in  the 
University  City  matter? 

Mr.  Frank.    I  think  so. 

Mr.  Austin.     I  ask  whether  that  is  in  strict  compliance  with  the  law? 

Mr.  Frank.    That  is  undoubtedly  a  hard  question  to  answer. 

The  Chairman.    What  is  your  opinion  judging  by  this  inquiry? 

Mr.  Frank.  I  would  not  base  any  charge  of  real  fraud  on  that.  It  is 
not  customary  to  charge  fraud  for  that  sort  of  thing. 

Mr.  McCoy.  Has  it  come  under  your  observation,  in  the  course  of  your 
real  estate  experience,  that  sometimes,  if  a  man,  or  set  of  men,  purchase  a 
large  tract  of  land,  there  are  immediately  other  people  in  the  community 
who  say  to  themselves,  "Why,  we  ought  to  have  got  in  on  that,"  and  who 
are  immediately  willing  to  pay  a  higher  price  for  that  land? 

Mr.  Frank.  Undoubtedly,  because  they  get  the  judgment  of  these  other 
men,  and  act  on  it;  they  follow  their  judgment. 

Mr.  Redfield.  Are  you  familiar  with  real  estate  operations  on  Long 
Island  and  Staten  Island? 

Mr.  Frank.     Somewhat. 

Mr.  Redfield.  Is  it  not  a  fact,  Mr.  Frank,  that  frequently  a  very  large 
block,  as  it  is  termed,  of  real  estate  taken  by  one  or  a  group  of  strong 
holders  immediately,  without  any  further  action,  becomes  at  once  very 
valuable? 

Mr.  Frank.     Undoubtedly. 

Mr.  Redfiei-d.  Isn't  the  fact  that  you  have  just  stated  in  response  to  my 
question,  the  usual  and  normal  result? 

Mr.  Frank.    Certainly. 

Mr.  Redfield.  Is  it  not  a  fact — I  am  now  going  to  ask  you  to  be  very 
careful  to  answer  this,  as  you  have  all  the  other  questions — is  it  not  a  fact, 
that  that  is  the  usual  basis  upon  which  large  and  conservative  operators 
proceed? 

Mr.  Frank.  Yes !  I  think  that  can  be  demonstrated  in  this  city — not 
only  with  respect  to  large  blocks  of  suburban  property,  but  with  respect  to 
large  holdings  of  city  property  as  well. 

Any  question  as  to  Lewis'  good  faith  in  tliis  transaction  is  thus 
seen  to  be  fully  covered  by  his  withholding  the  common  stock  from 
the  market,  and  offering  for  sale  only  so  much  of  the  preferred 
stock  as  was  necessary  to  develop  the  property  and  thereby  enhance 
its  value.  The  final  test  of  his  judgment  as  to  the  future  value  of 
the  land  as  bearing  upon  the  sum  for  which  the  company  should  be 
incorporated  was  settled  by  the  event.  Within  two  years  this  tract 
was  appraised  by  the  foremost  real-estate  experts  of  St.  Louis  at 


220  THE  SIEGE  OF  UNIVERSITY  CITY 

one  million  dollars  and  upwards.  Actual  sales  at  a  rate  which  would 
exceed  that  valuation  had  then  been  made  to  the  amount  of  more 
than  double  the  total  of  the  original  purchase.  The  longer  this 
wJiole  affair  has  been  tried  out  in  the  crucible  of  criticism,  the  more 
clearly  the  gold  of  Lewis'  sound  practical  judgment  is  separated 
from  the  dross  of  bias,  prejudice  and  mere  oi^inion  of  his  critics. 
In  real  estate  values  it  is  time  that  tells.  Time  has  shown  that  the 
University  Heights  Realty  and  Development  Company  was  under, 
rather  than  over-capitalized,  and  that  no  one  by  any  possibility 
could  have  been  injured  or  defrauded  by  the  extent  or  manner  of 
its  cajDitalization. 

As  to  the  way  the  financial  end  was  handled  through  the  Mer- 
chants-Laclede  Bank  and  the  National  Bank  of  Commerce,  Lewis 
appears  to  have  acted  upon  the  advice  of  men  wlio  at  that  time  were 
far  more  experienced  than  himself  in  transactions  of  such  magni- 
tude. The  deal  with  the  Merchants-Laclede  Bank  for  the  original 
purchase  was  handled  by  Messrs.  Hoskins  and  Camp.  The  legal 
formalities  of  the  incorporation  of  the  University  Heights  Com- 
pany involving  tlie  passing  in  and  out  of  the  million-dollar  check, 
were  performed  under  the  advice  of  attorneys  and  with  the  consent 
and  approval  of  the  authorities  of  the  National  Bank  of  Commerce, 
then,  as  now,  one  of  the  foremost  banking  institutions  of  St.  Louis. 
The  cashier  of  this  bank,  Mr.  John  A.  Lewis,  who  shortly  after  the 
incorporation  of  the  University  Heights  Company  became  a  mem- 
ber of  its  board  of  directors,  wlien  examined  on  this  transaction  by 
the  Ashbrook  Committee,  said: 

On  looking  this  matter  up  I  found  on  our  city  ledger  a  deposit  made  on 
November  2,  1903,  for  one  million  dollars  to  the  credit  of  the  University 
Heights  Realty  and  Devolpment  Company.  There  was  another  deposit  of 
even  date  to  the  credit  of  the  Development  and  Investment  Company  of 
the  same  amount.  I  found  also,  on  the  same  date,  two  debits  of  like  sums 
against  the  two  concerns.  Presumably,  the  two  companies  drew  their  checks 
reciprocally  for  one  million  dollars,  and  thus  the  account  was  cancelled 
and  closed. 

Three  notes  in  the  sum  of  three  hundred  and  thirty-three  thou- 
sand, three  hundred  and  odd  dollars  each,  were  also  turned  in  by 
Mr.  John  A,  Lewis  to  the  National  Bank  of  Commerce  as  its  cashier 
or  assistant  cashier,  and  passed  to  the  credit  of  the  University 
Heiglits  Company  in  connection  with  its  incorporation.  These  notes 
represented  the  million  dollars  against  which  the  check  of  tliat  con- 
cern was  drawn.  Tlie  whole  affair,  in  short,  was  a  paper  trans- 
action made  for  the  purpose  of  technical  comjiliance  with  the  law, 
by  the  payment  of  legal  money.  But  the  fact  that  this  was  done 
through  a  leading  St.  Louis  bank,  by  its  advice  and  with  its  con- 
sent, is  in  itself  assurance  that  it  was  in  no  wise  fraudulent. 

LKWIS'  HOME  AT  UNIVERSITY  CITY. 

Lewis'  mind  was  quick  to  grasp  the  fact  that  in  his  original  pur- 
chase he  held  the  key  to  the  whole  of  the  city's  westward  growth. 
As  Lewis  aptly  puts  it,  University  City  is  located  like  a  cork  in  a 


THE  DREYFUS  CASE  OF  AMERICA  221 

bottle.  The  city  of  St.  Louis,  being  confined  by  the  horseshoe  bend 
of  the  river,  its  only  possible  growth  is  westward  parallel  to  Forest 
Park,  and  this  growth  must  of  necessity  enhance  all  real-estate 
values  in  that  quarter.  Lewis,  therefore,  determined  to  locate  his 
own  home  on  the  newly  acquired  property,  and  to  interest  himself 
in  the  future  development  of  the  entire  region  as  a  separate  little 
city,  with  himself  as  mayor,  and  with  his  home  in  the  centre.  He 
thus  tells  how  he  selected  and  acquired  the  site  for  his  home: 

On  one  corner  of  the  first  tract  of  approximately  eighty-five  acres  which 
we  purchased,  was  located  a  very  large  spring.  This  was  surrounded  by  a 
kind  of  swamp,  so  that  in  figuring  the  first  values  of  the  property  that 
piece  was  practically  eliminated.  I  accepted  that  piece  as  a  gratuity  from 
the  University  Heights  Company  as  consideration  for  my  negotiating  the 
purchase  by  the  Lewis  Publishing  Company  of  the  corner  lot  where  the 
Magazine  Building  now  stands  and  for  other  services.  It  could  not  have 
been  placed^  upon  the  market  at  a  fair  valuation  without  expensive  grading, 
but  I  took  it  as  it  was,  and  made  it  the  location  of  my  home,  landscaping 
and  beautifying  it.  The  spring  is  now  made  into  an  attractive  swimming 
pool.  The  overflow  floods  the  lowest  part  of  the  ground  and  that  has  been 
turned  into  a  fish-pond. 

Mr.  Frank,  under  examination  by  Lewis,  also  testified  as  to  his 
recollection  of  this  locality.     He  said: 

I  recall  the  piece  in  the  southwest  corner  of  the  original  tract.  It  con- 
tained a  large  spring,  surrounded  by  a  swamp.  There  used  to  be  an  old 
well  and  a  dump  there.  In  my  judgment  it  was  an  absolutely  worthless 
piece  of  property.  I  think  it  was  the  worst  piece  there,  and  you  have  made 
it  the  most  attractive. 

MILLIONS    IN    OPTIONS. 

Lewis,  after  making  the  original  purchase,  and  deciding  to  locate 
his  proposed  new  building  and  his  own  residence  upon  the  jDroperty^. 
concluded  to  extend  his  real-estate  interests  as  widely  as  possible. 
He  thus  describes  the  up-building  of  his  real  estate  interests: 

I  took  an  option  on  every  piece  of  land  in  the  neighborhood,  and  gradu- 
ally acquired  a  total  of  two  thousand,  six  hundred  acres  under  options, 
Some  of  them  running  three,  four,  and  five  years.  I  agreed  to  carry  the 
interest  and  taxes  in  the  belief  that  they  would  be  covered  many  times 
over  by  the  added  increment  in  value.  This  included  all  of  the  surrounding 
land.  The  total  amount  called  for,  under  these  options,  to  acquire  abso- 
lute ownership,  according  to  my  recollection,  was  about  four  million  dol- 
lars. A  recent  appraisal  of  these  same  properties  shows  a  present  value 
of  nearly  thirty  million  dollars.  This  is  partly  in  St.  Louis  and  partly  in 
University  City,  A  great  deal  of  it  is  already  built  up  with  superb  resi- 
dences. The  increase  in  value  became  very  rapid  when  it  was  known  that 
the  World's  Fair  was  going  to  be  located  right  adjoining.  The  property 
was  doubling  and  doubling  in  value.  As  the  land  was  improved  it  quickly 
began  to  be  sought  after.  In  a  year  or  two  we  had  sold  off  nearly  half  of 
Section  One  at  various  prices  which  amounted  in  all  to  eight  hundred 
thousand  dollars.  And  we  still  had  one-half  of  this  section  left.  This  con- 
firmed me  in  my  view  of  the  value  of  the  land.  As  fast  as  the  University 
Heights  Company  developed  the  land  which  it  had  purchased  and  placed 
it  on  the  market,  the  money  was  employed  to  take  on  the  other  properties 
which  I  had  already  purchased  personally  through  the  Development  and 
Investment  Company,  or  had  under  option.  I  then  had  Sections  Two  and 
Three  under  option.  I  sold  them  to  the  company  at  an  advance  on  my 
option,  but  at  the  value  appraised  by  reputable  experts.     I  did  not  take 


222  THE  SIEGE  OF  UNIVERSITY  CITY 

the  moncT,  but  took  equivalent  holdings  in  the  University  Heights  Com- 
panj  and  placed  them  in  the  Development  and  Investment  Company.  My 
own  profit  I  made  in  my  interest  in  the  common  stock  of  the  former  con- 
cern. In  other  words,  Instead  of  having  a  private  personal  ownership,  I  had 
a  proportionate  holding  in  the  realt}^  company. 

These  were  then  undeveloped — just  acreage  properties.  The  tract  on 
the  opposite  side  of  Delmar,  north  of  the  first  section  purchased,  is  known 
as  Section  Two;  west  of  that,  on  the  south  side  of  Delmar,  is  Section  Three. 
Those  three  properties  were  all  owned  outright  by  the  University  Heights 
Company.  This  land  was  all  paid  for  in  cash.  We  carried  some  loan  on 
them,  and  afterwards  borrowed  considerably  on  them,  but  they  were  th? 
property  of  the  company  with  clear  title.  Then,  west  of  Section  One  is 
Section  Four.  Beyond  that  Sections  Five,  Six  and  Seven.  Those  were  my 
personal  property.  I  took  what  earnings  and  profits  I  was  making  per- 
sonally and  bought  land  there,  paying  as  little  down  for  it  as  I  had  to, 
and  getting  a  part  purchase  mortgage  for  a  long  period  on  the  balance.  I 
knew  that  I  would  have  to  carry  it  four  or  five  years  before  it  came  on 
the  market.  It  was  simply  a  question  of  interest  and  taxes,  against  incre- 
ment of  value. 

The  land  of  the  University  Heights  Company  doubled  in  value  within 
a  year  or  two.  What  we  had  sold  brought  in  eight  hundred  thousand  dol- 
lars. This  was  not  all  paid  in  cash.  A  sum  was  paid  down  and  so  much 
regularly  thereafter.  What  we  had  left  in  Section  One  was  wortli  as  much 
again.  This,  added  to  the  other  sections,  made  a  total  value  of  something 
like  three  millions  dollars.  This  was  not  counting  my  own  holdings.  1 
began  to  have  the  idea  that  T  had  a  pretty  good  thing. 

I  then  proceeded  to  develop  and  improve  the  University  Heights  prop- 
erty, laying  it  all  out  beautifully  with  winding  boulevards  and  the  highest 
class  of  improvements  of  all  kinds.  Tlie  money  from  the  sale  of  the  pre- 
ferred stock  was  used  as  it  came  in,  to  lay  out  the  sewer  systems,  boule- 
vards and  other  improvement  work.  I  had  expert  landscape  gardeners  from 
Boston  to  assist  our  architects  in  laying  out  the  boulevards.  I  planned 
bigger  and  more  beautiful  things — a  model  city.  In  the  centre  I  erected 
my  own  central  executive  office  in  the  octagon  tower  known  as  the  Woman's 
Magazine  Building,  and  another  structure  for  the  Magazine  printing  plant. 
I  laid  out  the  space  in  front  with  lawns,  and  set  apart  a  central  camj^us  for 
a  university.  The  rest  of  the  section  was  laid  out  in  roads  and  boule- 
vards as  the  most  beautiful  residence  estate  in  America.  All  the  lots  were 
restricted.  Special  localities  were  reserved  for  churches,  schools,  and  libra- 
ries. We  had  plenty  of  money  for  making  improvements.  We  wanted  to 
make  on  Universit}'  Heights  the  model  city  of  the  world. 

We  spent  more  than  one  million  dollars  in  improvements  and  build- 
ings on  Section  One  alone.  Water  was  brought  more  than  twenty  miles 
through  the  mains  of  the  St.  Louis  County  Water  Companj\  A  postoffice 
was  established  in  the  Magazine  Building.  We  had  our  own  telephone  ex- 
change. Houses  began  to  go  xip,  costing  from  five  thousand  to  fifty  thou- 
sand dollars  each.  Each  home  was  surrounded  by  trees,  shrubs,  and 
flowers.  Among  the  oaks  at  the  crest  of  the  Heights  was  erected  the  fine 
and  costly  home  of  Mr.  Jackson  Johnson,  a  wealthy  citizen  of  St.  Louis. 
It  became  part  of  our  plan  that  the  government  of  this  residence  park  be 
in  the  hands  of  the  residents  themselves  through  their  own  committees. 

There  was  one  corner  of  this  estate  outside  the  St.  Louis  limits  which  was 
at  that  time  covered  with  low  class  inns  and  saloons  or  dives.  Fights 
occurred,  and  one  night  three  people  were  killed  in  one.  One  of  our  first 
undertakings  was  to  clear  these  away.  Opposite  was  the  race  track,  and  it 
was  then  my  idea  to  remove  the  race  track  also,  but  shortly  afterwards 
the  racing  was  suppressed  by  law,  and  we  had  no  further  trouble  from  that 
source. 


THE  DREYFUS  CASE  OF  AMERICA  223 

A  brief  summary  of  this  transaction,  and  of  Lewis'  expectations 
as  to  the  future,  is  found  in  a  letter  written  by  him  under  date  of 
January  7,  1903,  to  Wm.  H.  Gorse,  of  the  Missouri  Trust  Com- 
pany of  St.  Louis,  which  will  be  of  interest  here.     Fie  said: 

In  order  to  secure  proper  facilities  for  my  publishing  business,  which 
now  requires  a  verj  large  plant,  I  have  purchased  the  eighty-five  acres  of 
land  directly  west  of  Delmar  Garden  on  Delmar  Boulevard.  I  was  unable 
to  get  the  corner  lot  which  I  wished,  without  purchasing  the  entire  tract. 
In  order  to  handle  the  proposition  I  organized  the  University  Heights 
Realty  and  Development  Company  with  a  capital  of  one  million  dollars. 
This  capital  was  fully  paid  in  cash,  and  every  requirement  of  the  law  was 
very  carefuUy  complied  with.  The  company  then  purchased  the  land.  Of 
this  capital  three  hundred  thousand  dollars  is  preferred  stock  bearing  six 
per  cent  cumulative  interest.  The  balance  of  seven  hundred  thousand  dol* 
lars  is  common  stock.  I  placed  a  mortgage  of  two  hundred  thousand  dollars 
on  the  land,  of  which  I  have  today  paid  off  ten  thousand  dollars. 

I  brought  the  best  engineer  in  the  country  from  Boston  and  had  him 
lay  out  the  land  into  the  finest  private  residence  park  in  the  West.  All 
the  surveys  are  now  completed  and  all  the  contracts  are  arranged,  ready 
for  the  construction  of  the  streets  and  boulevards.  We  expect  to  have  the 
property  on  the  market  by  the  spring  months. 

I  then  placed  the  preferred  stock  on  the  market  for  sale,  advertising  it 
extensively  in  the  public  prints.  I  have  already  received  subscriptions  for 
about  one-half  of  it.  The  balance  is  being  very  rapidly  taken  up.  I  have 
arranged  with  the  National  Bank  of  Commerce  to  act  as  trustee,  so  that 
when  the  subscription  is  complete  the  entire  three  hundred  thousand  dol- 
lars will  be  in  their  hands.  They  will  then  pay  off  the  mortgage,  so  that 
there  will  be  no  encumbrance  on  the  land,  and  there  will  remain  one  hun- 
dred thousand  in  cash  to  pay  for  the  improvements. 

Under  our  plan  there  are  thirty  thousand  front  feet  of  resi- 
dence lots  available  for  sale.  We  have  just  been  offered  a  contract  by 
responsible  parties  to  sell  the  land  out  for  us  at  auction  under  bond,  so 
as  to  net  us  an  average  of  thirty-five  dollars  per  front  foot,  two  hundred 
feet  deep.  On  this  basis  the  sale  of  ten  per  cent  of  this  land  in  building 
lots  would  retire  the  preferred  stock,  thus  reducing  the  capital  to  seven 
hundred  thousand  dollars,  of  which  I  will  own  six  hundred  thousand  dol- 
lars. The  property  being  outside  the  city  limits  has  only  county  taxes; 
find  while  it  may  take  me  eight  or  ten  years  to  work  off  all  this  land,  yet 
at  the  same  time  under  our  schedule  of  prices,  when  it  has  been  sold,  it  will 
have  netted  us  a  total  of  three  million  dollars  and  a  profit  of  over  two 
millions. 

WAX    MODEL    OF    THE    CITY    BEAUTIFUL. 

Those  who  characterize  Lewis  as  a  dreamer  would  do  well  to  con- 
sider the  insight  by  which  he  thus  penetrated  the  complex  real  es- 
tate conditions  of  St.  Louis,  and  arrived  unerringly  at  the  true  key 
to  its  future  development.  They  should  also  study  the  process  by 
which  he  confirmed  his  conclusion.  They  should  think  over  and 
understand  his  skilful  method  of  fi.nancing  his  plans.  Any  who  may 
still  suppose  that  Lewis'  real  estate  operations  were  mere  specula- 
tions and  that  the  resulting  increments  of  value  were  the  result  of 
luck  and  chance,  without  any  special  work  on  his  part,  should  pon- 
der well  the  part  played  by  Lewis  personally  in  the  actual  planning 
of  a  model  city. 

Shortly  after  writing  the  above  quoted  letter  in  February,  1903, 
Lewis  employed  a  local  expert  to  make  a  complete  survey,  with  full 


224  THE  SIEGE  OF  UNIVERSITY  CITY 

computations,  measurements  and  maps,  of  his  newly  purchased 
property.  This  included  all  the  elevations  and  other  topographical 
features.  Tlien,  with  his  own  hand,  he  transferred  the  whole  to 
scale  upon  an  enormous  drawing  board  specially  prepared  for  this 
purpose.  He  fixed  the  elevations  by  means  of  pins  driven  into  the 
board  at  the  right  depth  and  proper  intervals.  He  then  modeled 
the  topography  of  the  entire  tract  in  true  relief  with  wax.  Every 
elevation  and  depression  was  accurately  molded.  All  the  existing 
cultural  features  were  shown.  Every  characteristic  of  the  property 
was  reproduced  in  miniature. 

Lewis  spent  many  hours  experimenting  upon  this  model.  He 
was  able  to  try  out  all  possible  forms  of  landscape  engineering.  A 
mass  of  wax  removed  from  an  elevation,  when  squared  up  and  meas- 
ured to  scale  represented  a  corresponding  number  of  cubic  yards  of 
earth  to  be  removed.  The  same  mass  could  then  be  applied  to  a 
nearby  depression.  This  would  show  the  proportionate  level  of  the 
hollow  which  the  earth  removed  from  the  elevation  would  fill. 
Lewis'  instructions  to  his  engineers  and  contractors  were  thus  based, 
not  upon  guesswork,  but  upon  the  most  careful  and  exhaustive  ex- 
periment. 

When  the  engineers  had  completed  their  plat  of  the  streets  and 
boulevards  under  his  supervision,  he  modeled  these  accurately  in 
the  wax.  He  then  put  in  some  little  tubes  reduced  to  scale  in  pro- 
portion to  tlie  dimensions  of  the  proposed  sewer  pipes,  and  by  means 
of  a  gardener's  watering  pot  and  sprinkler  he  produced  miniature 
rainstorms.  By  using  measured  quantities  of  water  he  reproduced 
in  this  way  the  amount  of  rainfall  of  all  ordinary  kinds  of  storms 
according  to  local  weather  repoi'ts.  He  also  tried  the  effect  of  any 
possible  surplus  of  rainfall  from  a  spring  freshet  to  a  cloudburst. 
All  these  conditions  be  carefully  observed.  The  net  results  of  this 
study  was  a  high  degree  of  intelligent  supervision  of  the  work  of 
the  contractors  and  landscape  engineers.  This  facile  adaptation 
of  his  natural  aptitude  for  mechanical  devices  and  his  inventive  skill 
to  new  problems,  is  highly  characteristic  of  Lewis,  and  accounts  in 
no  small  measure  for  his  astonishing  rise  to  affluence. 

THE    inspectors'   INVESTIGATION   AND   REPORT. 

The  remaining  history  of  University  Heights  as  a  real-estate  sub- 
division jirior  to  Lewis'  troubles  with  the  Government,  was  sketched 
by  him  in  response  to  the  demands  of  postoffice  inspectors  during 
their  investigation  in  the  spring  of  1905.  After  rehearsing  the 
facts  as  to  the  organization  of  tlie  company,  Lewis  asserted  that 
nearly  three  miles  of  boulevards,  sidewalks,  sewers,  and  water- 
mains  had  by  that  time  been  put  in  and  j^aid  for.  He  added  that 
improvements  in  the  shape  of  residences  and  other  permanent  build- 
ings to  the  extent  of  nearly  one  million  dollars  had  been  erected. 

Of  the  entire  three  hundred  thousand  dollars'  worth  of  preferred 
stock  placed  upon  the  market,  only  about  seventy-two  thousand  dol- 
lars' worth  was  outstanding.     All  the  transactions  of  the  corporation 


THE  DREYFUS  CASE  OF  AMERICA  226 

from  the  beginning  had  been  under  the  direct  supervision  of  the 
National  Bank  of  Commerce.  Every  dollar  received  from  the  pre- 
ferred stock  was  paid  directly  to  that  institution  as  trustee,  and  by 
it  disbursed  on  the  contractors'  vouchers  against  permanent  improve- 
ments on  the  property.     Lewis  continues: 

On  January  21,  1905,  at  a  meeting  held  pursuant  to  legal  call  of  the 
stockholders  and  directors,  it  was  voted  to  purchase  the  additional  land 
lying  south  of  the  original  purchase  toward  the  magnificent  buildings  of 
Washington  University,  and  thence  westward,  a  tract  of  fifty-seven  acres. 
This  land  is  now  being  laid  out  to  correspond  to  the  original  purchase.  The 
whole  will  constitute  a  great  private  residence  tract. 

At  a  meeting  of  the  directors  and  stockholders  it  was  voted  to  make 
an  issue  of  ten-year  bonds  at  five  per  cent  to  the  extent  of  seven  hundred 
and  fifty  thousand  dollars.  These  bonds  will  cover  all  the  land  and  im- 
provements of  the  company,  except  the  tract  occupied  by  the  Woman's 
Magazine  plant  and  that  occupied  by  the  private  residence  of  E.  G.  Lewis. 
These  bonds  are  based  on  a  valuation  of  twenty-four  dollars  per  front 
foot.  They  allow  a  fund  of  nearly  one  hundred  thousand  dollars  to  be 
set  aside  for  the  completion  of  the  improvements.  SuiBcient  funds  are  also 
set  aside  to  pay  the  first  year's  interest.  The  company  will  then  have  a 
frontage  of  thirty-one  thousand  feet  available  for  fine  residences.  Already 
four  residences  costing  from  twelve  thousand  dollars  to  one  hundred  and 
twenty  thousand  dollars  each  have  been  completed.  Another  is  in  construc- 
tion.    Twelve  more  are  under  contract. 

The  company  is  holding  its  land  at  prices  ranging  from  thirty-five  to 
one  hundred  dollars  per  front  foot  and  the  demand  is  good.  Under  this 
bond  issue  the  company  will  retire  the  preferred  stock,  take  up  all  encum- 
brances and  mortgages  and  have  in  the  treasury  in  the  neighborhood  of 
one  hundred  thousand  dollars  to  complete  improvements.  The  investors 
who  purchase  the  preferred  stock  will  have  received  their  money  back  with 
six  per  cent  per  anmun  since  the  date  of  their  investment.  They  will 
retain  as  an  additional  profit  their  twenty-five  per  cent  of  the  common 
stock  given  them  as  bonus.  Within  the  life  of  the  bond  issue  we  expect  the 
land  of  the  company  to  average  one  hundred  dollars  per  front  foot.  A 
low  valuation  of  it  at  tlie  present  time  would  be  fifty  dollars  per  front  foot 
throughout.  The  land  of  the  Universitj''  Heights  Company  within  ten  years 
should  average  one  hundred  dollars  per  front  foot.  Its  profits  would  then 
exceed  two  millions.  This  would  be  an  average  yearly  net  income  for  the 
ten  years  of  two  hundred  thousand  dollars  on  its  investment.  I  do  not 
believe  that  these  figures  are  overstated,  as  they  would  be  corroborated 
by  the  best  real-estate  men  of  St.  Louis. 

By  postoffice  tradition  Lewis  is  presumed  to  be  guilty  of  fraudu- 
lent intent  in  all  of  his  various  undertakings.  Following  this  in- 
vestigation Inspectors  W.  T.  Sullivan  and  James  L.  Stice  made  a 
report  to  Inspector-in-Charge  Fulton  under  date  of  June  2,  1905, 
recommending  that  "E.  G.  Lewis  and  the  University  Heights  Realty 
and  Develo]jment  Company  be  cited  to  show  cause  why  a  fraud 
order  sliould  not  issue  against  them." 

After  rehearsing  the  facts  as  to  the  organization  of  the  company^ 
and  tlie  method  by  which  it  was  financed,  they  insert  Lewis'  state- 
ment of  its  assets  and  liabilities.  Commenting  upon  his  estimate 
of  two  and  a  half  million  dollars  as  the  actual  value  of  the  thirty- 
one  thousand  front  feet  remaining,  they  assert  that  on  this  basis 
it  M'ould  be  necessary  to  obtain  nearly  one  hundred  dollars  per  front 
foot  for  the  property.    A  simple  division  will  show  what  is  the  exact 


226  THE  SIEGE  OF  UNIVERSITY  CITY 

figure  they  should  have  stated,  namely,  eighty  dollars.  The  inspec- 
tors, in  other  words,  took  upon  themselves  to  exaggerate  Lewis'  own 
roseate  expectations  by  twenty-five  per  cent.     Then  they  say: 

While  we  do  not  pretend  to  be  experts  on  real  estate  values,  yet  we  do 
own  St.  Louis  property.  Our  observation  and  experience  causes  us  to 
express  the  opinion  that  when  the  expenses  of  marketing  this  property  is 
deducted,  it  will  not  average  fifty  dollars  per  front  foot. 

The  inspectors  then  comment  upon  the  proposed  bond  issue  of 
seven  hundred  and  fifty  thousand  dollars.  The  intent  of  this  was 
to  retire  the  preferred  stock  held  by  the  Bank  of  Commerce  as 
trustee,  and  consolidate  all  the  indebtedness  of  the  company.  They 
express  the  opinion  that  this  transaction  was  regrettable.  They 
remark  that  "as  a  legitimate  venture  it  would  have  been  more  safely 
handled  if  the  Bank  of  Commerce,  a  reliable  institution,  had  entire 
control."  They  then  assert  that,  in  their  opinion,  Lewis  "holding 
a  majority  of  the  stock,  can  now  manipulate  it  as  he  desires."  They 
assert  their  opinion  that  "when  the  need  of  money  again  appears 
a  new  bond  issue  will  undoubtedly  be  put  on  the  market  by  the  aid 
of  the  Woman's  Magazine  and  Woman's  Farm  Journal,"  The  in- 
spectors, it  will  be  observed,  have  no  doubts.  After  commenting 
upon  two  transactions  between  the  University  Heights  Company 
and  People's  Bank  (which  they  omit  to  state  were  necessary  steps 
in  connection  with  the  proposed  bond  issue)  they  arrive  at  the  fol- 
lowing extraordinary  conclusion: 

This  company  is  considered  by  us  to  be  the  only  legitimate  proposition 
promoted  by  Mr.  Lewis,  and  according  to  the  above  statement  it  is  very 
doubtful  if  the  stock  can  ever  be  taken  up  at  par,  ,  .  ,  This  concern  is, 
therefore,  one  of  the  numerous  devices  promoted  with  the  money  of  others, 
and  one  of  the  ramifications  in  his  endless  chain  plan  of  robbing  Peter 
to  pay  Paul,  but  not  at  any  time  losing  sight  of  the  interest  of  Lewis. 

In  itself,  separated  from  the  management  of  Lewis,  we  would  not  feel 
justified  in  a  drastic  recommendation;  but  with  his  management,  and  the 
fact  that  by  the  time  the  improvements  are  completed  we  believe  the  capital 
will  be  so  seriously  impaired  that  the  further  use  of  the  mails  in  the  sale 
of  stock  will  certainly  result  in  fraud,  in  connection  with  his  other  schemes, 
we  recommend  that  E.  G.  Lewis  and  the  University  Heights  Realty  and 
Development  Company  be  cited  to  show  cause  why  a  fraud  order  should  not 
issue  against  them. 

Here  the  right  is  assumed,  as  inherent  in  the  function  of  post- 
ofFice  inspectors,  to  sit  in  judgment  upon  the  probable  outcome  of 
commercial  ventures,  to  decide  upon  real  estate  values,  and  to  set 
up  their  personal  opinion  in  contradiction  to  the  mature  judgment 
of  experts  who  have  made  a  special  and  exhaustive  study  of  the 
subject,  comment  on  these  propositions  would  seem  to  be  unneces- 
sary. 

The  history  of  the  University  Heights  Company  will  come  up  for 
further  consideration  in  connection  with  the  story  of  the  People's 
United  States  Bank.  We  must  now  take  up  the  story  of  World's 
Fair  Days  at  St.  Louis, 


CHAPTER  X. 
WORLD'S  FAIR  DAYS. 

Organization  of  the  Lewis  Publishing  Company — Final  Pur- 
chase  OF  THE    RiCHARZ   PrESSROOMS FINANCIAL   P'aCTS  AND 

Prospects — Laying     the     Cornerstone — Camp     Lewis — 
Popularity    of    the    Encampment — The    World's    Fair 
Contest  Company — William  Jennings  Bryan  Objects — 
Indictments  Found  and  Quashed — Settlement  of  the 
Contest  —  The    Postoffice    Inspectors'    Report  —  The 
Bachelor  Pneumatic  Tube  Company — California  Vine- 
yards Company  and  Others. 
Lewis  is  first  of  all  a  publisher.    This  is  the  true  key  to  his  life- 
story.     All  his  other  activities  either  lead  to  or  grow  out  of  the 
Winner   and  the  Woman's   Magazine.     Once  this   fact  is   grasped, 
every  incident  in  his  career  can  be  clearly  seen  in  its  true  value 
and  relation.     All  his  other  efforts  are  intended  to  promote  the  cir- 
culation of  his  papers  by  giving  new  advantages  to  his  readers  or 
else  they  come  in  by  way  of  speculation^  or  investment  of  surplus 
profits.     All  are  designed  to  extend  the  influence  and  enhance  the 
value  of  the  Woman's  Magazine  and  its  sister  publications. 

The  origin  of  his  big  real  estate  interests  is  a  good  example.  They 
all  grew  out  of  his  effort  to  find  a  good  site  for  the  new  home  of 
the  Woman's  Magazine.  His  first  thought  was  to  get  out  of  town- 
His  second  to  be  near  the  World's  Fair.  He  picked  out  the  tract 
formerly  owned  by  the  Bonhomme  Land  Company  for  the  double 
reason  that  it  was  across  the  city  limits  in  St.  Louis  County  and, 
also,  just  across  the  fields  from  the  World's  Fair  Grounds  in  Forest 
Park.  The  fact  that  he  was  unable  to  buy  this  coveted  location 
without  acquiring  the  entire  tract  of  eighty-five  acres  was  what 
caused  him  to  go  far  more  deeply  into  the  real-estate  business  than 
he  first  intended.  All  of  his  early  promotions  may,  therefore,  be 
regarded  as  merely  preliminary  to  the  promotion  of  the  Lewis  Pub- 
lishing Company,  which  in  turn  gave  rise  to  the  People's  Bank. 
These  are  the  two  largest  and  most  characteristic  of  the  Lewis  en- 
terprises and  the  two  in  which  the  interest  of  this  narrative  centres. 
The  project  for  the  consolidation  of  all  his  various  publishing  in- 
terests into  one  large  company  seems  to  have  taken  definite  shape 
in  Lewis'  mind  soon  after  the  first  announcement  that  the  World's 
Fair  of  1904-  was  to  be  held  in  St.  Louis.  This  plan  had  been  dis- 
cussed quite  openly  before  his  rupture  and  settlement  with  Nichols 
in  the  spring  of  1902.  It  was  objected  to  by  that  young  man  on 
the  ground  that  there  were  no  funds  with  which  to  finance  it.     "We 

227 


228  THE  SIEGE  OF  UNIVERSITY  CITY 

hadn't  enough  to  buy  one  acre,"  said  Nichols,  "much  more  fifteen, 
and  put  up  a  big  building."  Yet,  no  sooner  had  the  Mail  Order 
Publishing  Company  been  reorganized,  and  a  new  secretary  elected 
to  replace  the  dubious  Nichols,  than  Lewis  took  steps  to  realize  his 
grand  project.  The  site  for  the  new  building  was  purchased,  as 
we  have  seen,  in  October,  1902,  for  a  moderate  sum  considering  its 
future  value.  The  deal  was  financed  without  difficulty.  The  Uni- 
versity Heights  Company  was  next  chartered,  organized  and 
launched. 

Lewis  then  made  a  private  arrangement  with  his  friend,  Kramer, 
whereby  the  latter  endorsed  Lewis'  paper  to  an  extent  that  would 
enable  him  to  procure,  at  the  National  Bank  of  Commerce,  all  the 
ready  cash  that  he  needed  to  pay  his  contractors  for  the  new  big 
building.  Architects  were  employed  to  design  the  plans.  AiFairs 
were  soon  in  train  to  break  ground  as  soon  as  the  snows  of  yester- 
year should  melt  in  the  spring  of  1903  and  there  was  assurance  of 
seasonable  weather. 

THE   LEWIS   PUBLISHING   COMPANY. 

The  business  of  publishing  the  Woman's  Magazine  and  Woman's 
Farm  Journal  was  fast  becoming  a  civic  affair.  Far  more  people 
knew  of  the  city  of  St.  Louis  through  the  medium  of  Lewis  and 
his  papers  and  projects,  than  by  any  other  means  save  the  World's 
Fair  alone.  St.  Louis,  for  many  people  in  America,  meant  E.  G. 
Lewis.  Though  less  known  at  home  than  elsewhere,  his  plans  began 
to  bulk  somewhat  largely  also  in  the  eyes  of  the  local  public.  When, 
therefore,  Lewis  conceived  the  idea  of  associating  with  him  in  his 
enterprise  many  of  the  chief  representative  business  men  and  bank- 
ers of  St.  Louis,  he  had  no  great  difficulty  in  securing  the  co-opera- 
tion of  a  large  number.  Some,  indeed,  had  already  joined  his  other 
enterprises.  One  of  them,  Mr.  McMillan,  president  of  the  St.  Louis 
Union  Trust  Company,  was  his  first  backer,  had  lent  him  his  first 
five  hundred  dollars,  and  had  watched  his  projects  with  growing 
interest.  Many  had  already  benefited  either  financially  or  by  adver- 
tisement. When,  therefore,  in  the  fall  of  1902  and  all  through  the 
ensuing  winter,  Lewis  undertook  a  personal  canvass  on  off  days  from 
his  editorial  chair,  for  subscriptions  to  the  preferred  stock  of  the 
million-dollar  Lewis  Publishing  Company,  soon  to  be  incorporated, 
he  was  received  and  listened  to  M'illingly. 

We  here  get  another  glimpse  into  the  systematic  and  practical 
nature  of  his  methods.  He  first  prepared  a  list  of  the  leading  banks 
and  representative  business  enterprises  of  St.  Louis.  He  then 
picked  out  the  men  most  active  and  prominent  in  their  management. 
These  men  he  personally  visited  and  invited  to  join  him  as  stock- 
holders in  his  projected  enterprise.  He  set  apart  for  this  purpose 
the  entire  preferred  stock  of  two  hundred  thousand  dollars.  He 
then  specifically  limited  the  subscribers,  with  a  few  exceptions,  to 
the  same  precise  amount,  two  thousand,  five  hundred  dollars,  this 
being  not  too  large  nor  yet  too  small  for  the  sort  of  men  he  desired. 


THE  DREYFUS  CASE  OF  AMERICA  229 

He  was  thus  able  to  secure  as  stockholders  a  list  of  nearly  one  hun- 
dred representative  St.  Louisans. 

The  stock  was  offered  at  par,  and  the  amount  which  he  realized 
even  before  the  company  was  organized,  was  of  substantial  value  in 
financing  the  construction  and  equipment  of  the  new  building,  and 
in  paying  for  the  removal  thither  of  his  mechanical  plant.  Lewis' 
object  was,  however,  not  solely  a  financial  one.  It  was  largely  to 
gain  a  moral  effect.  He  meant  to  have  behind  him  the  prestige  of 
a  body  of  stockholders  of  highest  local  repute.  He  also  coveted 
the  active  co-operation  of  individuals  so  energetic  and  so  well  con- 
nected as  to  push  forward  the  financial  and  other  interests  of  his 
concern.  Lewis  was,  in  fact,  at  that  time  acting  as  a  sort  of  gen- 
eral advertising  manager  to  the  whole  city.  He  was  creating  inter- 
est in  St.  Louis  in  every  direction.  It  was  only  natural  that  promi- 
nent citizens  should  wish  to  help  his  enterprise,  and  so  they  did. 

Lewis'  offer  to  his  prospective  stockholders  was  flattering  and 
liberal.  The  stock  was  sold  at  par.  He  first  outlined  fully  his  pro- 
ject and  explained  that  the  common  stock  would  be  held  by  himself 
and  his  imm.ediate  associates.  He  pointed  out  that  only  the  pre- 
ferred stock  would  be  issued  to  the  city.  He  then  frankly  acknowl- 
edged that  his  object  was  not  so  much  to  secure  the  additional  cash 
investment,  as  the  moral  influence  of  the  names  of  the  subscribers. 
So  he  accepted  many,  if  not  all,  of  the  subscriptions  upon  the  dis- 
tinct understanding  that  if,  for  any  reason,  the  subscriber  desired  to 
be  relieved  of  his  investment,  he,  Lewis,  would  personally  repur- 
chase the  stock  at  face  value.  Many  of  the  subscribers  gave  their 
notes  for  the  amount.  Some  of  these  notes  were,  by  agreement,  made 
non-negotiable.  They  were  payable  only  to  Lewis,  and  could  not  be 
discounted  by  him  or  sold  to  others.  In  a  few  cases  he  agreed  that 
the  note  should  be  taken  up  only  by  indorsing  the  dividends  upon 
it  until  the  full  amount  had  been  earned  by  the  stock  itself.  The  ma- 
jority, however,  were  paid  in  cash.  Lewis,  in  every  instance  of  rec- 
ord, seems  to  have  complied  faithfully  and  honorably  with  the  terms 
of  his  agreement.  A  few  subscriptions  were  cancelled  and  taken 
up  by  Lewis.  But,  for  the  most  part,  the  group  of  men  represented 
by  this  preliminary  canvass  continued  as  his  stockholders  through- 
out the  stormy  period  which  followed,  and  still  remain  on  record  as 
members  of  the  Lewis  Publishing  Company. 

THE    ORIGINAL    STOCK    SUBSCRIPTIONS. 

The  autograph  signatures  on  the  original  subscription  agreement 
are  reproduced  on  another  page.  This  list,  to  a  local  reader,  reads 
like  a  page  out  of  the  Blue  Book  of  socially  and  financially  promi- 
nent St.  Louisans.  A  large  proportion  of  the  chief  banks  and  busi- 
ness enterprises  of  St.  Louis  are  represented  by  their  responsible 
heads,  or  active  managers.  The  only  possible  conclusion  which  can 
be  drawn  by  a  candid  investigator  is  that  Lewis  and  his  enterprises 
at  that  time  were  thought  of  highly,  and  that  his  project  was  cur- 
rently regarded  as  eminently  creditable  and  indeed  as  reflecting  great 


230  THE  SIEGE  OF  UNIVERSITY  CITY 

honor  on  the  city  of  St.  Louis.  Lewis  thus  tells  the  story  of  this 
enterprise,  in  his  testimony  before  the  Ashbrook  Committee: 

Early  in  1903  the  Development  and  Investment  Company  owned  the 
controlling  interest  in  the  stock  of  three  great  concerns — the  Mail  Order 
l-'ublishing  Company,  publishers  of  the  Woman's  Magazine,  capital  fifty 
thousand  dollars;  tiie  i'arm  Journal  Publishing  Company,  publishers  of  the 
Woman's  Farm  Journal,  capital  twenty-five  thousand  dollars;  and  the 
Richarz  Pressrooms,  where  these  papers  were  published,  capital  twenty-five 
thousand  dollars.  Each  of  these  corporations  had  long  grown  out  of  all 
proportion  to  their  original  capitalization.  To  consolidate  them  it  was 
necessary  to  purcluise  the  interests  of  the  small  stockholders.  This  was 
done  through  the  Development  Company,  which  put  up  the  necessary 
money  and  bought  up  all  outside  stockholders.  Many  of  them  made  a 
small  fortune  from  their  holdings.  The  debts  of  all  three  concerns  were 
paid   l)y  the   Development  Company. 

A  new  corporation  was  then  formed,  known  as  the  Lewis  Publishing 
Company,  with  a  capital  of  one  million,  two  hundred  thousand  dollars. 
This  publishing  company  having  formed  itself  into  one  of  the  largest  of 
its  kind  in  the  world,  it  was  thought  desirable  that  the  foremost  men  of 
St.  Louis  should  be  brought  into  association  with  it.  We  accomplished 
this  by  making  two  hundred  thousand  dollars  of  this  capital  preferred 
stock.  This  we  sold  only  to  such  men  as  would  bring  credit  and  give 
standing  to  the  enterprise.  The  Development  Company  received  prac- 
tically eight  hundred  thousand  dollars  of  the  capital  stock  of  the  new 
corporation.  The  tv.o  hundred  thousand  dollars  in  cash  realized  on  the 
preferred  stock  went  into  the  treasury.  This  was  to  be  retired  at  the  end 
of  five  years.  Then  the  Development  Company  would  own  eight-tenths  of 
this  great  publishing  business,  with  its  half  million  dollar  plant  free  of 
loan  or  mortgage.  For,  in  reorganizing  the  three  old  companies  in  one 
new  one,  we  provided  that  at  the  end  of  five  years  we  could  call  in  the 
preferred  stock  at  a  fixed  price.  The  readiness  and  kindly  spirit  with 
which  St.  Louis'  best  citizens  purchased  this  stock  was  the  most  gratifying 
thing  in  the  history  of  these  publications.  It  showed  that  a  prophet  is 
sometimes  not  without  honor  in  his  own  country.  The  best  men  of  St.  Louis 
recognized  our  great  publishing  business  as  one  which  would  be  a  credit 
to  any  city  in  the  world. 

As  the  propriety  of  capitalizing  the  assets  of  the  three  former 
enterprises,  amounting  collectively  to  no  more  than  one  hundred 
thousand  dollars,  at  twelve  and  a  half  times  that  sum,  has  been 
called  in  question,  the  steps  taken  by  the  Development  and  Invest- 
ment Company  in  this  promotion  may  be  briefly  mentioned.  Lewis' 
own  statement  is  this: 

The  three  properties  had  largely  outgrown  their  original  capitalization. 
Their  collective  value  was  far  in  excess  of  a  million  dollars.  I,  therefore, 
in  1903  incorporated  tiie  Lewis  Publisliing  Company  with  a  capital  of  one 
million,  two  hundred  thousand  dollars  to  take  over  the.se  three  growing 
concerns.  I  personally  solicited  the  subscriptions  to  the  stock  among 
friends  and  acquaintances  in  St.  Louis.  I  stated  what  I  proposed  to  do, 
going  into  full  particulars,  and  asked  if  they  would  like  to  join  with  me. 
This  was  the  preferred  stock.  The  common  stock  in  great  part  I  owned 
myself.     No  stock  of  any  kind  was  offered  at  ]>ublic  sale. 

FINAL  PURCHASE   OF  THE  RICHARZ   PRESSROOMS. 

In  a  letter  to  the  Missouri  Trust  Company  at  this  time,  Lewis 
makes  a  statement  as  to  the  value  of  his  publication  business.  He 
shows  total  assets  in  round  figures  of  four  hundred  and  fifty  thous- 


^First  factory  rented  and  equipped  by  tlw  Development  &  Investment  Company  at 
4961  Suburban  Track,  St.  Louis.  Occupied  from  November  j,  looi.  to  August  i, 
Tono.  The  early  experiments  on  the  Lewis  Addressing  Machine,  the  Telephone  Con- 
troller and  the  manufacture   of  paper  corks  were  made  here 

^Plant  of  the  United  States  Fiber  Stopper  Company,   University  City.     Erected  1909 


Views  taken  in  i^ii  iu  the  United  States  Fiber  Stopf'er  Company's  plant  at  University 
City 

''Machine  shop.        "Ltilest   models  of  cork   machines 


THE  DREYFUS  CASE  OF  AMERICA  233 

and  dollars;  liabilities  of  one  hundred  and  fifty  thousand  dollars, 
including  capital  stock,  or  a  net  surplus  of  three  hundred  thousand 
dollars.  The  total  cost  of  publishing  the  Woman's  Magazine 
for  one  year  was  estimated  at  one  hundred  and  eighty  thousand 
dollars.  The  total  revenue  based  upon  advertising  contracts  in 
hand,  subscription  revenue  at  the  present  rate  and  current  business 
running  without  contract^,  was  stated  as  in  excess  of  four  hundred 
thousand  dollars.  Hence  the  profit  for  the  ensuing  year  was  esti- 
mated at  two  hundred  thousand  dollars  and  upwards.  Commenting 
on  this  condition  of  affairs,  Lewis  says: 

In  making  up  our  statements,  the  most  valuable  part  of  our  property, 
namely,  the  franchise,  has  not  been  taken  into  consideration.  You  could 
probably  duplicate  the  plant  of  a  paper  like  the  St.  Louis  Globe-Democrat 
for  one  himdred  thousand  dollars;  but  you  could  not  purchase  the  paper 
itself  for  one  and  a  hiilf  millions.  Their  franchise  is  just  the  same  as  any 
other  part  of  their  assets.  It  would  not  be  placing  too  high  a  figure  on 
the  franchise  of  the  Woman's  Magazine  to  value  it  at  three-quarters  of  a 
miUion  dollars. 

We  also  own  the  Woman's  Farm  Journal,  a  separate  corporation,  which 
cost  us  fifteen  tjiousand  dollars  a  year  and  a  half  ago.  It  was  then  eleven 
years  old,  but  had  only  about  sixty  thousand  subscribers.  We  have  run 
the  paid  subscriptions  up  to  a  quarter  of  a  million.  The  advertising  rate 
has  increased  from  twenty-five  cents  to  one  dollar  a  line.  The  Farm  Journal 
is  now  clearing  about  one  thousand,  five  hundred  dollars  a  month,  and  is 
picking  up  very   rapidly.      Its   franchise  value   is,  therefore,   considerable. 

Upon  this  statement  he  requested  a  line  of  discount  of  fifty 
thousand  dollars  for  the  purpose  of  acquiring  the  plant  of  the 
Richarz  Pressrooms.  This  arrangement  appears  to  have  been  con- 
summated, for  we  find  him  in  February  of  1903  negotiating  with 
Richarz  for  the  purpose  of  buying  out  the  latter's  remaining  inter- 
est. A  deal  was  closed  under  date  of  February  9,  whereby  Richarz 
sold  to  the  Development  and  Investment  Company  his  entire  inter- 
est in  the  Richarz  Pressrooms  (including  all  stock  which  the  Devel- 
opment Company  did  not  own  at  that  time)  for  a  total  sum  of  fifty 
thousand  dollars.  Of  this,  thirty  thousand  dollars  was  paid  in  cash. 
The  remainder  was  assumed  by  the  purchaser  in  the  form  of  obliga- 
tions of  the  Pressrooms  Company.  All  the  obligations  of  Lewis  and 
his  enterprises  to  the  Richarz  Pressrooms  were  cancelled.  The  re- 
maining bills  receivable  of  the  Pressrooms  Company  became  the 
property  of  Richarz  individually. 

Richarz  was  then  given  a  five  year  contract  as  pressroom  man- 
ager at  a  salary  of  three  thousand,  six  hundred  dollars  per  annum. 
A  majority  of  the  capital  stock  of  the  Mail  Order  Publishing  Com- 
pany and  Farm  Journal  Company  was  already  in  possession  of  the 
Development  and  Investment  Company,  so  no  practical  difficulties 
were  had  in  those  quarters.  The  minority  stockholders  of  these 
concerns  after  sundry  negotiations  formally  authorized  Lewis  to 
vote  their  stock  in  the  event  of  the  formation  of  a  new  company. 
They  agreed  to  accept  in  full  payment  an   equivalent  amount  of 


234  THE  SIEGE  OF  UNIVERSITY  CITY 

stock  in   the  new  Lewis   Publishing  Company,  about  to   be   incor- 
j:iorated. 

FINANCIAL    FACTS    AND    PROSPECTS. 

About  this  time  Lewis,  in  course  of  a  statement  to  the  Missouri 
Trust  Company  as  of  May  16,  1903,  showed  total  assets,  including 
stocks  of  the  Lewis  Publishing  Company,  University  Heights  Com- 
pany, the  Controller  Company  and  tlie  Farm  Journal  Company,  at 
par  in  excess  of  two  millions  of  dollars,  as  against  a  total  liability 
of  twenty-eight  thousand  dollars.     He  stated  at  this  time: 

The  I-ewis  Publishing  Company  is  now  in  process  of  formation.  The 
charter  has  been  granhed  and  the  entire  details  will  probably  be  completed 
this  coming  week.  The  new  company  will  start  without  any  indebtedness 
or  liability.  It  will  have  about  two  hundred  and  thirty  thousand  dollars  in 
cash  in  bank.  Its  assets  in  machinery,  type  and  fixtures  will  amount  to 
nearly  two  hundred  thousand  dollars  more.  We  are  now  erecting  the 
largest  and  finest  publisliing  plant  in  the  world  in  University  Heights. 
This  will  be  completed  by  the  fall  of  this  year  without  any  indebtedness 
attachea  to  it.  At  the  present  time,  the  earnings  of  the  two  publications 
and  pressrooms  are  about  a  quarter  of  a  million  dollars  a  year,  net  profit. 
These  earnings  will  be  increased  at  the  end  of  ninety  days,  owing  to  a 
fifty  per  cent  increase  in  our  advertising  rate.  The  preferred  stock  is 
being  taken  up  by  the  foremost  men  in  St.  Louis.  About  one  hundred  and 
twenty  thousand  dollars  has  already  been  subscribed.  The  balance  would 
be  taken  by  the  present  subscribers,  except  that,  in  order  to  enlist  as  large 
a  number  of  prominent  men  as  possible  in  the  enterprise,  I  have  limited 
the  amount  held  by  any  one  member  to  two  thousand,  five  hundred  dollars. 

Lewis  discusses  further  the  status  of  the  Lewis  Publishing  Com- 
pany under  date  of  August  5  in  a  letter  to  the  Germania  Trust  Com- 
pany with  whom  he  was  then  negotiating  an  additional  line  of  dis- 
count : 

The  Lewis  Publishing  Company  is  a  consolidatfon  of  three  previous 
properties.  One  of  these — the  Mail  Order  Publishing  Company— was  pub- 
lisher of  the  "Woman's  Magazine,  the  largest  publication  in  the  world. 
This  has  a  circulation  now  exceeding  one  million,  four  hundred  thousand 
copies  of  each  issue  and  increasing  at  the  rate  of  from  sixty  to  ninety 
thousand  new  subscribers  per  month.  Another  was  publisher  of  the 
Woman's  Farm  Journal,  having  a  circulation  of  five  hundred  thousand 
copies  each  month.  I'he  third  was  the  Richarz  Pressrooms,  the  finest 
publishing  plant  in  St.  Louis,  where  these  papers  are  printed. 

The  Lewis  Publishing  Company  has  no  indebtedness  of  any  sort.  It 
has  one  hundred  and  seventy  thousand  dollars  due  it  from  subscriptions 
to  its  preferred  stock.  It  has  assets  of  about  two  hundred  thousand 
dollars  in  machinery,  paper  stock  and  fixtures.  Its  present  earnings  are 
at  the  rate  of  a  quarter  of  a  million  dollars  per  year,  net.  We  are  building 
the  finest  publishing  plant  in  the  world,  here  in  St.  Louis,  at  a  cost  of 
about  two  lumdred  thousand  dollars.  We  are  paying  cash  each  week  for 
the  work  as  done  and  for  all  material  delivered.  We  ha\'e  ordered  and 
building  for  us  fifty  thousand  dollars'  worth  of  additional  machinery,  to 
be  delivered  between  now  and  the  last  of  September. 

Beginning  with  the  October  number,  the  advertising  rate  of  tlie  Woman's 
Magazine  and  of  tlie  Woman's  Farm  Journal  is  increased  by  fifty  per  cent. 
The  rate  for  the  Woman's  Magazine  will  then  be  four  thousand,  two  hundred 
dollars  per  page;  each  issue.  We  now  have  in  hand  valid  contracts  for 
advertising  sufficient  to  fill  from  tliirty-two  to  forty  pages  per  issue  at  that 
rate.     The  cover  pages  arc  sold  in  advance  for  nine  months.     One  adver- 


THE  DREYFUS  CASE  OF  AMERICA  235 

tiser  has  just  closed  a  contract  with  us  for  half  a  page  per  issue  for  twelve 
issues  at  a  cost  of  thirty  thousand  dollars.  The  growth  of  the  circulation 
of  this  magazine,  extending  all  over  Noi-th  America  and  to  foreign  countries, 
is  almost  inconceivaijle.  An  advertisement  in  it  is  immediately  placed  in 
a  million  and  a  half  homes  and  presumably  before  seven  or  eight  millions 
cf  readers.  A  publication  is  enabled  to  advance  its  rate  as  it  grows  in 
reputation  and  standing,  whereas  a  merchant  must  double  his  stock  to 
double  his  business. 

We  have  coming  here  as  guests  during  the  World's  Fair  the  foremost 
publisliers  of  Europe  and  the  largest  advertisers  in  the  world.  The  build- 
ing and  equipment  of  our  new  plant  means,  therefore,  more  to  us  five 
times  over  than  its  cost.  To  have  all  in  readiness,  we  are  now  working 
a  double  shift  of  men  and  have  applied  to  the  labor  unions  for  permission 
to  operate  a  sixtcen-hour  day.  All  the  facilities  of  St.  Louis  could  not 
add  an  additional  eight  pages  to  an  issue  of  our  paper,  requiring  as  it  does 
about  ten  carloads  of  paper  to  produce  an  issue.  '  If  we  are  able  to  get 
into  our  plant  in  time  to  print  the  October  number,  it  will  make  a  differ- 
ence in  our  net  income  of  nearly  twenty  thousand  dollars  on  that  single 
issue.  Our  new  plant  will  have  a  capacity  of  two  million  forty-page 
magazines,  completely  printed,  stitched  and  folded,  in  eight  days.  We 
believe  that  we  will  come  out  of  the  World's  Fair  year  as  the  foremost 
publication  in  tlie  v/orld.  This  ineans  enormous  earnings.  There  is  no 
reason  in  the  world  why  the  Lewis  Publishing  Company  should  not  in  time 
earn  from  six  hundred  to  eight  hundred  thousand  dollars  a  year,  net. 

With  proper  publicity  and  the  standing  which  our  great  building  will 
give  us,  and  the  effect  of  the  AVorld's  Fair  in  bringing  us  in  contact  with 
hundreds  of  thousands  of  people  all  over  the  country,  and  particularly 
the  foremost  advertisers  in  the  world,  we  should  be  able  to  command 
nearly  double  our  present  advertising  rate.  As  an  illustration,  we  hand 
you  a  letter  herewith,  from  one  of  our  largest  advertisers,  stating  that  he 
hopes  to  see  us  charge  ten  dollars  a  line.  This  is  in  the  face  of  the  fact 
that  we  have  just  raised  his  advertising  rate  from  four  to  six  dollars  a 
line.  We  believe  that  the  day  has  come  for  a  great  national  publication 
with  enormous  power  and  influence,  and  with  corresponding  earning  power. 
We  are,  therefore,  building  and  equipjiing  a  plant,  the  like  of  which  does 
not  exist,  to  realize  this  idea. 

Lewis  then  called  attention  to  the  fact  that  the  Delineator  of 
New  York  with  less  than  one-third  the  circulation  of  the  Woman's 
Magazine  was  capitalized  at  twelve  millions  of  dollars  and  paid 
seven  per  cent.  He  further  asserted  that  the  Ladies'  Home  Journal 
had  earned  a  "cold  million  a  year"  for  the  past  tAvo  years.  He  said 
that  the  results  secured  by  advertisers  was  the  key  to  these  enormous 
earnings  and  that  the  past  year  had  demonstrated  that  in  value  of 
advertising  the  Woman's  Magazine  was  equal  to  the  leading  maga- 
zines in  America.  After  summarizing  the  lines  of  discount  of  the 
old  corporations,  he  stated  that  their  indebtedness  having  been 
cleared  up,  he  desired  to  form  a  connection  with  a  first-class  bank, 
with  a  view  to  carrjang  out  certain  plans  which  had  been  carefully 
studied  and  tested  during  the  preceeding  four  years.  He  based 
his  request  for  a  line  of  discount  for  the  Lewis  Publishing  Com- 
pany up  to  one  hundred  thousand  dollars  on  these  facts  and  con- 
cluded with  the  following  assertion: 

Since  we  have  been  in  business  here  the  banks  have  held  a  total  of  a 
million  and  a  quarter  dollars  of  our  paper.  We  have  never  renewed  or 
extended  a  note  in  the  entire  four  years  of  our  business.     We  refer  you 


236  THE  SIEGE  OF  UNIVERSITY  CITY 

to  the  National  Bank  of  Commerce,  the  American  Exchange  Banli  and  the 
St.  Louis  Union  Trust  Comjiany  as  to  the  truth  of  this  assertion. 

Such  was  the  status  of  the  afi'airs  of  the  Le^ds  Publishing  Com- 
pany when  the  time  arrived  for  the  laying  of  the  cornerstone  of  its 
new  building  in  August,  1903, 

LAYING   THE    CORNERSTONE. 

Seven  years  later,  on  the  occasion  of  a  convention  representing 
over  one  hundred  publishers  of  popular  periodicals  known  as  the 
Class  "A"  publications  associated  with  the  American  Woman's 
League,  Ex-Governor  David  R.  Francis  of  Missouri,  recalled  his 
connection  with  Lewis  of  the  early  days  in  the  following  language: 

I\Ir.  I^wis  says  that  I  am  the  dcdicator-in-chief  of  his  buildings.  I  want 
to  tell  you  in  a  few  words  the  beginning  of  our  acquaintance.  My  office  as 
President  of  the  Louisiana  Purchase  Exposition  Company  was  within  sight 
of  this  spot.  One  day,  the  year  before  the  World's  Fair,  he  sent  in  his 
card  to  me.  I  was  very  busy.  I  had  been  so  closely  engaged  that  I  really 
did  not  know  of  his  enterprise.  He  told  me  that  he  was  going  to  erect  a 
live-story  building  and  wanted  me  to  lay  the  cornerstone.  I  said,  "What 
is  it  for?"  He  replied,  "The  publishing  plant  of  the  Woman's  Magazine." 
I  said,  "Have  you  got  your  money?"  He  answered,  "Yes."  "Where  are 
you  going  to  erect  it?"  He  said,  "Come  to  the  window  and  I'll  show  you." 
He  pointed  out  this  spot  from  my  office  window.  "But,"  said  I,  "there  is 
no  building  there."  Pie  replied,  "I  am  going  to  lay  the  cornerstone  within 
three  weeks.  I  will  have  the  building  up  before  the  World's  Fair."  He 
then  showed  me  a  circular  containing  the  names  of  his  directors,  among 
them  a  number  of  men  whom  I  knew.  To  make  a  long  story  short,  I  said, 
"Mr.  I>e\vis,  whatever  I  do  in  my  official  capacity  as  President  of  the 
Worlds'  Fair,  I  must  account  for  to  the  directors,  to  the  stockholders  and 
to  the  conmiunity.  I  do  not  even  know  that  you  are  going  to  put  up  your 
building."  "Well,"  he  replied,  "how  can  I  convince  you?"  "I  don't  know," 
said  I,  "except  by  putting-up  one  stoiy  and  leaving  the  place  for  the  corner- 
stone vacant.  When  you  have  done  that,  I  will  lay  the  cornerstone."  I 
thought  he  might  take  offense  at  that.     But  he  only  said,  "I'll  do  it." 

About  two  or  three  months  later  Mr.  Lewis  paid  me  another  visit  and 
said,  "Well,  I've  got  that  first  story  up.  Everything  is  in  shape,  and  I  want 
you  to  come  over  and  lay  the  cornerstone  tomorrow."  I  came  and  laid  the 
cornerstone.  He  had  complied  with  the  conditions  as  I  never  knew  another 
man  to  do  before  under  the  circumstances,  and  he  has  done  the  same  with 
every  one  of  his  buildings. 

The  following  account  of  this  occasion  was  published  by  Lewis 
in  the  annual  statement  of  the  Development  and  Investment  Com- 
pany for  the  year  1903.  "On  August  28,  1903,  the  cornerstone  of 
the  new  publishing  plant  of  the  new  Lewis  Publishing  Company 
was  laid  by  Governor  D.  R.  Francis,  President  of  the  Louisiana 
Purchase  Exposition  Company,  in  the  presence  of  a  large  gathering 
of  spectators.  The  day  was  beautiful  and  about  the  building  were 
gathered  hundreds  of  the  prominent  men  and  women  of  St.  Louis. 
As  the  great  stone  fell  into  place  the  sun  burst  out  in  a  flood  of  sun- 
shine, which  seemed  to  augur  the  success  of  the  undertaking.  Special 
cars  were  run  for  the  accommodation  of  visitors  and  full  accounts 
were  given  in  the  St.  Louis  press."  Among  the  guests  at  the  cere- 
mony were  Sir  Alexandrovsky,  Chamberlain  to  His  Majesty  the 
Czar  of   Russia;   Baron   Korff;  W.   B.   Stevens,   Secretary  of  the 


^Patents  of  the  Controller  Company  of  America 

^Certificate  of  bronze  medal  on  telephone  pay  stations  of  the  Controller  Company  of 
America,  presented  by  the  Louisiana  Purchase  Exposition  Company 


<5  b<l 


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THE  DREYFUS  CASE  OF  AMERICA  239 

World's  Fair;  Major  H.  L.  Kramer,  proprietor  of  "Cascarets"; 
Mr.  L.  E.  Asher  of  Sears,  Roebuck  &  Co.  of  Chicago,  and  many 
of  the  most  prominent  men  of  St.  Louis.  The  speech  of  Governor 
Francis  was  as  follows: 

Mr.  President,  Ladies  and  Gentlemen:  The  interesting  and  significant 
character  of  the  ceremony  of  laying  the  cornerstone  of  this  building  can 
be  imderstood  when  you  are  told  that  upon  this  spot  is  being  erected  what 
will  be  the  largest  publishing  house  in  the  world.  I  am  not  only  glad^ 
therefore,  but  I  feel  honored  to  be  permitted  to  participate  in  the  auspicious 
beginning  of  so  worthy  an  enterprise.  All  credit  to  the  man  who  has  con- 
cei\  ed  this  great  undertaking !  Credit  to  his  colleagues  and  to  all  asso- 
ciated with  him ! 

St.  Louis  is  attracting  the  attention  of  the  world.  From  now  on  we 
shall  take  pleasure  in  pointing  to  this  enterprise  as  one  of  the  indications 
of  the  energy  and  public  spirit  of  a  St.  Louisan,  assisted  and  encouraged 
not  only  by  his  co-workers,  but  by  the  patronage  of  a  million  and  a  half 
of  subscril)ers  throughout  the  United  States  and  Canada,  who  read  one  of 
his  publications.  This  is  another  evidence  of  the  progressive  spirit  that 
has  taken  hold  of  the  people  of  St.  Louis.  We  hardly  realize  how  promi- 
nent we  are  at  this  time  in  the  eyes  of  every  country  on  the  globe.  The 
question  with  us  is:  Shall  we  prove  equal  to  our  responsibilities?  St.  Louis 
is  on  trial  and  if  the  people  of  this  city  are  inspired  by  the  same  spirit  that 
moves  Mr.  Lewis  and  his  colleagues,  St.  Louis  will  continue  to  be  prominent 
in  the  eyes  of  the  world  during  at  least  the  life  of  the  present  generation. 

This  auspicious  beginning  will  soon  reach  a  successful  consummation, 
and  before  the  beginning  of  another  calendar  year  there  will  have  been 
erected  upon  this  eligible  site  a  publishing  house  that  will  yield  the  palm 
to  none  in  its  equipment  or  in  its  external  appearance.  Near  here,  I  am 
told,  also  assured,  will  be  erected  a  commodious  hotel  for  the  accommo- 
dation of  the  hundreds  of  thousands  of  visitors  who  will  come  to  St.  Louis 
in  ISOl.  Speaking  for  myself,  indi^  idually,  and  spealiing  to  the  extent  that 
I  am  authorized  to  represent  the  Exposition,  I  desire  to  say  that  we  wish 
this  enterprise  all  success,  and  I  am  sure  that  sentiment  will  be  applauded 
by  the  people  of  St.  Louis,  by  the  people  of  the  Louisiana  Purchase,  and 
not  only  by  those,  but  by  the  millions  of  readers  of  the  Woman's  Magazine 
that  will  be  issued  from  this  great  publishing  house. 

Let  us  all  wish  it  unbounded  success,  and  let  us  hope  that  with  the  co- 
operation and  encouragement  of  the  people  of  this  country,  and  with  the 
favor  of  Divine  Providence,  all  of  the  fondest  hopes  of  its  originators  may 
be  realized. 

The  work  on  the  new  buildino;  progressed  rapidlj'^  and  by  January 
L,  1904,  the  pressrooms  were  in  full  operation,  rattling  off  their 
millions.  The  central  office  building  was  also  practically  completed. 
The  business  of  the  Lewis  Publishing  Company,  on  the  eve  of  the 
World's  Fair,  showed  gross  earnings  of  approximately  a  million 
dollars  per  annum,  and  a  net  profit  at  the  rate  of  a  quarter  of  a 
million  dollars  a  year.  The  publishing  plant  was  built  for  cash, 
in  Lewis'  phrase,  "without  mortgage  or  lien,"  although  the  cash 
paid  to  the  builders  during  the  progress  of  the  work  was  not  wholly 
that  of  the  Lewis  Publishing  Company  itself,  but  was  (in  part) 
raised  by  Lewis  personally  with  the  assistance  of  Kramer,  and  had 
of  course  eventually  to  be  repaid  out  of  the  earnings  of  the  concern. 
Lewis'  dream  of  erecting  a  model  publishing  plant  amidst  ideal 
s^irroundings  outside  St.  Louis  thus  became  a  reality. 


240  THE  SIEGE  OF  UNIVERSITY  CITY 

Camp  Lewis  was  an  advertising  promotion  scheme  of  the  Woman's 
Magazine.  It  was  not  a  business  venture  for  profit.  It  does  not 
properly  belong  among  the  enterprises  promoted  by  the  Develop- 
ment and  Investment  Company.  It  has,  however,  been  frequently 
mentioned  as  such,  and  may  be  referred  to  in  this  place  as  a  pendant 
to  the  story  of  the  origin  of  the  Lewis  Publishing  Company,  and 
as  one  of  its  first  and  most  spectacular  achievements.  Lewis'  own 
story  of  this  tent  episode  was  thus  picturesquely  described  to  the 
Ashbrook  Committee: 

CAMP    LEWIS. 

At  the  time  of  the  St.  Louis  World's  Fair,  I  think,  possibly,  our  insti- 
tution was  the  best  known  in  America,  because  of  the  enormous  circula- 
tion of  our  publications.  As  soon  as  it  was  decided  to  hold  the  Fair  along- 
side our  buildings  I  became  aware  that  we  should  have  to  take  care  in 
some  way  of  the  tens  of  thousands  of  our  subscribers  who  were  coming  to 
the  World's  Fair.  I,  therefore,  arranged  with  an  ex-army  officer,  Colonel 
Buzzacott,  to  ei-ect  a  great  tent  city  to  be  called  Camp  Lewis,  to  accom- 
modate three  or  four  thousand  people  at  a  time.  The  plan  was  to  have 
little  tents  with  board  floors,  electric  lights,  hot  and  cold  water;  also  a 
commissary  tent  and  hospital  tents.  During  the  World's  Fair  we  took 
care  of  about  eighty  thousand  of  our  readers  in  that  tent  city,  charging 
them  the  cost.  In  fact,  we  did  not  quite  charge  them  the  cost,  because  I 
paid  a  Iionus  of  five  cents  a  meal  to  the  caterer  to  give  them  a  little  extra 
and  better  service.  I  knew  that  a  subscriber  who  came  there  to  the  tent 
city  and  got  a  bad  cup  of  coffee  might  discontinue  his  subscription. 

Camp  Lewis  was  not  a  stock  company  for  profit.  It  was  an  expense, 
and  cost  us  sixty  or  seventy  thoxisand  dollars.  No  one  was  wronged  or 
defrauded.  In  fact,  those  who  v/ere  our  guests  there  have  been  our  best 
friends  since.  People  could  obtain  accommodation  in  Camp  Lewis  during 
the  Fair  for  much  less  cost  than  equally  good  accommodation  elsewhere  in 
the  city  or  environs.  The  camp  was  beautifully  kept,  under  military  order. 
In  passing  through  one  day  I  noticed  a  very  portly  gentleman  sitting  in 
front  of  one  of  the  tents  reading  the  paper,  and  recognize'd  him  as  Mr. 
August  Frank  of  St.  Louis,  a  very  wealthy  citizen  and  a  personal  friend. 
I  asked  him  what  he  was  doing  in  our  camp,  at  my  expense.  He  said  St 
was  so  much  nicer  than  his  apartment  at  the  Southern  Hotel  that  he  had 
moved  out.  I  had  him  run  out  of  camp  that  evening.  The  whole  affair  was 
to  take  care  of  our  readers. 

Colonel  Buzzacott,  who  had  charge  of  Camp  Lewis,  was  an  army  officer 
of  twenty'  years'  experience  in  camp  life  and  head  of  one  of  the  largest 
army  contracting  firms  in  the  world.  In  every  array  of  this  Nation  and  of 
Europe  the  name  Buzzacott  on  camp  equipment  is  a  guarantee  of  comfort 
and  convenience.  The  colonel  had  a  reputation  of  his  own,  and  refused  to 
undertake  the  outfittings  and  management  of  the  camp  unless  given  a 
free  hand.  Flis  estimate  of  tiie  cost,  with  cozy  tents,  iron  beds  with  springs 
and  mattresses,  electric  lights,  comfortable  chairs,  baths,  nursery  tent, 
recreation  tent,  hospital  tent,  great  dining  tent,  barber  shops,  reading 
rooms,  allowing  for  two  hundred  residence  tents,  was  ten  thousand  dollars. 
To  this  was  added  board  walks,  plumbing  and  other  conveniences,  and 
before  it  was  finished  it  cost  over  twenty-five  thousand  dollars  for  outfit 
alone. 

The  camp  was  under  military  management.  Colonel  Buzzacott  was  in 
personal  charge.  John  Thompson,  the  famous  caterer  of  Chicago,  provided 
the  best  of  meals.  A  physician  was  in  attendance  with  the  hospital  tent, 
and  trained  nurses  at  his  disposal.  Nurses  were  provided  for  the  baby 
tent,  where  small  ciiildren  could   be  left  in  their  charge,     A  smoking  tent 


THE  DREYFUS  CASE  OF  AMERICA  241 

and  shower  baths  were  free  to  guests.  Every  tent  had  raised  floor  and 
electric  lights.  Broad  board  walks  were  laid.  About  each  tent  was  a  lawn 
of  well-kept  grass  and  flower  beds.  In  the  centre  was  a  campfire,  lighting 
up  the  camp  at  night  with  cheerful  glow,  for  no  camp  is  complete  without 
a  campfire.  About  this  fire  frolicking  parties  were  held  to  the  strains  of 
music.  No  intoxicants  were  permitted.  Meals  were  given  at  twenty-five 
cents,  and  fifty  cents  for  full  dinner. 

The  original  negotiations  and  agreements  between  the  Lewis 
Publishing  Company  and  F.  H.  Buzzacott^  contractor  to  the  United 
States  Government,  bearing  date  of  March  12,  1912,  are  still  pre- 
served. Every  detail  of  the  proposed  encampment  is  set  forth  v?ith 
the  careful  forethought  and  particularity  of  the  experienced  army 
contractor.  Even  the  proposed  bills  of  fare  vrere  detailed  in  ad- 
vance. One  would  judge  from  these  that  the  meals  furnished  must 
have  been  good  arguments  for  the  renewal  of  Woman's  Magazine 
subscriptions. 

The  correspondence  of  Colonel  Buzzacott  during  this  period  with 
his  army  associates  shows  he  took  great  pride  in  Camp  Lewis.  His 
judgment  is  confirmed  by  the  following  letter  from  Lieutenant- 
General  Nelson  A.  Miles,  Commander  of  the  United  States  Army. 
This  was  written  to  Colonel  Buzzacott  under  date  of  July  19,  1904-, 
following  General  Miles'  review  of  the  encampment: 

I  desire  to  express  the  pleasure  I  experienced  yesterday  in  visiting  the 
Lewis  (3amp  imder  your  conti-ol.  You  have  exercised  your  usixal  energy 
and  skill  in  the  establishment  of  this  large,  commodious  and  beautiful 
encampment.  It  is  not  only  most  comfortable,  but  picturesque,  and  from 
my  personal  inspection  appears  healthful.  Every  department  seems  per- 
fect in  design  and  management. 

I  congratulate  you  on  your  success. 

POPULARITY   OF   THE    ENCAMPMENT. 

Camp  Lewis  was  generously  advertised  in  both  of  the  Lewis  pub- 
lications and  by  means  of  an  attractive  booklet  designed  to  answer 
inquiries  received  by  mail.  The  obvious  advantages  of  its  imme- 
diate proximity  to  the  World's  Fair  grounds,  the  picturesque  beauty 
and  healthfulness  of  the  site  and  the  outdoor  life  under  military 
regulations  nearly  akin  to  those  of  soldiers  in  the  field,  appealed 
to  Lewis'  readers  and  the  public.  Rooms  and  meals  were  furnished 
at  a  much  lower  cost  than  the  prevailing  high  prices.  This  policy 
coupled  with  frequent  impossibility  of  securing  quarters  in  St.  Louis 
hotels  and  houses  during  the  height  of  the  World's  Fair  season, 
contributed  to   the   popularity  of   Camp   Lewis. 

Preference  was  given  to  inquirers  who  answered  advertisements 
In  the  Woman's  Magazine  and  the  Woman's  Farm  Journal.  All 
this  helped  to  strengthen  the  bond  of  confidence  and  esteem  be- 
tween the  Woman's  Magazine  and  its  readers.  Many  intending 
visitors  to  the  World's  Fair  from  rural  neighborhoods  looked  for- 
ward with  dread  to  the  difficulties  of  finding  their  way  in  so  large 
a  city  as  St.  Louis.  All  sorts  of  questions  were  asked  and  all  were 
patiently  answered  by  personal  letter.  The  success  of  every  mail 
order  house  in  fact  depends  largely  on  this  personal  note.     Lewis 


242  THE  SIEGE  OF  UNIVERSITY  CITY 

has  always  struck  it  instinctively.  But  Camp  Lewis  gave  him  a 
unique  opportunity  to  act  as  host  to  his  patrons  and  he  was  quick 
to  seize  upon  and  take  full  advantage  of  it. 

As  the  needs  of  the  situation  developed,  Lewis  tooli  active  steps 
to  meet  them  and  smooth  away  every  obstacle.  Badges  were  pro- 
vided and  sent  by  mail  whereby  incoming  guests  could  be  recog- 
nized by  agents  stationed  for  that  purpose  on  the  arrival  platforms 
at  the  Union  Station,  St.  Louis.  Other  agents  were  placed  at  the 
end  of  the  street  car  lines  adjacent  to  the  tent  city.  Visitors  thus 
met  and  warmly  welcomed  by  representatives  of  the  Woman's  Maga- 
zine, were  made  to  feel  at  home  upon  the  very  threshold  of  their 
visit  to  a  crowded  city.  This  impression  of  friendliness  and  fore- 
thought was  strengthened  and  confirmed  by  each  succeeding  day 
of  comfort  and  entertainment,  passed  in  the  cozy  white  tents  jierched 
snugly  upon  the  hillside  in  view  of  the  World's  Fair  buildings  and 
under  the  sliadow  of  the  newly  erected  octagon  toAver. 

The  main  entrance  to  the  Fair  Grounds  was  but  a  short  walk  from 
Camp  I>cwis.  A  pathway  was  quickly  trodden  tliither  across  the 
open  field S;,  now  one  of  the  most  attractive  residence  sections  in 
St.  Louis.  Comfortable  omnibuses  plied  busily  to  and  fro.  The 
entire  spectacle  of  the  swarming  crowds  in  the  brilliant  sunlight 
amid  the  white  buildings  and  rows  of  tents,  with  Lewis'  tower,  as 
gay  with  bunting  as  one  of  the  main  sights  of  the  Fair  itself,  must 
have  been  one  of  absorbing  interest. 

Lewis  estimates  the  total  attendance  at  the  camp  during  the  sum- 
mer at  approximately  eighty  thousand  people.  The  majority  of 
these  responded  to  the  captivating  invitation  in  his  magazines.  The 
whole  affair  hod  the  effect  of  a  stupendous  advertisement  for  the 
Woman's  Magazine.  The  octagonal  tower  and  white  tented  "City 
on  the  Hill"  in  plain  view  of  the  Fair  Grounds,  attracted  the  eyes 
of  the  entire  concourse  of  sight-seers.  The  guests  at  Camp  Lewis 
not  only  brought  with  them  to  the  grounds  to  the  Woman's  Maga- 
zine building,  a  host  of  new  friends  and  acquaintances.  Their 
comings  and  goings  led  the  crowds  to  follow.  Especially  on  Sun- 
day, when  the  Fair  Grounds  were  closed  to  visitors,  the  premises 
of  the  Lewis  Publishing  Company  were  thronged  with  a  multitude 
of  curiosity  seekers.  The  entresol  of  the  Woman's  iSIagazine  build- 
ing, and  the  central  marble  stairway  surmounted  by  the  mezzanine 
floor  and  gallery,  were  literally  packed  tight  with  sight-seers  from 
mid-day  until  a  late  hour  every  Sunday. 

The  homeliness  and  kindliness  fostered  by  Camp  Lewis  between 
the  little  Woman's  ]\Iagazine  and  its  readers  unquestionably  ac- 
counted in  no  small  degree  for  the  pertinacity  with  which  Lewis' 
following  has  clung  to  him  throughout  the  long  years  of  trial.  What 
this  encampment  should  have  meant  to  the  Woman's  Magazine  by 
way  of  additional  subscription  and  advertising  revenue,  resulting 
from  good  will  and  recommendation  by  word  of  mouth,  can  only  be 
guessed.     But  that  it  was  much  can  be  told  from  the  sequel.     The 


THE  DREYFUS  CASE  OF  AMERICA  243 

whole  atmosphere  of  this  city  of  tents  may  be  taken  as  represent- 
ing the  finest  expression  of  that  mutual  confidence  and  esteem  which 
existed  between  him  and  his  followers  before  the  taint  of  suspicion 
fell  upon  his  enterprises,  like  a  devastating  blight,  or  the  scorching 
breath  from  the  jaws  of  some  monstrous  Chimera.  The  memory 
of  Camp  Lewis  still  lingers  in  the  minds  of  many  thousands  of  visi- 
tors to  the  World's  Fair  as  among  their  most  pleasant  recollections. 
But  to  no  one  does  the  thought  of  that  tent  city  bring  such  mingled 
emotions  of  joy  and  sorrow  as  it  does  to  Lewis  himself. 

THE    WORLD^S   FAIR    CONTEST    COMPANY. 

One  additional  promotion  of  the  Development  and  Investment 
Company  remains  to  be  described.  This  is  the  really  famous 
World's  Fair  Contest  Corapanj^,  the  only  instance  among  Lewis' 
many  ventures  that  is  known  to  have  occasioned  him  regret.  Yet 
this  concern  was  probably  the  most  profitable  single  financial  ven- 
ture which  Lewis  or  the  Development  and  Investment  Company  ever 
engaged  in.     This  is  how  Lewis  tells  the  i?tory: 

If  there  is  any  of  these  enterprises  of  whicK  I  have  a  sense  of  regret,  it 
is  the  World's  Fair  Contest  Company.  Not  that  this  was  not  legitimate  in 
every  way,  but  it  went  against  the  grain  with  me.  This  is  the  way  it 
happened: 

About  the  time  they  were  constructing  the  buildings  and  getting  things 
in  readiness  to  hold  the  World's  Fair  at  St.  Louis,  some  of  the  directors 
of  the  Louisiana  Purchase  Exposition  Company  came  to  me  and  asked  if 
I  couldn't  work  out  some  plan  for  widely  advertising  the  Fair.  I  said  I 
would  see  if  I  couldn't  think  up  something.  At  that  time  different  guessing 
contests  were  being  run  all  over  the  United  States.  The  Postoffice  De- 
partment had  made  certain  rulings  as  to  which  were  lotteries  and  which 
were  not.  The  differentiation  was  so  finely  drawn  that  I  have  never  been 
quite  able  to  figure  it  out  yet.  But,  anyhow,  they  had  held  that  these 
guessing  contests  were  not  lotteries.  After  looking  into  the  proposition, 
I  said  to  the  directors,  "I  will  tell  you  how  you  can  arouse  interest  in  the 
World's  Fair  that  will  be  of  national  extent.  The  human  animal  is  so 
constituted  that  he  likes  to  bet  a  little.  If  you  can  get  up  a  contest  on 
what  will  be  the  attendance  of  the  World's  Fair  and  carry  it  to  within  a 
week  or  two  of  the  close,  you  will  have  a  continuity  of  interest.  Every 
day  the  attendance  will  be  closely  watched  to  enable  the  contestants  to 
make  a  better  judgment  as  to  what  the  total  will  be.  You  can  then  publish 
statistics  and  other  information,  and  the  newspapers  throughout  the  M'hole 
country  will  be  compelled  every  day  to  publish  them."  I  said,  "This  will 
be  of  great  value  to  you  as  an  advertisement,  provided  you  make  the  purse 
big  enough.  If  you  offer  only  ten  thousand  or  even  fifteen  thousand  dollars 
the  public  will  not  pay  much  attention.  You  must  make  it  something  that 
will  compel  the  whole  United  States  to  sit  up  and  look  at  it."  They  were 
taken  with  the  idea,  but  didn't  just  like  to  put  up  the  money. 

PaiZES    A^D   PROFITS. 

I  said,  "Well,  as  my  contribution,  J.  will  take  the  chance  myself."  I  then 
went  over  to  one  of  the  banks  and  borrowed  seventy-five  thousand  dollars 
on  my  note.  I  took  the  cash  and  deposited  it  in  one  of  the  trust  com- 
panies. Then  I  offered  a  first  prize  of  twenty-five  thousand  dollars.  The 
other  prizes  were  graded  down  for  those  who  estimated  nearest  to  the 
total  attendance.  1  will  state  in  this  connection  a  remarkable  incident. 
One  man  estimated  the  attendance  exactly.  He  got  the  twenty-five  thousand 
dollars. 


244  THE  SIEGE  OF  UNIVERSITY  CITY 

To  make  it  a  little  more  interesting,  I  added  another  ten  thousand, 
making  eighty-tive  thousand  dollars,  all  told.  This  extra  ])urse  was  for  the 
one  who  came  nearest  to  estimating  the  attendance  during  the  early  part 
of  the  Fair.  The  contest  excited  a  great  deal  of  interest,  but,  of  course,  I 
took  a  chance  on  whether  I  would  get  back  that  eighty-five  thousand  dollars 
or  not. 

There  were  no  stockholders  in  that,  I  believe,  besides  myself,  except 
nominal  ones  as  required  by  law  to  form  a  corporation.  There  was  no  loss 
to  anyone  except,  of  course,  that  those  who  sent  in  their  estimates  put  up 
their  money.  The  estimate  coupons  were  usually  sold  in  connection  with 
newspaper  subscriptions,  so  they  had  the  papers  for  their  money.  We 
sold  them  to  newspapers  and  magazines,  and  they  used  them  in  connection 
with  subscription  schemes  of  their  own.  In  addition  we  sold  some  coupons 
direct.     But  the  great  bulk  was   sold  through  periodicals. 

I  do  not  remember  what  the  profit  was.  There  were  eighty-five  thousand 
dollars  in  prizes,  and  the  expense  of  handling  it  was  very  heavy.  It  is 
hard  to  estimate  the  profit.  I  should  say,  perhaps,  eighty-five  thousand 
dollars  profit,  all  told.  The  coupons  cost  twenty-five  cents  each.  What  was 
put  up  by  those  who  did  not  win  the  prizes  was  lost.  Any  such  loss  refers, 
of  course,  solely  to  the  person  making  the  estimate.  The  total  cost,  includ- 
ing all  the  expense  of  advertising  and  handling,  was  considerable.  The 
consideration  given  was  the  opportunity  to  win  the  purse.  There  was  no 
actual  loss  in  a  business  sense.  In  my  judgment,  those  things  are  purely 
and  simply  lotteries,  like  church  fairs  and  things  of  that  kind.  The  whole 
thing  was  objectionable  as  an  appeal  to  the  gambling  spirit  of  the  Nation. 
Each  contestant  in  return  for  his  money  got  the  excitement  and,  in  most 
cases,  a  subscription  to  a  periodical  also.  Where  there  was  no  subscription 
given  he  got  just  the  same  as  if  he  had  paid  to  go  to  a  show.  He  got  a 
run  for  his  money. 

LEWIS  REGRETS  THE  CONTEST. 

ITiis  enterprise  did  not  match  up  with  the  other  things  which  I  was 
doing.  Something  came  to  my  attention  the  first  week,  which  soured  me 
on  the  whole  affair.  I  would  have  stopped  it  then  if  1  could.  I  saw  a 
letter  in  the  mail  from  some  woman  enclosing  an  amount  of  three,  four  or 
five  dollars  for  a  number  of  estimates  in  the  contest.  She  expressed  the 
hope  that  she  would  win  a  purse  and  stated  what  it  would  mean  to  her  if 
she  did.  In  a  flash  I  had  a  mental  picture  of  the  chance  she  had  of 
winning  that  purse — one  in  a  million.  It  was  not  a  fair  proposition.  I 
have  no  hesitation  in  proposing  a  business  venture,  I  don't  care  how  much 
risk  there  is  in  it.  to  men  of  intelligence,  of  means  and  of  sound  mind,  and 
of  saying:  "Here  is  the  proposition.  If  we  succeed,  we  may  make  a  thou- 
sand per  cent;  if  not,  we  shall  lose  what  we  put  into  it.  If  you  fellows 
want  to  go  in,  all  right."  Then,  whether  they  go  in  for  one  or  one  hundred 
thousand  dollars,  is  their  business.  But  this  contest  was  totally  different. 
At  the  same  time,  it  probably  did  more  for  the  attendance  of  the  World's 
Fair  than  any  other  advertisement. 

I  would  have  stopped  the  World's  Fair  Contest  Company  within  two 
weeks  after  it  had  started  if  I  could  have  done  so.  But  I  had  the  money 
up,  had  issued  the  coupons  and  couldn't  stop  it.  The  scheme  was  submitted 
to  the  postoftice  and  was  approved  by  them.  The  postoffice  then  permitted 
these  contests.  The  Buffalo  Fair  did  the  same  thing.  Similar  contests  were 
going  on  continuously  in  the  newspapers.  A  large  number  of  the  besfl 
newspapers  in  the  United  States  participated  in  this  contest.  In  fact,  my 
plan  was  to  have  the  newspapers  all  over  the  United  States  go  in  on  it, 
and  thus  give  the  Fair  unlimited  publicity  every  day.  The  directors  of 
the  World's  Fair  not  only  considered  the  scheme  good,  but  looked  on  it  as 
the  most  favorable  advertising  plan  in  connection  with  the  entire  exposi- 
tion.    They  were  very  much  interested  in  it.     There  was  no  general  con- 


THE  DREYFUS  CASE  OF  AMERICA  245 

demnation  of  the  plan  in  the  newspapers.    On  the  contrary,  most  of  them 
were  using  it. 

The  scheme  was  not  advertised  in  mj  own  magazine  more  than  in  others. 
We  aJready  had  our  coupons  and  that  made  our  profit.  Of  course,  we  had 
first  to  recover  the  amount  of  the  prizes  and  expenses.  The  attorney- 
general  held  that  the  contest  was  not  a  lottery.  It  lacked  the  element  of 
chance;  because  the  problem  could  be  worked  out  fairly  closely  by  general 
averages  and  by  consideration  of  the  extent  of  the  advertising,  and  so  on. 
As  upholding  that  contention  it  was  remarkable  how  close  a  great  number 
of  estimates  came  to  the  actual  total  attendance.  The  courts  passed  upon 
the  matter  and  held  that  the  estimates  were  so  close  as  to  prove  it  was  not 
a  gambling  scheme.  The  contestants  were  allowed  to  withhold  their  esti- 
mates until  within  two  weeks  of  the  close  of  the  Fair.  There  was  litigation 
afterwards  between  contestants.  The  capital  prize  was  claimed  by  two 
different  persons.  We  decided,  therefore,  to  have  the  purse  awarded  by 
a  committee.  The  judges  had  been  named  in  the  literature.  They  were 
representative  business  men  of  St.  Louis.  But  when  the  litigation  arose 
we  paid  the  money  into  court  and  let  the  court  decide. 

WILLIAM   JENNINGS   BRYAN   OBJECTS. 

The  World's  Fair  Contest  Company  immediately  provoked  serious 
criticism,  of  which  the  following  open  letter  by  William  Jennings 
Bryan  to  Postmaster-General  Payne,  Washington,  D.  C,  reprinted 
from  The  Commoner  of  July  17,  1903,  may  be  taken  as  an  illus- 
tration : 

Dear  Sir:  I  enclose  a  circular  sent  out  by  a  St.  Louis  company  which 
is  conducting  a  guessing  contest  based  upon  the  number  of  admittances  to 
the  Louisiana  Purchase  Exposition.  You  will  see  that  the  sum  of  seventy- 
five  thousand  dollars  is  offered  in  prizes,  the  estimates  being  sold  for 
twenty-five  cents  each,  or  five  for  a  dollar.  The  company  is  soliciting  the 
aid  of  newspapers  throughout  the  country  to  advertise  the  contest.  It  is 
apparent  from  the  advertisement  that  this  is  even  more  demoralizing  than 
the  ordinary  lottery,  because  the  low  price  of  the  ticket  and  the  large 
capital  prizes  promised  are  more  alluring  to  those  who  are  susceptible  to 
the  temptations  offered  by  a  lottery.  It  is  also  less  fair  than  the  ordinary 
lottery,  because  the  contestant  has  no  way  of  knowing  how  many  com- 
petitors he  has.  In  the  public  lottery  the  prizes  usually  bear  a  fixed  and 
known  proportion  to  the  amount  received  for  tickets,  but  in  this  case  the 
company  may  take  in  ten  or  a  hundred  times  the  amount  paid  out  in  prizes. 
The  concluding  paragraph  of  the  advertisement  discloses  the  gambling 
character  of  the  institution.     It  reads  as  follows: 

"A  good  investment.  Better  than  stocks  and  bonds.  We  are  receiving 
from  shrewd  business  men  from  the  large  trading  centres,  monthly  orders 
for  certificates,  they  claiming  that  the  investment  is  safer  and  the  possi- 
bility of  large  gain  greater  than  investment  in  bonds,  life  insurance  or  any 
of  the  speculative  stocks  offered  on  the  boards  of  trade  in  the  various  com- 
mercial centres.  Most  of  them  purchase  certificates  systematically — that  is, 
send  in  every  month  for  from  one  to  five  dollars'  worth.  Almost  everyone 
can  economize  a  few  cents  a  day,  and  the  funds  thus  saved  can  be  invested 
in  certificates  and,  with  a  hundred  or  more  certificates  in  your  possession, 
you  are  likely  to  wake  up  some  morning  and  find  yourself  the  luckj^  pos- 
sessor of  an  independent  fortune.  It  hardly  seems  reasonable  that  with  a 
hundred  certificates  one  could  miss  ALL  of  the  1,889  prizes." 

Please  let  me  know  whether  the  Department  has  issued  any  order  on 
tlie  subject,  and  whether  or  not  such  a  contest  is  regarded  as  a  violation 
of  the  anti-lottery  laws. 


246  THE  SIEGE  OF  UNIVERSITY  CITY 

The  reply  to  the  above  was  a  letter  over  the  signature  of  C.  H. 
Robb,  assistant  attorney-general  for  the  Postoffice  Department, 
dated  June  23,  1903,  which  is  in  substance  as  follows: 

It  is  unquestionable  tliat  iht  efltect  upon  the  public  of  these  so-called 
guessing  contests,  considering  the  elaborate  plan  upon  which  they  are 
oflercd,  the  very  large  prizes,  etc.,  is  almost  as  pernicious  as  that  of  ordinary 
lotteries,  and  it  is  the  disposition  of  the  Postoffice  Department  to  scrutinize 
very  carefully  all  such  schemes  and  to  deny  them  the  use  of  the  United 
States  mails  where  authority  of  law  can  be  found.  In  all  such  cases  the 
Department  must  be  governed  by  decisions  of  the  Federal  Courts  and 
opinions  of  law  officers  of  the  Government. 

From  sundry  legal  opinions  quoted,  the  conclusion  is  reached  that 
the  scheme  is  ''beyond  the  reach"  of  the  Postoffice  Department ;  that 
is,  in  other  words,  legal,  "unless  it  shall  develop  that  fraud  is  being 
practiced  in  its  operation." 

INDICTMENTS   FOUND    AND    QUASHED. 

Notwithstanding  that  one  of  the  opinions  affirming  the  legality 
of  such  contests  was  that  of  Attorney-General  Knox  in  connection 
with  the  Pan-American  Exposition  at  Buffalo,  Assistant  Circuit- 
Attorney  W.  S.  Hancock  of  St.  Louis  attempted  to  put  the  World's 
Fair  Contest  Company  out  of  business.  Lewis  thus  refers  to  this 
incident: 

Toward  the  close  of  the  contest  the  assistant  circuit  attorney  saw  fit 
to  secure  an  indictment  against  the  promoters,  as  well  as  against  the  pro- 
moters of  a  similar  contest  conducted  by  the  St.  I.ouis  Daily  Star.  This 
indictment  was  quashed.  A  new  information  was  filed  by  the  same  officer. 
That  was  quashed.  He  then  brought  still  another  indictment.  That  was 
also  quashed  by  the  courts.  All  were  dismissed  entirely  on  the  merits  of 
the  case.  This  persecution  on  the  part  of  a  local  officer  brought  the  contest 
into  disorder  and  resulted  in  great  damage  and  loss  to  those  associated 
with  it. 

SETTLEMENT    OF   THE    CONTEST. 

Lewis  requested  permission  of  the  grand  jury  to  appear  before 
that  body  and  submit  to  it  the  above  facts  and  legal  opinions,  but 
was  refused.  The  officers  and  directors  of  the  World's  Fair  Contest 
Company  were  indicted.  A  very  careful  review  of  the  law  and 
judicial  precedents  on  the  subject  was  then  made  by  counsel  for 
the   company  who   expressed   the    following   conclusion: 

The  substance  of  the  leading  decisions  in  England  and  America  is  tliat 
where  a  contest  of  estimates  contemplates  the  exercise  of  the  intellectual 
factors,  or  calculation,  judgment,  skill  or  experience  of  the  competitors, 
and  not  mere  chance  alone,  tiie  project  is  not  a  lottery.  Your  project 
obviously  involved  such  a  problem.  It  can  not  be  regarded  as  a  lottery  in 
any  aspect,  according  to  the  decisions  above  cited.  The  estimates  which 
your  patrons  will  furnish  involve  not  merely  careful  calculation  of  proba- 
bilities, but  they  conduce  to  a  widespread  study  of  such  subjects  and  of 
the  history  of  all  of  the  great  World's  Fairs.  These  features  broadly 
difTerentiate  your  project  from  one  where  mere  chance  determines  the  issue. 

We  conclude  that  your  project  is  not  a  lottery.  We  coincide  with  the 
official  decision  of  the  learned  and  eminent  counsel  of  the  United  States 
Postoffice  Department  on  that  subject,  as  applied  to  this  very  company 
and  to  this  kind  of  contest. 


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THE  DREYFUS  CASE  OF  AMERICA  249 

The  efFect  of  this  brief  was  apparently  conclusive  that  a  con- 
viction could  not  be  sustained.  The  indictments  were  quashed  and 
the  contest  sufi'ered  to  go  on.  A  four-page  newspaper  supplement 
under  date  of  March  30,  1905,  still  preserved  by  Lewis,  contains 
a  list  of  the  names  and  addresses  of  the  winners.  It  bears  the  fol- 
lowing statement: 

Many  urgent  efforts  have  been  made  to  obtain  from  the  Louisiana 
Purchase  Exposition  Company  the  paid  attendance  at  the  World's  Fair  in 
a  form  that  was  not  subject  to  revision.  It  was  the  latter  part  of  February 
before  the  secretary  gave  us  a  final  statement  of  the  paid  attendance. 
Immediately,  the  Missouri-Lincoln  Trust  Company  was  authorized  to  turn 
over  to  the  judges  the  coupons  of  estimators  which  had  been  locked  up  in 
their  safety  deposit  vaults.  The  judges  at  once  undertook  the  enormous 
labor  of  making  the  awards,  and  on  March  30  gave  us  the  list  of  awards 
and  names  of  the  successful  contestants.  Winning  certificates  should  at 
once  be  forwarded  to  the  Missouri-Lincoln  Trust  Company  through  any 
bank  or  banker  or  express  company.  The  capital  prize  of  twenty-five  thou- 
sand dollars  and  the  special  prize  of  five  thousand,  five  hundred  dollars  for 
nearest  correct  estimate  made  between  January  1,  1904,  and  May  1,  1904, 
being  in  dispute  among  several  claimants,  will  be  paid  into  court  to  the 
account  of  the  rightful  claimant  or  claimants  as  soon  as  the  proper  court 
order  can  be  obtained. 

Following  is  a  reproduction  of  the  letter  of  the  judges  with  their 
signatures : 

St.  Louis,  Mo.,  March  30,  1905. 
World's  Fair  Contest  Company,  St.  Louis,  Mo. 

Gentlemen:  We,  the  undersigned  committee,  appointed  by  you  to  ascer- 
tain the  successful  contestants  in  the  World's  Fair  contest,  beg  to  report 
that  we  have  carefully  examined  the  coupons  deposited  by  you  in  the  vaults 
of  the  Missouri-IJncoln  Trust  Company,  and  hand  you  herewith  a  list  of 
names  and  addresses  of  the  successful  contestants;  together  with  their 
estimate  and  the  amount  of  the  prize  to  be  awarded. 

The  examination  of  coupons  was  conducted  under  the  personal  super- 
vision of  the  committee,  one  or  more  members  being  in  constant  attend- 
ance each  day  from  the  time  the  vault  was  opened  by  the  Missouri-Lincoln 
Trust  Company  until  closed.  Every  possible  precaution  was  used  by  the 
committee  to  insure  absolute  fairness  in  the  awards. 

(Signed) 

LON   V.   STEPHENS,  Chairman. 

F.  J.  CARLISLE. 
CONRAD   BUDKE. 

G.  A.  WURDEMAN. 

The  World's  Fair  Contest  produced  an  enormous  volume  of  cor- 
respondence, including  not  a  few  protests  and  controversies  of  vari- 
ous kinds.  The  delay  in  settlement  accentuated  these  difficulties,  and 
added  to  Lewis'  regret  over  the  entire  affair. 

THE    POSTOFFICE    INSPECTORS*   REPORT. 

A  statement  of  the  operations  of  the  company  was  submitted  to 
the  postoffice  inspectors  in  the  spring  of  1905,  shortly  before  the 
awards  were  made  and  the  contest  finally  closed.  Not  content  with 
this  statement,  the  inspectors  submitted  a  list  of  thirteen  questions 
demanding  supplementary  information,  Lewis  responded  fully  and 
submitted  a  complete  list  of  some  three  hundred  co-operating  news- 


250  THE  SIEGE  OF  UNIVERSITY  CITY 

papei-s  and  magazines.     He  also  supplied  a  list  of  the  awards  and 
the  names  and  addresses  of  the  winners. 

The  inspectors'  report,  under  date  of  June  5,  1905,  states  that 
the  case  had  been  investigated  by  Inspector  J.  D.  Sullivan  in  Octo- 
ber, 1903,  who  recommended  that  the  inquiry  be  closed  because  of 
the  ruling  of  previous  attorneys-general  that  such  a  guessing  con- 
test was  not  a  lottery.  Subsequently,  the  Postoffice  Department 
found  a  way  to  decide  that  such  contests  were  a  violation  of  the 
Postal  Laws  and  Regulations.  The  case  was  then  re-opened  and 
again  assigned  to  Inspector  Sullivan  who  reported  the  facts  to  the 
United  States  attorney.     But  no  action  was  taken. 

After  rehearsing  the  history  of  the  concern,  the  inspectors'  report 
proceeds  to  comment  upon  the  committee  of  awards  in  the  follow- 
ing language: 

None  of  the  Committee  of  Awards  are  connected  with  any  of  Lewis' 
enterprises,  except  that  Lon  V.  Stephens  and  F.  J.  Carlisle  are  bank  stock- 
holders. The  reputation  of  each  member  of  this  committee  may  be  called 
good.  Conrad  Budke  is  connected  with  Nelson  Chesman  Company,  an 
advertising  firm  that  has  freely  patronized  Lewis'  publications.  He  is  very 
friendly.  Judge  G.  A.  Wurdeman  was  formerly  probate  judge  of  St.  Louis 
county.  Carlisle  recently  had  an  arrangement  with  Lewis  by  which  he  was 
to  join  Lewis  and  his  associates  in  buying  the  St.  Louis  Star,  an  evening 
paper.  He  informed  us  today  that  he  had  arranged  with  Lewis  to  borrow 
$06,666.66  on  his  individual  note  unsecured,  to  pay  on  this  purchase.  Car- 
lisle is  said  to  be  worth  not  exceeding  five  thousand  dollars,  so  that  very 
friendly  relations  exist  between  him  and  Lewis. 

After  commenting  further  upon  tlie  settlement  of  tlie  contest  the 
inspectors   express  the  following  conclusions: 

As  this  contest  company  is  now  dead,  so  far  as  using  the  mails  is  con- 
cerned, and  as  Mr.  Lewis  submitted  the  plan  of  this  company  to  the  assis- 
tant attorney-general  for  the  PostofBce  Department  and  received  assur- 
ance that  his  plan  was  not  a  lottery,  and  that  his  literature,  when  amended 
as  suggested,  was  permissible  to  be  sent  through  the  mails,  and  many 
newspapers  which  were  carrying  advertisements  for  the  World's  Fair  Con- 
test Company  were  informed  that  the  advertisements  were  legitimately 
sent  through  the  mails,  and  afterwards,  when  the  Postoffice  Department 
made  a  ruling  that  similar  guessing  contests  were  a  lottery,  an  exception 
was  made  of  all  contests  in  progress  where  no  fraud  in  conducting  same 
could  be  shown,  we  are  of  opinion  that  no  jury  could  be  now  found  that 
would  convict  Lewis  or  anyone  connected  with  the  company  of  circulating 
lottery  matter  through  the  mails,  under  the  circumstances;  but  the  matter 
having  been  submitted  to  the  United  States  attorney  for  an  opinion,  we 
think  due  courtesy  to  him  calls  us  to  hold  the  case  open  until  he  has  ex- 
pressed an  opinion.  We,  therefore,  submit  this  report  for  consideration  in 
connection  with  our  recommendations  in  cases  Nos.  39640-C  and  53586-C 
for  a  fraud  order  against  the  People's  United  States  Bank,  as  indicating 
something  of  the  character  of  E.  G.  Lewis,  who  was  president  of  this 
company  and  now  president  of  the  bank. 

This  company  and  the  Lewis  Publishing  Company  are  the  only  concerns 
among  the  many  enterprises  owned,  controlled  and  managed  by  E.  G.  Lewis 
that  made  any  profit  during  the  year  1904,  and  we  think  that  success  in  a 
lottery  enterprise  does  not  commend  him  as  a  bank  manager. 

An  official  memorandum  by  E.  W.  Lawrence,  an  assistant  in  the 
office  of  the  assistant  attorney-general  for  the  Postoffice  Department, 


THE  DREYFUS  CASE  OF  AMERICA  25l 

was  served  on  Lewis  under  date  of  May  25,  1905,  containing  a  list 
of  the  enterprises  with  which  he  was  alleged  to  have  been  identified 
during  the  past  ten  years.  This  list  included  three  other  schemes 
which  have  not  been  mentioned.  One  of  these  was  an  electric  railroad 
company,  unnamed.  Lewis  was  never  identified  with  such  a  scheme, 
never  proposed,  promoted,  or  invested  in  an  electric  railroad,  and 
states  that  he  is  wholly  at  a  loss  to  know  how  the  inspectors  got 
hold  of  this  particular  idea.  In  the  course  of  his  investigation  by 
the  Congressional  Committee  this  colloquy  took  place: 

Mr.  Austin.     Did  you  finish  about  the  electrical  railroad  company? 

Mr.  Lewis.  I  will  have  to  leave  that  to  the  postoffice  inspectors.  In 
looking  back  over  my  mental  catalogue  I  cannot  find  any  electric  railroads. 
1  may  have  one  concealed  about  me  somewhere,  but  I  do  not  recall  it. 

THE    BACHELOR    PNEUMATIC    TUBE    COMPANY,    CALIFORNIA    VINEYARDS 
COMPANY  AND    OTHERS. 

The  other  two  schemes  with  which  Lewis  Avas  said  to  be  identified 
were  the  Bachelor  Pneumatic  Tube  Company  and  the  California 
Vineyards  Company.  As  to  the  first  of  these,  Lewis  acted  as  agent 
for  a  friend  in  procuring  a  Missouri  charter;  as  to  the  second,  he 
was  merely  an  investor.  The  official  memorandum  of  the  Depart- 
ment sums  up  its  list  with  the  following  sentence:  "Many  of  the 
above  named  schemes  have  been  failures ;  the  practices  of  Lewis  in 
conducting  them  have  been  questionable  and  some  of  the  schemes 
were  fraudulent."  The  accuracy  of  these  conclusions  may  now  be 
judged  by  the  reader  himself.  They  are  on  a  par  with  the  allega- 
tion that  Lewis  was  identified  with  an  electrical  railroad  or  with  the 
California  Vineyards  Company  or  with  the  Bachelor  Pneumatic 
Tube  Company.     As  to  these  concerns  Lewis  says: 

The  Bachelor  Pneumatic  Tube  Company  was  not  my  company.  John 
MuihoUand,  the  president,  is  a  personal  friend  of  mine.  He  came  to  St. 
Louis  preparatory  to  bidding  on  the  transit  of  the  mail  in  St.  Louis.  To 
secure  the  contract  he  had  to  form  a  company  in  Missouri.  Before  he 
could  complete  his  arrangements  in  St.  Louis,  he  was  telephoned  for  to 
come  back  to  New  York.  He  then  asked  me  to  take  out  the  charter  of  a 
small  Missouri  company  for  him.  The  stock  was  a  few  thousand  dollars. 
He  asked  me  to  put  up  the  money  to  secure  the  charter  and  said  he  would 
send  me  his  check  for  the  amount  on  his  return.  He  did  so,  and  then  took 
over  the  corporation  and  elected  the  proper  ofiicers. 

Bachelor  was  the  name  of  the  inventor.  I  was  not  interested  as  a  stock- 
holder, or  in  any  other  way.  I  simply  secured  the  charter  and  he  re- 
imbursed me  for  the  expense.  I  did  not  sell  any  stock,  or  advertise  it,  or 
liave  any  financial  interest  in  it.  I  never  heard  of  it  again.  Of  course,  I 
have  heard  of  Mr.  Mulholland  again.  He  is  one  of  the  stockholders  in  the 
Lewis  Publishing  Company  and  is  still  a  personal  friend.  I  believe  that 
concern  is  putting  in  the  same  pneumatic  tubes  in  London. 

The  California  Yineyards  Company  was  a  company  for  the  development 
of  the  Tokay  grape  business  in  California,  in  which  I  took  some  shares. 
I  did  not  organize  the  company.  Mr.  W.  H.  Verity  of  St.  Louis,  a  success- 
ful business  man,  went  to  California  and  became  interested  in  the  grape 
business.  He  came  back  to  St.  Louis  and  called  on  me,  among  others,  and 
got  me  to  invest  three  or  four  tliousand  dollars  in  a  company  to  purchase 
several  hundred  acres  of  Tokay  grape  land  out  there. 


262  THE  SIEGE  OF  UNIVERSITY  CITY 

Before  doing  so,  I  consulted  Mr.  John  A.  Lewis,  cashier  of  the  National 
liank  of  Commerce,  who  was  a  friend  but  not  a  relative  of  mine.  He 
wrote  to  banks  in  California  and  had  them  inquire  carefully  and  send  him 
an  exhausti\e  report.  On  this  report,  which  was  excellent,  a  number  of  us 
put  money  Into  it. 

1  believe  it  has  proved  very  successful.  I  know  I  got  my  money  back. 
In  addition,  I  sold  the  eight  bonds  I  had,  each  representing  an  acre,  at 
what  was  considered  a  great  sacrifice,  as  I  was  then  in  desperate  need  of 
money,  for  four  thousand  cash.  We  had  several  full-page  advertisements 
in  our  magazine  for  the  sale  of  bonds,  each  bond  representing  an  acre  of 
land.  A  trust  comj)any  held  the  title  to  the  land  until  the  vines  came  into 
bearing.  The  division  was  to  be  after  so  many  years.  I  understand  it  has 
worked  prosperously.  The  only  interest  I  had  were  those  eight  bonds  and 
I  believe  a  thousand  dollars  of  the  stock.  I  did  this  for  Mr.  Verity,  just 
as  others  were  doing  the  like  for  me.  I  inquired  into  it,  found  it  good,  and 
put  in  a  few  thousand  dollars.  I  allowed  Mr.  Verity  to  use  my  name  as 
having  done  so.  I  believe  he  used  my  name  as  one  of  the  directors.  I  do 
not  recall  any  editorial  endorsement  of  it,  as  that  was  against  the  policy 
of  the  paper,  xmless  it  was  our  own  enterprise,  for  which  we  took  respon- 
sibility, and  such  was  not  the  case. 

In  addition  to  the  above  concerns,  Lewis  occasionally  bought  a 
small  block  of  stock  in  a  speculative  scheme  in  which  a  friend  or 
acquaintance  happened  to  be  interested.  Among  such  investments 
were  a  few  shares  of  the  Becky  Sliarp  and  the  Sempire  Oil  Com- 
panies, respectively.  These  two  concerns  are  elsewhere  listed  among 
the  "false  and  fraudulent  schemes"  which  he  promoted.  These  facts 
are  mentioned  only  to  show  with  what  care  the  candid  reader  must 
discriminate  between  the  facts  of  record  as  to  Lewis'  career  and  the 
great  mass  of  apocryphal  legends  with  which  the  inspectors  and  the 
newspaper  paragraphers  have  industriously  embroidered  it. 

The  story  of  Lewis'  activities  as  promoter  is  summed  up  in  the 
merger  or  holding  company,  which  he  created  as  a  means  of  financ- 
ing his  various  enterprises.  This  concern  was  also  designed  in  the 
event  of  his  death  to  take  charge  of  and  manage  his  estate.  Lewis, 
therefore,  made  over  to  it  all  of  his  stock  holdings  in  his  own  enter- 
prises together  with  the  stock  and  bonds  which  from  time  to  time 
he  purchased  for  investment.  This  concern  thus  became  the  prin- 
cipal financial  instrument  employed  by  Lewis  in  building  up  his 
credit.     This  process  we  are  next  to  consider. 


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Facsimile  of  check  for  $1,000,000  signed  hy  P..  G.  Le~<cis.  .-Ilso  oilier  covnneicial 
paper  employed  in  the  org,<tnization  of  the  Universily  Heights  Realty  and  Development 
Company,   No%'cmber  i,   H102 


CHAPTER  XI. 
IS  CREDIT  A  DISCREDIT? 
Commercial  Agency  Reports — E.  G.  Lewis  Capitalized — Origin 
OF  THE   Development   Company — Dividend   and   Profit- 
Sharing  Certificates — How  Funds  Were  Raised — Earn- 
ings  AND    Dividends — The    Question    of    Good    Faith — 
The  Inspectors'  Report — A  Million  Dollar  Credit. 
"I  am  accused  by  the  inspectors  of  doing  business  on  credit,"  exclaimed 
Lewis  on  one  occasion,  "as  if  having  credit  was  a  discredit.     I  had  a  total 
banliing  credit  of  over  a  million  dollars  at  the  time  the  first  of  these  attacks 
was  made.     How  did  T  get  that  credit?     I  was  not  born  with  it.     I  got  it, 
because  the  banks  of  St.  Louis,  Chicago  and  other  cities  had  handled  about 
two  million  dollars  of  my  commercial  paper,  and  I  had  always  paid  my 
notes  when  they  fell  due." 

Most  business  men  will  agree  with  Lewis  that  the  building  up  of 
a  line  of  credit  in  the  brief  span  of  five  years  from  nothing  to  a 
total  of  one  million  dollars  is  by  no  means  the  least  of  his  spectac- 
ular achievements.  For  the  inspectors  assert  that  shortly  before 
Lewis  and  Nichols  started  the  Winner  Magazine  in  1899,  they 
owed  nothing,  for  the  reason  that  their  credit  was  "below  tolera- 
tion." How  then  did  Lewis  acquire  the  credit  which  enabled  him 
to  finance  the  magazines,  the  inventions,  the  real-estate  deals,  the 
great  buildings,  the  model  city,  and  many  other  ventures,  the  story 
of  which  has  now  been  laid  before  the  reader? 
commercial  agency  reports. 

The  reports  of  the  great  commercial  agencies  are  like  the  read- 
ings of  a  kind  of  business  thermometer.  They  register  the  rise  and 
fall  of  the  credit  of  business  men,  and  record  the  opinions  of  experts 
as  to  their  financial  status.  The  inspectors  were  quite  correct  in 
saying  that  Lewis  had  no  credit  at  the  time  he  started  the  Winner 
Magazine.  This  is  shown  by  the  following  extract  from  a  report 
of  one  of  the  great  commercial  agencies,  dated  February,  1899: 

Edward  Gardner  Lewis  is  married,  aged  about  thirty  years.  He  claims 
to  own  his  residence  at  769  Euclid  avenue,  worth  about  six  thousand,  five 
hundred  dollars,  and  encumbered  for  three  thousand,  five  hundred  dollars 
in  his  own  and  his  wife's  name.  He  also  claims  ten  thousand  dollars'  worth 
of  stock,  and  three  thousand  dollars  first  mortgage  bonds  in  the  Hunyadi 
Salts  Company.  He  says  that  he  owes  borrowed  money  and  notes  out- 
standing in  Connecticut,  and  can  not  state  his  debts,  but  that  they  are 
considerable.  He  was  formerly  a  salesman  for  the  Moffett-West  Drug 
Company,  and  was  said  to  be  shrewd,  energetic  and  of  good  habits.  He 
was  later  one  of  Lewis  &  Leonard  under  the  style  of  the  Diamond  Candy 
Company  on  Main  street,  who  failed.  He  was  president  of  the  Hunyadi 
Salts  Company.  Their  affairs  are  in  litigation,  and  his  interest  is  deemed 
of  little  value.     He  is  president  of  the  Progressive  Watch  Company  in  the 

255 


266  THE  SIEGE  OF  UNIVERSITY  CITY 

Ozark  building.  They  have  several  schemes  which  bring  them  profit  with 
but  little  outlay.  Lewis  is  also  salesman  for  Nelson  Chesman  &  Co.,  an 
advertising  agency.  Vv'e  hear  nothing  against  him  personally,  but  he  is  not 
thought  desirable  for  credit.  He  is  believed  to  be  largely  in  debt,  and 
worth  nothing  available  to  creditors. 

A  more  UBpromising  basis  on  which  to  rear  a  towering  financial 
structure  would  be  difficult  to  imagine.  Yet,  less  than  two  years 
later,  the  same  commercial  agency  records  the  fact  that  Lewis  had 
at  last  laid  hold  of  the  first  rungs  of  the  commercial  ladder,  and 
was  mounting  rapidly.  At  the  risk  of  some  slight  repetition  of 
events  with  wliich  the  reader  is  familiar,  we  add  this  review  of 
Lewis'  progress  as  showing  the  impression  he  was  then  making  in 
the  best  informed  commercial  circles. 

Lewis  is  now  about  thirtj'^-two  years  of  age.  For  years  he  was  in  the 
employ  of  various  drug  houses  here  and  elsewhere,  but  for  some  time  past 
has  been  operating  on  his  own  account  under  various  styles.  Some  few 
years  ago  he  organized  the  Hunyadi  Salts  Company,  of  which  he  was  chief 
owner.  He  is  understood  to  have  placed  the  business  on  a  paying  basis; 
but  on  account  of  injunction  proceedings  instituted  against  the  company 
to  restrain  it  frorii  using  the  style  adopted,  the  business  ran  down.  He  is 
understood  to  have  lost  about  all  his  means.  After  several  other  ventures, 
he  organized  with  others  the  Mail  Order  Publishing  Company.  He  became 
president  and  manager,  but  on  account  of  old  matters  holding  over  him,  he 
holds  only  a  nominal  amount  of  shares.  The  company  publishes  the  monthly 
journal  called  the  "Winner,"  subscription  price  ten  cents  per  year.  This 
has  met  with  pronounced  success.  It  claims  a  circulation  of  four  hundred 
thousand  copies,  is  well  patronized  by  advertisers,  and  has  proved  a  source 
of  large  revenue  to  its  owners.  Later  on  he  invested  in  what  has  since 
become  known  as  the  telephone  coin  controller  and  Lewis  addressing  ma- 
chine. 

In  June,  1901,  he  organized  the  Development  and  Investment  Company 
imder  the  laws  of  Missouri,  of  which  he  and  his  wife  are  sole  owners. 
The  object  of  this  company  was  to  take  over  the  controlling  interests  in 
his  publishing  business  and  other  enterprises.  He  was  elected  president 
and  treasurer  of  the  company.     These  offices  he  still  holds. 

He  is  reported  as  possessed  of  more  than  ordinary  ability.  He  is  very 
ingenious  and  energetic,  and  has  succeeded  in  associating  with  him  some 
prominent  and  wealthy  citizens,  who  are  of  the  opinion  that  he  has  a  very 
bright  future.  The  affairs  in  which  he  is  identified  are  increasing  in 
volume  continually.  So  far  he  has  proved  equal  to  the  task  of  taking  care 
of  them.  His  financial  responsibility  is  thought  to  rest  entirely  with  the 
various  businesses  above  enumerated. 

The  passing  of  another  year  added  these  items  to  the  reports  of 
the  commercial  agencies  which,  as  all  business  men  know,  lie  at  the 
basis  of  financial  credit: 

Lewis  is  not  engaged  in  any  business,  individually,  though  he  is  president 
and  principal  owner  of  tlie  Development  and  Investment  Company,  presi- 
dent and  treasurer  of  the  Lewis  Publishing  Company,  president  of  the 
Controller  Company  of  America  and  interested  in  several  other  corpora- 
tions, in  all  of  which  he  is  very  active.  He  owns  a  controlling  interest  in 
all  of  these  companies,  which  is  vested  in  the  Development  and  Investment 
Company,  a  Missouri  corporation,  capitalized  at  one  hundred  thousand 
dollars,  full  paid,  with  a  large  surplus.  Individually,  he  owns  his  resi- 
dence at  7(i9  Euclid  avenue,  worth  al)out  eight  thousand  dollars.  He  gener- 
ally carries  a  balance  of  from  five  thousand  to  ten  thousand  to  his  credit 
in  bank. 


THE  DREYFUS  CASE  OF  AMERICA  257 

He  began  business  here  some  years  since  on  a  very  modest  capital. 
He  has  displayed  unusual  ability  and  application,  and  has  met  with  more 
than  ordinary  success.  He  is  founder  of  the  Lewis  Publishing  Company, 
in  which  liis  largest  interests  centre.  From  this  he  is  imderstood  to  receive 
very  large  profits.  The  University  Heights  Company  is  also  regarded  as 
a  valuable  asset.  The  other  corporations  have  as  yet  not  been  placed  on 
a  paying  basis.  They  are  being  financed  by  capital  obtained  on  the  paper 
of  the  Development  and  Investment  Company. 

In  his  various  enterprises  Mr.  I-ewis  has  enlisted  the  aid  and  influence 
of  many  of  the  most  prominent  and  influential  citizens  of  this  community. 
He  is  well  spoken  of  by  his  bankers,  where  he  has  been  able  to  secure 
accommodations  in  sums  ranging  from  twenty-five  thousand  to  one  hundred 
thousand  dollars.  These  he  has  taken  care  of  satisfactorily.  His  success 
has  been  obtained  during  the  past  four  years.  Well-posted  authorities  do 
not  hesitate  to  proclaim  him  ingenious,  and  of  unusual  executive  ability. 

E.    G.    LEWIS    CAPITALIZED. 

Such  is  the  contemporary  account  of  the  stages  by  which  Lewis* 
line  of  credit  was  built  up.  His  chief  financial  instrument  was  the 
Development  and  Investment  Company,  which  he  organized  in 
June  of  1901.  It  is  the  story  of  that  concern  with  which  the  pres- 
ent chapter  has  to  do.     This  is  his  own  story: 

I  was  then  actively  engaged  in  a  number  of  different  enterprises  in 
St.  Louis.  In  some  of  them  I  bore  the  relation  of  a  guarantor  to  those 
who  became  associated  with  me.  I  made  myself  personally  responsible  for 
the  outcome.  But,  in  another  class  of  enterprises,  I  simply  went  in  with 
other  men  on  an  equal  footing.  We  all  took  the  same  chances.  My  judg- 
ment in  the  promotion  of  new  enterprises  began  to  be  somewhat  considered. 
1  was  invited  to  become  director  in  one  company  after  another.  I  was 
offered  considerable  interests  in  different  concerns  for  the  use  of  my  name. 
I  stood  well  in  the  community  at  that  time,  and  had  built  up  a  considerable 
banking  and  mercantile  credit. 

I  was  at  that  time  a  heavy  borrower.  I  was  indebted  to  my  banks  for 
immense  sums,  utilized  in  building  up  my  various  enterprises.  Whenever 
I  could  borrow  a  large  sum  at  six  per  cent,  and  make  fifteen  or  twenty 
per  cent  on  it,  I  did  so. 

ORIGIN  OF  THE  DEVELOPMENT  COMPANY. 

The  question  frequently  came  up  with  men  like  Major  Kramer  and 
others:  "Lewis,  you  are  in  a  number  of  enterprises.  If  you  dropped  dead 
one  night  there  would  be  chaos.  Why  do  you  not  execute  some  sort  of  a 
trust  agreement  to  take  up  all  your  interests  and  hold  them  intact,  so  as 
to  carry  them  on  in  the  event  of  your  sudden  death?" 

Another  reason  why  I  started  the  Development  Company  grew  out  of 
an  incident  which  happened  while  I  was  financing  the  Winner  Magazine.  I 
started  that  paper  with  a  capital  of  $U5,  a  right  idea  and  the  determina- 
tion to  make  it  the  greatest  magazine  in  the  world.  With  little  credit  and 
no  capital  I  soon  met  the  usual  problem  of  ready  money.  I  had  to  sell  a 
one-fifth  interest  to  Mr.  McMillan  of  the  St.  Louis  Union  Trust  Company 
for  five  hundred  dollars.  This  sum  was  enough  to  give  me  a  good  start. 
Three  months  later  I  went  to  the  banker  and  told  him  I  wanted  to  buy 
out  his  fifth  share  of  my  paper.  I  said  frankly  that  in  my  opinion  hid 
fifth  share  would  in  a  few  years  be  worth  a  fortune,  but  that  I  would  give 
him  five  thousand  dollars  for  it.  He  decided  to  take  me  up.  I  raised  the 
money  and  paid  him  out.  This  was  one  thousand  per  cent  bonus  on  five 
hundred  dollars  in  three  months.  This  set  me  thinking.  I  thought  in  future 
I  ought  to  be  able  to  finance  my  enterprises  myself. 


258  THE  SIEGE  OF  UNIVERSITY  CITY 

With  these  thoughts  in  mind,  I  evolved  a  holding  company,  which  I  called 
the  Development  and  Investment  Company,  representing  practically  myself 
Incorporated.  This  concern  was  to  hold  all  of  my  interests  in  the  different 
enterprises.  It  was  thus  practically  a  controlling  company  over  them  alL 
1  then  arranged  with  several  prominent  men,  including  Major  Kramer, 
L.  B.  Tebbetts  and  others,  to  become  the  trustees  in  such  a  way  that,  in 
the  event  of  my  sudden  death,  they  would  have  become  the  actual  directors 
of  the  company  with  full  control  of  all  these  properties.  They  would,  there- 
fore, have  been  in  position  to  conserve  and  hold  them  together  without  any 
disturbance  of  their  relations,  and  to  carry  out  all  my  obligations.  This 
plan  was  adopted  to  avoid  trying  to  write  a  will  which  would  cover  and 
protect  everything  in  the  event  of  my  sudden  death. 

The  Development  and  Investment  Company  absolutely  controlled  all  the 
other  enterprises  as  the  owner  of  a  majority  of  their  stock.  It  was,  there- 
fore, secured  by  their  combined  assets.  With  me  were  associated  strong 
and  able  men  as  officers  and  directors.  During  my  life  they  assisted  and 
advised  me.  In  the  event  of  my  death  another  president  would  be  elected, 
and  a  fund  of  four  hundred  thousand  dollars  in  cash  would  come  into  the 
treasury  from  my  life  insurance,  to  offset  any  bad  effects  my  death  might 
have. 

The  Development  and  Investment  Company  was,  therefore,  organized 
under  the  laws  of  Missouri  in  June,  1901.  The  capital  stock  was  five  hun- 
dred thousand  dollars,  but  the  assets  were  many  times  this.  I  held  all  the 
stock  except  one  or  two  shares  issued  to  Mrs.  Lewis  and  someone  else  to 
comply  Avith  the  law.  I  executed  a  trust  deed  on  my  stock  so  that  in  the 
event  of  my  death  the  trustees  would  become  directors  and  step  in  for 
the  benefit  of  the  stockholders.  This  was  independent  of  the  organization 
of  the  compan}'',  and  supplementary  to  it. 

HOW   FUKDS   WERE   RAISED. 

The  organization  of  this  company  put  a  new  status  to  all  that  I  was 
doing.  1  was  no  longer  an  individual!  I  became  a  corporate  being,  all 
concerned  knowing,  however,  that  I  was  practically  the  entire  corporation. 
As  an  illustration,  I  could  issue  a  note  or  bond  in  this  Development  Com- 
pany for  five  or  ten  years,  whereas  I  could  only  borrow  as  an  individual 
for  periods  ranging  from  one  to  six  months.  In  my  activities  I  had  found 
that  a  large  part  of  my  time  was  taken  up  in  looking  after  my  loans  and 
their  renewals.  I  was  now  able  to  get  the  money  for  a  longer  period  and 
at  more  reasonable  rates  of  interest,  and  to  avoid  the  payment  of  com- 
missions to  secure  loans.     All  this  I  felt  that  I  was  entitled  to  do. 

The  company  at  first  issued  these  notes  to  men  like  Major  Kramer  and 
other  friends  and  associates  of  mine.  They  took  large  amounts,  because 
the  notes  were  made  at  first  with  a  high  rate  of  interest  and  for  a  long 
period  of  time.  First,  they  were  for  twelve  per  cent.  This  was  not  unusual 
then.  I  have  paid  more  than  twelve  per  cent  many  times  since  to  some  of 
the  banking  institutions  of  the  West.  This  was  on  time  loans.  The  usual 
process  in  such  cases  is  to  pay  the  legal  rate  of  interest,  together  with  a 
commission  to  someone  for  investigating  and  recommending  the  loan.  The 
legal  rate  of  interest  in  Missouri  was  at  first  eight  per  cent.  Then  it  was 
reduced  to  six  per  cent.  Now  it  is  five  per  cent.  I  paid  on  the  notes  of 
the  Development  and  Investment  Company  at  the  rate  of  twelve  per  cent 
for  about  a  year.  Then  I  was  able  to  reduce  it.  I  afterwards  reduced  it 
again  and  again.  The  safer  the  enterprise  became  and  the  more  estab- 
lished, the  lower  the  rate  I  could  borrow  at.  That  stands  to  reason. 
Large  amounts  were  purchased  by  my  friends.  This  gave  me  a  new  money 
resource. 

The  note,  in  addition  to  its  interest,  had  a  profit-sharing  feature.     It, 
participated  in  the  earnings  of  the  stocks  which  were  its  assets.     A  state- 
ment was  made  from  time  to  time  to  the  investors  as  to  what  were  the 
assets  of  the  institution  and  what  stocks  it  was  to  hold.    My  recollection  is 


THE  DREYFUS  CASE  OF  AMERICA  259 

that  I  transferred  practically  all  my  properties  and  holdings  to  the  Devel- 
opment Company.  As  far  as  I  can  recall,  I  left  out  nothing  but  my  per- 
sonal and  private  property,  like  my  watch  and  clothes.  There  were  some 
interests  of  a  personal  nature  which  did  not  enter,  as  for  instance  my  own 
home,  which  was  built  and  owned  by  Mrs.  Lewis.  Everything  that  I  held 
in  the  way  of  business  investment  went  to  the  company.  I  transferred  to 
it  all  my  stock  in  the  Winner  Magazine,  the  Woman's  Farm  Journal  and 
the  Richarz  Pressrooms.  I  assigned  all  my  patents.  I  promoted  the  Lewis 
Publishing  Company  through  this  concern,  and  then  assigned  to  it  all  my 
stockholdings  in  that,  although  I  afterwards  acquired  considerable  interest 
in  the  Lewis  Publishing  Company  in  addition.  All  this  property,  there- 
fore, stood  as  security  for  the  notes;  but,  whenever  I  was  requested  to  do 
so,  I  endorsed  the  notes  as  well  as  signing  them  as  president  of  the  com- 
pany. I  did  not  endorse  every  note  because,  for  instance,  Major  Kramer 
and  other  personal  friends  and  associates  did  not  ask  me  to  do  so. 

This  Development  and  Investment  Company  went  on  for  seven  or  eight 
years.  The  salary  which  I  received  individually  from  the  various  corpora- 
tions did  not  go  into  the  Development  Company;  but  it  received  the  earn- 
ings of  the  stock  and  of  the  interests  which  they  represented.  This  was 
specifically  set  forth.  I  drew  a  salary  from  the  Development  Company  as 
its  president. 

DIVIDEND   AND   PROFIT-SHARING    CERTIFICATES. 

In  addition  to  the  notes  of  the  Development  and  Investment 
Company  taken  by  Lewis'  friends  and  associates,  he  issued  after 
its  organization  in  June,  1901,  during  the  remainder  of  that  year, 
and  also  during  the  first  six  months  of  1902,  two  forms  of  securities. 
One  of  these  was  a  guaranteed  dividend,  the  other  a  profit-sharing 
certificate.  Both  matured  in  two  years  from  the  date  of  issue.  In- 
terest on  the  first  of  these  was  payable  monthly  at  the  rate  of  one 
per  cent  of  its  face  amount.  The  principal  was  payable  at  maturity. 
The  right  was  reserved  to  the  directors  to  call  in  the  certificates 
on  payment  of  principal  and  interest.  The  investor  also  retained 
the  privilege  of  withdrawing  his  investment  within  thirty  days  after 
demand,  less  dividends  previously  earned.  In  the  language  of  this 
document  "the  side  which  demands  the  cancellation  of  the  certificate 
before  maturity  loses  the  dividends." 

No  interest  was  guaranteed  upon  the  profit-sharing  certificate. 
The  holder  was  entitled  instead  to  share  in  the  profits  of  the  con- 
cern "on  all  its  investment  properties,  in  proportion  to  the  profits 
accruing  on  all  outstanding  certificates,  and  in  the  increment  in 
value  of  all  said  investment  properties  as  evidenced  by  their  in- 
crease in  valuation  between  the  date  of  its  issue  and  the  date  of  its 
maturity."  The  cash  profits  were  said  to  be  payable  monthly;  the 
increments  in  value,  at  maturitv  or  cancellation  of  the  certificates. 
The  same  rights  were  reserved  to  the  directors  and  the  investors 
respectively,  of  calling  in  the  certificates  and  refunding  the  invest- 
ment, or  withdrawing  it  on  thirty  days'  notice,  as  in  the  case  of 
the  other  issue. 

Applications  for  between  four  and  five  hundred  of  these  certifi- 
cates are  still  on  file  in  Lewis'  vault,  chiefly  from  small  investors, 
ranging  from  sums  of  ten  dollars  upwards.  Many  are  in  the  hun- 
dreds ;  a  few,  in  the  thousands  of  dollars.     The  dates  of  issue  range 


260  THE  SIEGE  OF  UNIVERSITY  CITY 

from  July,  1901,  to  July,  1902.  The  vouchers  are  numbered  ser- 
ially. They  appear  to  constitute  nearly,  if  not  quite,  an  entire 
issue.  With  them  are  filed  the  receipts  of  the  investors  for  divi- 
dends and  accrued  profits.  According  to  these  the  guaranteed  in- 
terest at  the  rate  of  one  per  cent  per  month  appears  to  have  been 
promptly  paid.  A  dividend  on  the  profit-sharing  certificates  was 
paid  in  January,  1902,  for  the  period  from  the  beginning  of  the 
concern  in  June,  1901,  to  the  end  of  the  year,  at  the  rate  of  two 
and  a  half  per  cent  each  month,  or  thirty  per  cent  per  annum. 
Vouchers  are  on  file  showing  the  payment  of  the  guaranteed  rate 
of  interest  during  the  early  part  of  the  year  1902,  and  also  of  divi- 
dends on  profit-sharing  certificates  at  the  rate  of  three  per  cent  per 
month,  or  fortj'-eight  per  cent  per  annum. 

EARNINGS   AND    DIVIDENDS. 

The  assets  of  the  Development  and  Investment  Company  during 
this  period  consisted  of  Lewis'  holdings  in  the  Mail  Order  Publish- 
ing Company,  the  Farm  Journal  Company,  the  Richarz  Pressrooms 
Company  and  the  undeveloped  patents  of  the  addressing  machine, 
the  steam  trap  and  the  telephone  controller.  Hence  the  above  divi- 
dends, if  earned,  must  have  been  represented  by  dividends  on  the 
stocks  of  the  three  going  concerns,  or  by  the  sale  of  stock  in  them, 
or  in  one  or  more  of  the  undeveloped  enterprises. 

Lewis'  break  with  Nichols,  it  will  be  remembered,  occurred  in 
May  of  1902.  The  latter  asserts  as  one  of  the  grounds  of  his  will- 
ingness to  separate  from  Lewis,  that  the  dividends  paid  by  the 
Development  and  Investment  Company,  of  which  he  was  secretary 
for  something  over  a  year,  were  fraudulent.  He  says  that  they 
Avere  paid  out  of  alleged  profits  made  by  other  companies  when,  in 
fact,  there  had  been  no  profits.  Nichols,  however,  admits  that  he 
was  not  well  enough  acquainted  with  the  business  to  even  under- 
stand the  nature  of  its  securities.  He  further  asserts  that  the  De- 
velopment and  Investment  Company,  although  designed  to  be  a 
holding  company,  never  held  the  stocks  of  other  corporations  as 
long  as  he  was  with  them.  In  view  of  the  fact  that  Nichols'  signa- 
ture actually  appears  upon  a  large  number  of  certificates  of  stock 
transferred  to  the  Development  and  Investment  Company  by  Lewis 
in  these  same  enterprises,  Nichols'  testimony  on  this  head  would 
appear  to  be  wholly  without  value.     Nichols  further  says: 

L,ewis  also  had  half  a  dozen  things  in  mind.  Among  these  was  the 
scheme  of  the  University  Heights  Company.  I  did  not  like  that.  I  told 
him  that  it  was  not  proper  and  not  right,  and  that  I  really  didn't  care  to 
go  into  it.  He  also  had  on  foot  the  proposition  of  putting  up  a  great  big 
building,  as  he  afterwards  did.  I  could  not  see  where  he  could  get  the 
ready  money  with  which  to  put  up  such  a  building.  All  this  made  me  timid 
about  staying  with  him.  I  was  afraid  Lewis  would  get  into  trouble  on 
account  of  his  Development  and  Investment  Company. 

The  truth  appears  to  be  that  Nichols  was  so  much  absorbed  with 
the  detail  of  the  work  of  the  Winner  Magazine  that  he  paid  com- 
paratively  little   attention    to    Lewis'    outside   ventures.      Nichols 


THE  DREYFUS  CASE  OF  AMERICA  261 

admits  that  he  was  not  familiar  with  accounts  and  that;,  though  all 
the  books  were  open  to  him,  he  could  not  even  tell  whether  or  not 
the  company  was  making  money.  His  personal  interest  appears  to 
have  been  confined  to  the  Winner,  and  to  his  salary.  His  objections 
to  Le'vvis'  other  enterprises  seem  to  have  been  in  large  part  due  to  a 
belief  that  they  were  absorbing  Lewis'  time,  funds,  and  energy,  to 
the  disadvantage  of  the  publication  business.  Nichols,  with  more 
modest  ambitions,  would  have  been  content  to  let  well  enough  alone. 

NicholSj  in  short,  failed  to  grasp  the  true  functions  of  the  De- 
velopment and  Investment  Company,  either  as  a  holding  company 
for  Lewis'  going  concerns  (such  as  the  Mail  Order  Publishing  Com- 
pany, the  Farm  Journal  Publishing  Company,  and  the  Richarz 
Pressrooms  Company)  ;  or  as  fiscal  agent  for  the  promotion  of  new 
enterprises.  Yet  his  opinions  were  accepted  by  the  inspectors  and 
became  the  standard  by  which  Lewis  was  later  judged.  It  is  there- 
fore important  both  that  the  facts  should  be  clearly  understood 
and  that  Nichols'  limited  conception  of  the  nature  and  extent  of 
Lewis'  various  schemes  should  be  fully  realized. 

A  going  concern  must  first  meet  its  current  obligations  and  in- 
terest on  its  secured  indebtedness,  if  any,  before  it  can  pay  divi- 
dends upon  its  stock.  Such  dividends  must  then  be  formally  voted 
by  its  board  of  directors,  in  accordance  with  the  rules  prescribed  by 
its  articles  of  association  and  by-laws,  and  by  the  statutes  of  the 
state  under  which  it  is  incorporated.  None  of  the  going  concerns, 
stocks  of  which  were  held  by  the  Development  and  Investment  Com- 
pany, declared  such  dividends  during  the  years  1901  and  1902. 
Hence,  no  such  earnings  on  their  stocks  held  by  the  Development 
and  Investment  Company  were  available  during  the  period  when  it 
was  offering  its  own  guaranteed  dividend  and  profit-sharing  certifi- 
cates to  the  public  and  paying  on  them  interest  and  dividends  rang- 
ing from  twelve  to  forty-eight  per  cent  per  annum. 

What  Nichols  appears  to  have  overlooked,  or  failed  wholly  to 
understand,  is  that  the  Development  Company  as  a  holding  com- 
pany for  the  stocks  of  going  concerns,  and  as  fiscal  agent  in  the 
promotion  of  new  enterprises,  not  only  had  the  right  to  sell  the  stock 
of  either  class,  and  use  the  proceeds  for  the  purpose  of  hiring  more 
money  with  which  to  finance  them,  but  that  such  was  the  precise 
purpose  for  which  it  was  incorporated ! 

The  usual  custom  in  promoting  a  new  enterprise  is  for  the  pro- 
moter to  secure  enough  subscriptions  to  the  stock  to  provide  the  nec- 
essary working  capital,  and  to  receive  in  return  for  his  services  some 
proportion  of  the  capital  stock  as  a  bonus.  Lewis,  as  a  promoter 
of  new  enterprises,  instead  of  accepting  a  portion  of  the  stock  for 
himself  as  an  individual,  turned  his  promoter's  stock  bonus  in  each 
case  over  to  the  Development  and  Investment  Company.  For  this 
was,  in  effect,  himself  vmder  another  name.  This  concern  could  then 
borrow  money  and  issue  its  notes  upon  the  security  of  the  stocks 
which  it  held  as  assets.    When  the  time  came  to  pay  interest  upon 


262  THE  SIEGE  OF  UNIVERSITY  CITY 

its  notes  it  could,  if  tliere  had  been  no  dividends  declared  upon  the 
stocks  which  it  controlled,  sell  those  stocks  themselves  and  pay  its 
own  interest  charges.  Or,  it  could  declare  dividends  to  its  own 
stockholders  out  of  the  jiroceeds. 

THE     QUESTION    OF    GOOD    FAITH. 

Had  Lewis  organized  the  Development  and  Investment  Company- 
only  for  the  purpose  of  financing  new  enterprises,  he  would  be  open 
to  the  gravest  criticism.  This  very  method  of  organizing  a  holding 
company  to  act  as  fiscal  agent  for  new  promotions,  and  of  thus  in 
•effect  financing  one  concern  out  of  the  sales  of  stock  of  another,  or 
of  a  whole  group  of  speculative  enterprises,  has  long  been  a  favorite 
method  of  illegitimate  promoters.  The  scheme  is  perfectly  legal. 
If  conducted  in  good  faith,  and  without  misrepresentation,  it  is  im- 
pregnable against  attack  in  the  courts.  Its  essential  difficulty  lies 
in  the  fact  that  the  costs  of  such  a  holding  company,  including  the 
salaries  of  its  officers  and  other  expenses  of  promotion,  are  usually 
excessive.  They  often  eat  up  the  funds  that  ought  properly  to  be 
devoted  to  the  actual  development  of  the  various  projects.  The 
assets  of  holding  companies  of  this  type,  operated  by  illegitimate 
promoters,  are  usually  of  a  wholly  speculative  nature.  Experience 
has  shown  that  a  majority  of  all  speculative  propositions  fail.  Great 
success  is  always  very  exceptional.  The  lack  of  a  single  strong, 
profitable  enterprise  as  the  backbone  of  such  a  holding  company 
must  eventually  bring  it  to  the  ground. 

Lewis'  good  faith  in  connection  with  the  Development  and  In- 
vestment Company  is  perfectly  apparent  from  the  fact  that  he  as- 
signed to  it  his  live  and  tangible  assets.  These  included  the  Win- 
ner, The  Woman's  Farm  Journal  and  the  Richarz  Pressrooms.  All 
were  profitable  and  valuable  properties.  The  fact  that  these  con- 
cerns did  not  declare  dividends  during  this  period  is  rather  to  be 
taken  as  evidence  in  their  favor  than  the  contrary.  It  indicates  the 
policy  of  the  management  to  re-invest  the  earnings  as  working  capi- 
tal in  the  development  of  future  business.  All  the  facts  surround- 
ing these  properties  prove  conclusively  that  they  possessed  excep- 
tional earning  power.  They  were  so  rated  by  expert  commercial 
opinion. 

The  Development  and  Investment  Company  was  free  to  sell  the 
stocks  which  it  held  in  any  of  these  enterprises,  or  hypotliecate  them 
for  loans,  or  borrow  upon  its  own  notes  of  banks  or  individuals,  or 
otherwise  raise  money  in  any  way  it  legitimately  could,  with  which 
to  meet  the  interest  upon  its  guaranteed  dividend  certificates.  It 
could  also  declare  dividends  from  any  funds  in  its  possession,  if  it 
could  show  an  excess  of  assets  over  liabilities  upon  such  fair  valua- 
tion as  its  directors  might  choose  to  place  upon  the  stocks  in  its  pos- 
session. 

Whether  Lewis  could  really  afford  to  pay  out  twelve  per  cent 
and  upwards  for  money,  or  whether  his  motive  in  making  such  pay- 
ments was  not  rather  to  stimulate  still  further  sales  of  the  cer- 


THE  DREYFUS  CASE  OF  AMERICA  263 

tificates  of  the  Development  and  Investment  Company,  is  perhaps 
an  open  question.  But  that  the  investors  were  amply  secured  by  the 
assets  of  the  company,  that  such  interests  and  dividends  were  in 
fact  paid  for  a  considerable  time,  and  that  the  Development  and 
Investment  Company  was  within  its  legal  rights  in  so  doing,  seem 
facts  beyond  dispute. 

Lewis  took  advantage  of  his  option  to  retire  a  large  portion  of 
the  first  issue  of  the  certificates  of  the  Development  Company  be- 
fore maturity.  All  were  promptly  paid  when  due.  These  facts 
would  seem  to  dispose  of  the  contention  which  has  been  voiced  so 
often  in  more  recent  years,  notably  by  an  Eastern  agricultural  pub- 
lication, that  Lewis'  intent  at  all  times  has  been  to  obtain  the  money 
of  country  people  for  his  schemes  without  any  thought  of  ever  re- 
turning any  of  it  to  the  investor.  The  allegation  has  been  boldly 
made  that  Lewis  never  has  met  promptly  any  of  his  obligations. 
The  untruth  of  such  a  statement  is  clearly  proved  by  vouchers  still 
in  his  possession,  which  have  been  carefully  inspected  by  the  present 
writer. 

Lewis,  on  June  1,  1902,  at  the  end  of  the  first  fiscal  year  of  the 
Development  and  Investment  Company  (in  course  of  a  financial 
statement)  claims  personal  assets  at  their  face  value  in  excess  of  one 
hundred  and  fifty  thousand  dollars.  These  include  at  par  the  stocks 
of  the  Mail  Order  Publishing  Company,  the  Farm  Journal  Com- 
pany, the  Controller  Company  of  America,  and  the  Allen  Steam 
Trap  and  Separator  Company,  together  with  sundry  other  holdings. 
He  asserts  that  the  last  sale  of  stock  of  the  Mail  Order  Publishing 
Company  was  at  four  hundred  per  cent  over  par,  making  his  hold- 
ings of  that  stock  alone  worth  one  hundred  and  twenty  thousand 
dollars.     He  says: 

The  net  profits  of  the  Winner  Magazine  for  the  next  twelve  months, 
based  on  the  present  business  and  the  contracts  in  hand,  should  exceed 
one  hundred  thousand  dollars,  or  twice  its  capitalization.  A  fair  estimate 
of  the  value  of  this  publication  is  five  hundred  thousand  dollars.  My  hold- 
ings are  three-fifths  of  the  whole. 

Lewis  further  says  that  "other  assets  of  a  valuable  sort,  includ- 
ing the  stock  of  the  Lewis  Addressing  Machine  Company,  are  with- 
held as  not  yet  far  enough  developed  to  have  a  stable  valuation." 

Any  presumption  that  Lewis  would  have  risked  his  valuable  hold- 
ings in  the  Winner  and  the  Woman's  Farm  Journal  as  security  for 
the  notes  of  the  Development  and  Investment  Company,  if  that 
concern  had  not  been  organized  in  good  faith  for  what  he  deemed 
legitimate  purposes,  is,  in  view  of  all  the  circumstances,  quite  pre- 
posterous. Every  ascertainable  fact  as  to  the  status  of  his  affairs 
during  the  year  1902,  when  the  Development  and  Investment  Com- 
pany was  paying  dividends  at  the  rate  of  fort5''-eight  per  cent, 
indicates  rather  that  Lewis  was  simply  intoxicated  by  the  amazing 
prosperity  of  his  enterprises,  and  possessed  an  unlimited  confidence 
in  many  new  schemes  which  he  then  had  on  foot.  All  this,  it  must 
be  remembered,  was  prior  to  the  purchase  of  the  eighty-five  acres 


264  THE  SIEGE  OF  UNIVERSITY  CITY 

of  valuable  land  outside  St.  Louis,  in  what  is  now  University  City, 
which  afterwards  led  to  his  extensive  real-estate  and  building  pro- 
jects, and  the  consequent  criticism  thereupon. 

Whether  or  not  Lewis  would  have  been  successful  in  developing 
any  of  his  mechanical  devices  if  the  prosperity  of  his  main  business 
as  publisher  had  been  uninterrupted,  is,  of  course,  open  to  conjec- 
ture. But  even  had  they  all  failed,  the  losses  would  have  fallen 
exclusively  upon  the  stockholders.  They  were  wealthy  men,  abund- 
antly cajoable  of  forming  their  own  judgment  as  to  business  affairs, 
who  went  into  these  various  projects  with  their  eyes  wide  open. 
The  sole  exception  was  a  small  amount  of  stock  in  the  Fibre  Stop- 
per Company.  This,  as  we  have  seen,  was,  as  far  as  possible,  repur- 
chased. Lewis'  own  losses  would  have  fallen  upon  the  Development 
and  Investment  Company;  but  the  holders  of  the  securities  of  that 
concern  would  not  have  been  greatly  affected,  because  they  were 
abundantly  secured  by  its  ownership  of  a  controlling  interest  in  his 
publication  and  real  estate  interests.  Lewis'  judgment  as  to  these 
enterprises,  or  his  wisdom  in  distracting  his  energies  from  his  pub- 
lishing enterprise  to  so  many  other  concerns,  may,  of  course,  be 
called  in  question  by  business  men.  But  at  all  events  these  enter- 
prises show  a  marked  improvement  in  the  character  of  his  under- 
takings over  his  early  ventures  in  the  field  of  proprietary  articles. 
They  also  clearly  indicate  the  character  of  the  men  who  had  become 
his  close  friends  and  intimate  business  associates  at  this  period. 

THE    inspectors'    REPORT. 

The  entire  history  of  the  Development  and  Investment  Company 
and  its  various  promotions,  from  the  time  of  its  organization  up  to 
the  opening  of  the  "Siege"  of  University  City  in  the  spring  of 
1905,  has  now  been  fully  outlined.  The  steam  trap  was  practically 
abandoned.  The  addressing  machine  project  was  in  abeyance.  The 
fibre  stopper  project  was  in  course,  of  active  development.  The 
telephone  controller  had  been  placed  upon  the  market,  and  its  pros- 
pects were  then  exceptionally  bright.  The  University  Heights 
Company  was  booming.  The  Lewis  Publishing  Company  was  in  a 
highly  prosperous  condition.  Such  were  Lewis'  obligations  and  such 
his  resources  when  the  Development  and  Investment  Company  as  a 
whole  was  investigated  by  the  inspectors.  A  statement  of  the  De- 
velopment and  Investment  Company  was  submitted  to  them  as  of 
March  14,  1905,  together  with  a  brief  resume  of  the  facts  already 
familiar  to  the  reader. 

On  receipt  of  this  communication  Inspector-in-Charge  Fulton,  on 
March  23,  1905,  submitted  a  list  of  twenty-two  questions,  inquiring 
with  minute  particularity  into  the  details  of  the  company's  busi 
ness.  Lewis  responded  with  a  four-page  communication  furnishing 
the  information  requested  as  best  he  could,  in  so  far  as  he  deemed 
the  inquiries  pertinent  to  postoffice  business.  The  result  was  a  re* 
port  under  date  of  June  1,  1905,  by  Inspectors  W.  T.  Sullivan  and 


THE  DREYFUS  CASE  OF  AMERICA  265 

J.  L.  Stice  to  Inspector-in-Charge  Fulton  at  St.  Louis,  incorporating 
Lewis'  statement*  and  commenting  in  part  as  follows: 

In  a  general  way,  this  companr  was  originally  planned  as  a  part  of  a 
bond-seJling  proposition.  These  bonds  were  offered  to  the  public  at  par 
with  six  per  cent  guaranteed  interest.  For  a  time,  eight  per  cent  was 
guaranteed.  The  value  of  these  bonds  as  an  investment  depends  upon  the 
assets  of  the  company  and  their  individual  earning  power.    *    *    * 

It  is  our  belief  that  the  Development  and  Investment  Company  was 
organized  by  Lewis  as  a  part  of  a  scheme  to  defraud  the  public,  and  that 
the  original  plan  was  superseded  by  the  People's  United  States  Bank, 
which  we  have  already  shown  has  resulted  in  fraud  and  misuse  of  funds, 
and  that  these  results  were  obtained  principally  through  the  aid  of  the 
Woman's  Magazine  and  the  Woman's  Farm  Journal,  by  reason  of  the 
second-class  privilege  of  mailing  at  the  pound  rate.  We  transmit  here- 
with some  of  the  advertising  matter  appearing  in  these  magazines,  exploit- 
ing the  sale  of  stocks  and  bonds  composing  the  assets  of  the  Development 
and  Investment  Company,  and  invite  your  attention  to  the  untrue  repre- 
sentations made,  and  which  (sic),  by  comparison  with  the  real  facts, 
establish  in  our  minds  that  the  Development  and  Investment  Company  was 
devised  by  Lewis  with  intent  to  defraud  the  public  through  the  sale  of 
valueless  stock,  and  that  the  salaries  paid  to  himself  and  F.  J.  Cabot  have 
not  been  earned  by  the  company,  nor  has  the  interest  paid  prior  to  the 
year  1904  been  earned,  but  paid  from  the  sales  of  new  stock. 

We  recommend  that  E.  G.  Lewis  and  F.  J.  Cabot,  officers,  and  the  Devel- 
opment and  Investment  Company  be  required  to  shew  cause  why  a  fraud 
order  should  not  be  issued  against  them,  and  the  reference  of  this  report 
to  the  honorable  assistant  attorney-general  for  the  Postoffice  Department 
and  the  honorable  third  assistant  postmaster-general  for  their  consideration 
in  connection  with  other  cases. 

Such  was  the  report  and  recommendation  of  the  inspectors  as  to 
the  net  results  of  Lewis'  labors,  which,  as  we  have  seen,  had  the 
approval  of  the  great  commercial  agencies,  of  many  prominent  busi- 
ness men  and  bankers  of  St.  Louis,  and  of  the  banking  institutions 
from  which  his  million  dollar  line  of  credit  was  obtained. 


*This  statement  was  as  follows: 

ASSETS. 

Preferred    stock,    Lewis    Publishing    Company 34,S00.00 

Common    stock,    Lewis   Publishing    Company 710,000.00 

Stock,    U.    S.    Fibre    Stopper    Company 567,886.00 

Preferred    stock.     University    Heights    R.    &    D.    Company '  10.580.00 

Common   stock.   University   Heights   R.   &   D.    Company 537,594.00 

Other  stocks  and  bonds  at  par  or  better,  paying  dividends 45,643.75 

Other  stocks,  good,   not  dividend  paying.   Controller  Co.  of  America 64,643.75 

Stocks,   uncertain  value 84,450.00 

Demand  loans 142,139.4s 

Time    loans 29,000.74 

Cash  5,147.06 

Insurance  on  life  of  E.  G.  Lewis 380,000.00 

Real  estate  account  in  suspense ^ 117,848.75 

$2,728,935.99 
UABILITIES. 

Bonds,  3-4  years,  6  per  cent „ 165,500.00 

Bonds,  3-4  years,  8  per  cent 131,600.00 

Pass  book  accounts 19,607.49 

Accounts  payable,  rtock  and  bond  purchases 77j4S5.48 

Bills  payable,  2-3   years,  land  purchases 117.848.75 

Capital  stock 500,000.00 

By  balance,  surplus „ 1,716,924.27 

$2,728,935.99 


266  THE  SIEGE  OF  UNIVERSITY  CITY 

The  principal  source  of  the  inspectors'  information  as  to  the 
early  history  of  this  concern  appears  to  have  been  the  unverified 
opinion  of  Howard  Nichols.  About  the  only  other  source  of  infor- 
mation which  they  have  placed  on  record  is  the  statement  made  to 
them  by  Lewis  himself.  This  they  totally  discredited.  They  seem 
ever  to  have  arrived  at  their  decisions  by  reading  between  the  lines 
of  Lewis'  written  statements,  and  by  a  process  of  analysis  and  a 
series  of  inferences  of  their  own.  The  facts  as  to  the  various  busi- 
nesses that  made  up  the  assets  of  the  Development  Company  at  this 
time  having  been  set  forth  above,  the  reader  may  form  his  own  con- 
clusions as  to  the  wisdom  of  the  inspectors'  recommendation.  Hap- 
pily, it  was  disregarded  by  the  Postoffice  Department  itself.  No 
fraud  order  was  ever  issued  against  the  Development  Company. 
They  were  not  even  cited  to  show  cause  why  a  fraud  order  should 
not  be  issued  against  them. 

A   MILLION    DOLLAR    CREDIT. 

We  may  now  sum  up  the  tale  of  Lewis'  million  dollar  credit  by 
the  following  extract  from  his  testimony  at  the  Ashbrook  Hearings: 

The  Development  and  Investment  Company  was  the  end  of  the  building- 
up  process  of  my  credit.  As  has  been  shown,  I  started  the  publishing  of 
the  Winner  Magazine  practically  without  capital.  I  obtained  subscribers 
by  means  of  the  endless  chain.  But  this  involved  the  obligation  of  issuing 
the  paper.  The  first  year  or  two  the  question  of  finance  was  a  very  hard 
puzzle.  The  first  relief  I  recall  was  in  this  way:  The  officers  of  the  Na- 
tional Bank  of  Commerce  sent  for  me.  When  I  called  they  asked  me 
where  I  was  banking.  I  told  them  I  was  depositing  in  such  a  place,  but 
that  I  had  not  really  begun  to  bank  as  yet.  They  asked  me  why  I  did  not 
do  business  with  a  real  bank.  I  said  I  would  be  glad  to;  that  I  was  from 
Missouri  and  would  be  pleased  to  be  shown.  Then  they  asked  me  what 
kind  of  a  line  of  discount  I  wanted.  They  had  invited  me,  and  I  did  not 
hesitate  to  tell  them.  I  think  it  was  up  to  one  hundred  thousand  dollars 
that  I  mentioned— something  like  that — it  might  have  been  fifty  thousand 
dollars.  They  told  me  to  come  back  the  next  day,  and  when  I  came  they 
said,  "You  get  it." 

They  had  inquired  carefully  in  the  meantime,  and  had  evidently  been 
observing  my  business  operations  for  some  time  past,  as  they  seemed  to 
know  almost  as  much  about  my  business  as  I  did  myself.  I  asked  them  if 
it  was  really  true  that  I  could  get  the  money,  if  it  was  a  real  discount; 
because  I  would  like  to  borrow  it  for  six  months  to  begin  with.  I  did  not 
want  to  come  back  every  week  to  renew  it.  They  said  they  would  make  the 
first  discount  for  six  months.  I  said,  "All  right;  give  me  a  blank  note." 
They  did  so,  and  I  filled  it  up  and  handed  it  back.  I  wanted  to  see  if  it 
was  really  so.  They  discounted  the  note  and  placed  the  amount  to  my 
credit.  The  first  entry  in  my  pass  book  with  the  National  Bank  of  Com- 
merce is  a  discount  for  six  months  of  that  note. 

I  then  began  to  realize  for  the  first  time  in  my  life  that  without  capital 
there  was  a  kind  of  capital  which  was  much  more  valuable  than  the  actual 
cash,  namely  credit,  or  a  good  name.  I  was,  therefore,  very  careful  to 
meet  every  obligation  on  tiie  very  day,  not  renewing  anything,  but  paying 
one  hundred  cents  on  tiie  dollar.  Even  though  at  the  time  I  was  walking 
down  town  and  back  to  save  carfare,  and  going  witliout  lunch,  if  I  had  a 
note  at  a  bank,  when  that  note  became  due,  instead  of  going  in  and  asking 
for  its  renewal,  I  paid  it.  Then,  perhai)s,  a  few  days  afterward  I  went  back 
and  borrowed  more.    That  was  legitimate.    The  banks  like  that  manner  of 


THE  DREYFUS  CASE  OF  AMERICA  267 

dealing.  It  showed  the  bank  my  ability  to  clean  up  quite  square.  All 
banks  like  to  see  all  their  money  in  once  in  a  while. 

Gradually,  I  built  up  a  growing  credit  with  the  banks.  Business  men 
and  bankers  began  to  be  interested  in  me.  I  was  a  young  man,  pushing 
everything  ahead,  and  in  the  thick  of  everything  that  turned  up.  One 
bank  after  another  asked  for  my  business.  They  usually  got  a  part  of  it, 
though  I  would  not  tell  them  it  was  only  a  part.  I  began  to  build  up  two 
parallel  lines  of  credit.  One  was  a  Ijanking  credit  in  St.  Louis  on  my 
different  companies'  paper  with  my  endorsement,  or  on  my  own  paper;  the 
other  was  a  parallel  line  outside  St.  Louis,  in  Chicago,  New  Orleans,  Lafay- 
ette, Fort  Wayne  and  New  York.     And  for  this  reason: 

1  saw  myself  becoming  engaged  in  larger  and  larger  enterprises,  reach- 
ing out  and  toucliing  other  men's  interests.  I  knew  that,  sooner  or  later,  I 
would  be  coming  in  conflict  with  the  interests  of  these  rich  and  powerful 
men  with  whom  I  was  beginning  to  get  acquainted  and  do  business;  and 
that  some  day  I  might  find  all  my  loans  called  in,  and  be  unable  to  turn 
around.  So  I  arranged  an  outside  line  of  credit  in  other  cities.  I  handled 
it  this  way:  If  I  was  borrowing  from  the  local  bank  this  month,  then  I  was 
letting  the  outside  banks  rest  a  little  and  carrying  a  pretty  heavy  deposit 
with  them.  Next  month  I  would  clean  up  my  local  banks,  paying  all  back, 
and  lean  on  the  outside  banks  a  while.  In  this  way  I  had  parallel  lines  of 
credit.    Then  I  kept  that  credit  clean,  by  meeting  every  obligation. 

None  of  the  stock  of  my  enterprises  was  offered  publicly;  it  was  all 
taken  by  wealthy  men.  In  St.  Louis  at  that  time  there  was  a  great  deal  of 
money.  Men  were  making  money  rapidlJ^  The  general  spirit  was  such 
that  if  a  man  was  making  good,  seemed  successful  and  had  ideas  which 
they  approved  of,  they  would  back  him  to  almost  any  limit.  I  was  becom- 
ing weli  acquainted  then  with  the  wealthy,  active  and  aggressive  business 
men  of  St.  Louis.  When  some  proposition  for  promoting  an  invention  or 
ether  enterprise  would  come  up,  I  took  one  of  two  different  attitudes  in 
regard  to  it.  Either  I  invited  my  friends  and  my  associates  to  come  into  it. 
with  the  representation  that  I  would  be  personally  responsible,  and  if  we 
lost,  would  make  good  their  investment  and  let  them  out  whole;  or  I  would 
put  it  lip  to  them  to  exercise  their  own  judgment.  They  were  independent 
business  men  of  means.  If  they  decided  a  thing  was  good,  and  it  after- 
wards turned  out  badlj',  they  then  took  their  own  losses. 

My  total  line  of  credit,  including  the  paper  of  my  various  enterprises 
with  my  endorsement,  and  my  own  paper,  at  the  close  of  the  World's  Fair 
was  in  excess  of  a  million  dollars.  I  regarded  my  equities  in  my  holdings 
as  worth  between  one  and  two  millions  of  dollars  at  present  values;  and 
believed  that  they  had  a  prospective  value  of  a  great  deal  more.  In  other 
words,  I  considered  myself  at  that  time  easily  a  millionaire. 

We  are  now  on  the  eve  of  the  Siege  of  University  City.  The 
interest  from  now  on  centres  almost  exclusively  in  the  two  best  be- 
loved children  of  Lewis'  brain,  the  Woman's  Magazine  and  the  Peo- 
ple's Bank,  both  of  which  we  shall  see  done  to  death  in  the  tragic 
sequel.  As  no  one  else  can  conceive  the  ideal  phases  of  these  two 
gigantic  projects  so  vividly  as  they  presented  themselves  to  the  eye 
of  Lewis'  imagination,  the  reader  will  gain  the  clearest  impression 
of  the  central  facts  of  this  story  if  Lewis  is  allowed  to  introduce 
these  for  himself  as  he  conceived  them.  The  two  succeeding  chap- 
ters will,  therefore,  be  devoted  respectively  to  carefully  compiled 
accounts  from  various  published  and  authentic  sources  of  Lewis' 
own  stories  of  the  Woman's  Magazine,  and  the  People's  Bank. 


CHAPTER  XII. 
THE  RISE  OF  THE  WOMAN'S  MAGAZINE. 
Lewis'  Own  Story — Business  Policies — Mutual  Confidence — 
World's  Fair  Guests — Influence  of  the  New   Home — 
Lewis   Before    Madden — The   Editorial    End — The   In- 
vestment IN  Plant — The  Question  of  NoxMinal  Rate — 
The    Ten-Cent-a-Year    Price — Getting    New    Subscrib- 
ers— Handling    the    Subscription    Lists — The    Double- 
Spread  IN  the  St.  Louis  Republic — A  Visit  to  the  Octa- 
gon Tower — The  Magazine  Press  Building. 
The  Woman's  Magazine  was  started  about  four  years  ago  with  a  capital 
of  a  dollar  and  twenty-five  cents  and  a  right  idea,  namely,  that  a  magazine 
well  edited,  well  illustrated  and  well  printed,  at  the  low  price  of  ten  cents 
a  year  would  sweep  the  country.    About  sixty  days  after  the  start,  a  one- 
fifth  interest  in  it  was  sold  to  N.  A.  McMillan  for  five  hundred  dollars.    Two 
months  later  we  paid  him  five  thousand  dollars  in  cash  to  get  it  back.     He 
has  just  paid  us  five  thousand  dollars  for  a  one  two-hundredth  interest.   The 
growth  of  the  magazine  has  been  so  rapid  that  it  has  required  super-human 
efforts  to  get  together  the  necessary  mechanical  equipment  for  producing  it. 
It  has  been  the  most  remarkable  phenomenon  in  the  publishing  world. 

So  Lewis  portrays,  in  a  letter  to  his  bankers  in  the  fall  of  1904, 
and  elsewhere  in  his  promotion  literature  of  that  period,  the  rise 
of  the  Woman's  Magazine,  the  great  central  symbol  of  achievement 
in  his  own  mind,  about  which  all  his  dreams  and  projects  clustered, 
and  the  gigantic  success  of  which  appeared  to  him  to  augur  the 
feasibility  of  each  new  endeavor. 

This  story  has  been  often  dwelt  upon  by  Lewis  by  way  of  descrip- 
tion and  analysis.  Among  the  chief  of  these  occasions  are  first,  the 
use  of  this  story  as  the  basis  of  the  promotion  literature  of  the  Peo- 
ple's United  States  Bank;  and,  second,  the  hearing  at  Washington 
before  the  third  assistant  postmaster-general  in  defense  of  the  very 
life  of  this,  his  first-born  child.  Upon  both  these  occasions  Lewis 
was  wrought  to  a  high  pitch  of  nervous  exaltation.  Both  accounts 
are  vibrant  with  strong  emotional  feeling.  They  may  be  taken  not 
only  as  affording  an  insight  into  the  reaction  of  Lewis'  mind  in  the 
upbuilding  of  his  principal  publication,  but  also  as  characteristic  of 
his  mode  of  expression  in  its  happiest  vein.  The  difference  in 
Lewis'  viewpoint  under  these  widely  different  circumstances  justifies 
the  reproduction  in  substance  of  both  versions  of  his  story.  Omis- 
sions have  been  made  to  avoid  duplication  where  the  two  accounts 
are  closely  parallel. 

lewis'  own  story. 
The  paragraphs  that  follow  are  taken  from  the  introduction  to 
the  principal  prospectus  of  the  People's  Bank,  entitled  "Banking 

268 


THE  DREYFUS  CASE  OF  AMERICA  269 

by  Mail/'  a  bulky  pamphlet  issued  by  Lewis  in  the  fall  of  1904. 
They  form  a  good  example  of  his  colloquial  style  when  taking  the 
public  into  his  inmost  confidence.  Only  by  a  proper  appreciation 
of  this  and  of  Lewis'  similar  outpourings  in  the  columns  of  the 
Woman's  Magazine,  in  circular  letters,  and  in  personal  contacts  with 
his  readers,  can  the  secret  of  his  enormous  personal  following,  and 
consequent  ability  to  project  and  realize  great  undertakings,  be 
fully  grasped. 

A  little  over  five  years  ago  I  started  the  Woman's  Magazine.  The  idea  in 
ray  mind  was,  that  if  a  magazine  could  be  produced  at  ten  cents  a  year 
(which  was  no  more  of  a  drop  in  price  under  modern  conditions  than  the 
reduction  from  five  cents  to  a  penny  in  the  daily  newspaper),  and  this 
magazine  could  be  beautifully  printed,  well  illustrated,  and  carefully  edited, 
it  would  sweep  the  countrj'.  The  fact  that  it  was  ten  cents  a  year  did 
not  mean  a  cheapness  in  the  magazine  itself,  but  an  advance  step  in  journal- 
ism. l*'or  such  a  magazine  to  be  successful,  its  circulation  must  of  neces- 
sity be  enormous.  Its  production  must  be  carried  on  in  the  most  economical 
manner.  The  most  modern  machinery  and  the  most  perfect  equipment  must 
be  supplied.  The  great  quantity  in  which  all  materials  could  be  purchased 
would  then  of  itself  insure  the  lowest  obtainable  prices. 

My  idea  was  that  if  a  kind  of  circulation  could  be  gained  for  such  a 
magazine  sufficient  in  value  to  justify  an  advertising  rate  in  proportion 
to  its  enormous  volume,  it  would  become  not  only  one  of  the  most  profit- 
able publications  in  existence,  but  also  one  of  the  most  powerful.  The  aver- 
age woman  loves  a  bargain.  There  are  a  hundred  magazines  at  a  dollar  a 
year,  any  one  of  which  is  almost  as  good  as  another.  There  is  only  one 
magazine  at  ten  cents  a  year.  The  average  man  will  purchase  a  magazine 
on  the  news-stand  occasionally,  provided  it  catches  his  eye;  but  it  takes 
a  woman  to  subscribe  for  it,  to  look  for  it  every  month,  and  to  read  it  closely 
when  she  gets  it. 

BUSINESS  POLICIES. 

Now,  the  development  of  such  a  magazine  must  be  along  very  Carefully 
laid  lines.  First  of  all,  it  must  establish  in  the  minds  of  its  readers,  the 
most  implicit  confidence  in  its  publishers.  It  must  be  clean  and  sweet.  At 
no  matter  what  cost,  it  must  stand  for  the  protection  of  its  readers  as  to 
everything  contained  within  its  columns.  A  monthly  visitor  in  a  million 
homes,  read  by  the  mother  and  her  children,  its  whole  make  up  must  be  such 
as  to  make  it  welcome.  A  magazine  sold  on  the  ne%vs-stands  depends,  to  a 
large  extent,  for  its  circulation,  on  catching  the  eye.  Beautifully  colored 
covers,  finely  enameled  paper  stock,  magnificent  illustrations,  and  articles 
by  people  with  high  sounding  titles,  become  a  necessity  to  such  a  publica- 
tion, because  it  must  compete  with  hundreds  of  other  magazines  in  open 
sale.    It  never  comes  in  contact  with  the  bulk  of  its  readers  in  a  direct  way. 

One  of  the  largest  monthly  magazines  in  the  United  States  recently  is- 
sued a  statement  of  the  nature  of  its  circulation  of  nearly  a  half-million 
copies,  showing  that  less  than  6  per  cent  went  to  paid-in-advance  subscrib- 
ers. The  other  94  per  cent  was  purchased  from  the  news-stands  by  un- 
known people.  They  never  came  into  any  intimate  relation  with  the  publish- 
ers at  all.  Such  a  magazine  practically  secures  no  franchise.  It  has  no  hold 
on  its  readers,  and  is  a  mouth-to-mouth,  a  hand-to-hand  proposition.  My 
idea  was  that  by  reducing  the  price  of  my  magazine  to  ten  cents,  and  not 
putting  it  on  the  news-stands  at  aU,  but  depending  altogether  on  paid-in- 
advance  subscriptions,  it  would  be  brought  into  a  personal,  intimate  relation 
with  its  readers,  such  as  no  other  magazine  ever  had.  It  would  know  them 
all  by  name,  would  be  in  constant  communication  with  them  by  mail,  and 
would  build  up  a  franchise  such  as  no  publication  ever  had  before. 

Publications  today  are,  to  a  very  large  extent,  supported  by  their  ad- 


270  THE  SIEGE  OF  UNIVERSITY  CITY 

vertising  revenue.  Not  one  per  cent  of  all  existing  publications  could  con- 
tinue in  theii-  present  form  without  their  advertising  income.  This  is  to  the 
benefit  of  the  reader,  for  it  enables  the  publisher  to  give  a  magazine  which 
actually  costs  two  or  three  times  what  the  reader  pays  for  it.  The  telegraph 
news  in  a  daily  paper  costs  more  than  the  publishers  receive  for  the  whole 
paper.  The  magazine  published  at  one  dollar  per  year  spends  an  average 
of  fifty  cents  on  the  dollar  to  secure  its  subscribers,  or  to  effect  its  sale  on 
the  news-stands.  Then  it  must  deliver  more  than  a  dollar's  worth  in  costly 
presswork  on  the  highest  grade  of  paper,  in  order  that  it  may  retain  its 
standing  in  competition  with  the  other  news-stand  publications.  In  such  a 
magazine  as  I  contemplated,  this  feature  would  be  entirely  eliminated. 

The  greatest  problem  in  all  publications  is  that  of  subscriptions.  Pub- 
lishers often  pay  two  dollars  to  secure  a  new  subscriber  at  one  dollar.  At 
ten  cents  a  year,  this  problem  of  subscription  was  entirely  eliminated.  In 
fact,  as  developments  have  shown,  our  great  problem  is  to  hold  down  our 
subscriptions,  which  are  now  increasing  at  the  rate  of  from  sixty  to  ninety 
thousand  a  month. 

Next  after  the  question  of  circulation  comes  that  of  advertising.  A  stand- 
ing notice  was  kept  by  us  in  every  issue  of  the  Woman's  Magazine  that 
while  we  could  not  undertake  to  adjust  mere  differences  of  opinion  between 
our  readers  and  our  advertisers,  yet  we  would  make  good  in  cash  to  any 
reader  any  loss  sustained  through  being  defrauded  bj''  anj''  announcement  in 
its  columns.  This  necessitated  the  most  careful  supervision  and  entailed 
on  us  an  enormous  loss,  through  being  obliged  to  refuse  tens  of  thousands 
of  dollars  of  advertising  offered  us.  I  venture  to  state  that  no  daily  or 
Sunday  newspaper  today  would  dare  to  print  such  a  notice  in  its  columns. 
If  you  think  they  would,  take  up  your  Sunday  newspaper  and  read  the 
advertisements.  We  probably  refused,  on  this  account,  more  advertising 
than  we  accepted.  I  will  not  here  attempt  to  go  over  the  early  struggles 
of  the  publishing  of  the  Woman's  Magazine.  Suffice  it  to  say  that  I  lived 
through  it,  and  am  now  enjoying  the  fruits.  You  don't  want  a  man  who 
has  walked  over  Niagara  Falls  on  a  tight  rope  to  sit  down  and  try  to  tell 
you  how  he  got  over  there.  It  is  enough  that  he  reached  the  land  on  the 
other  side. 

I  knew  that  my  theories  were  right.  My  confidence  in  them  and  in  my 
ability  to  carry  them  through;  the  noble  support  and  assistance  of  many 
kind  friends  who  stood  by  me  through  thick  and  thin;  and  the  able  labors 
of  my  associates,  have  produced  the  result.  The  Woman's  Magazine  today 
has  the  largest  circulation  of  any  publication  in  the  world — in  fact,  al- 
most double  that  of  any  other  existing  publication.  It  reaches  every  tenth 
home  in  the  United  States  and  Canada.  It  requires  15  carloads  of  paper 
to  produce  a  single  issue,  and  8,000  pounds  of  printing  ink  to  print  it.  Four 
hundred  and  eighty  people  are  employed  in  its  production.  It  owns  the 
largest,  most  beautiful  and  costly  publishing  plant  in  the  world,  built  at  a 
cost  of  ft'600,000  in  cash,  without  mortgage  or  lien.  It  has  the  confidence 
of  probably  ten  millions  of  readers.  It  has  carried  through,  from  time  to 
time,  enterprises  tending  to  increase  this  confidence,  which  were,  each  of 
them,  in  themselves  a  large  undertaking. 

THE    ADVERTISING    END. 

My  theory  in  regard  to  thd  advertising  end  of  the  paper  was,  that  as 
a  publication  must  derive  its  profits  from  its  advertising  columns,  the  more 
it  received  from  its  advertising  space,  the  better  paper  it  could  give  to 
its  readers.  And  yet  the  more  money  it  would  make.  Because,  tlie  better 
the  paper,  the  more  carefully  it  would  be  read.  And  the  more  carefully  it 
was  read,  the  better  the  results  to  the  advertiser.  Like  a  snow  ball,  it  would 
roll  up  of  its  own  accord.  The  main  principle  involved  in  the  advertising 
feature  was  the  obtaining  of  an  enormous  circulation.  The  Woman's  Maga- 
zine equals  today  the  combined  circulation  of  over  twenty  thousand  average 


'^^l}^:V  .^ 


iC»i»iii!i^  which  con~'eyed  guests  of  Camp  Lczvis  to  and  from  the  IVorlds  Fair 
"Camp  Lewis,  showing  in  the  backgroxuid  the  grounds  and  buildings  of  the  Louisiana 
Purchase  Exposition  " 


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THE  DREYFUS  CASE  OF  AMERICA  273 

newspapers.  The  combined  advertising  rates  of  these  newspapers  would  be 
seven  or  eight  times  that  charged  by  the  Woman's  Magazine. 

Arguing  that  the  advertiser  did  not  advertise  "for  his  health,"  but  be- 
cause he  wanted  results,  I  almost  immediately  went  into  an  enormous  ad- 
vertising campaign,  I  inserted  full  pages  in  all  the  other  newspapers  and 
magazines  of  any  standing  in  the  United  States,  announcing  the  plan  and 
scope  of  the  Woman's  Magazine,  and  telling  that  its  subscription  price  was 
only  ten  cents  a  year.  The  theory  on  which  this  was  done,  was  that  out 
of  a  given  number  of  readers,  but  a  small  proportion  were  what  might  be 
called  advertisement  answerers.  In  order  to  reach  this  small  proportion,  the 
advertiser  must  pay  for  the  entire  circulation.  If  I  could  draw  together  in 
the  Woman's  Magazine  circulation,  the  small  percentage  from  each  of  the 
other  magazines  and  publications  who  were  advertisement  answerers,  then 
practically  the  whole  of  my  circulation  would  be  such  as  was  most  desir- 
able to  the  advertiser  and  most  profitable  to  him.  One  woman  would  be  of 
a  disposition  such  as  would  make  her  sit  down  and  answer  an  advertise- 
ment. Another  would  never  answer  an  advertisement  in  the  course  of  her 
life.  The  problem  was  to  get  the  one  and  eliminate  the  other.  In  all  other 
publications  they  are  mixed.  I  kept  my  announcements  standing  in  the  other 
publications,  at  an  expenditure  of  nearly  a  quarter  of  a  million  dollars,  until 
they  would  no  longer  produce  results.  One  well  known  Eastern  magazine 
with  a  circulation  of  100,000  subscribers,  contributed  through  my  announce- 
ment over  80,000  subscribers  to  my  list.  This  80,000,  on  a  fair  basis  of  rea- 
soning, was  the  entire  circulation  of  that  magazine  which  was  worth  hav- 
ing, from  the  advertiser's  point  of  view.  By  this  advertising  campaign,  we 
secured  in  the  neighborhood  of  a  million  subscribers. 

The  advertisers  of  the  United  States  who  use  publications  of  general 
circulation  do  so  with  what  are  called  the  "keyed"  advertisements.  There 
is  some  key  in  their  address,  such  as  "Department  B"  or  a  change  in  an 
Initial  of  the  firm,  such  as  .John  A.  Smith,  John  B.  Smith  and  John  C. 
Smith.  Each  different  publication  is  given  a  different  key.  Thus  they  can 
tell  exactly  what  they  derive  from  a  given  advertisement  as  compared  with 
its  cost.  The  old  method  was  to  advertise  blindly,  trust  to  a  kind  Provi- 
dence for  results,  and  believe  the  circulation  liar  as  to  what  was  given  in 
the  way  of  circulation.  This  has  gone  out  of  vogue.  Today  the  great  ad- 
vertiser knows  almost  to  a  dollar  the  results  of  his  advertising,  provided  he 
is  after  direct  results. 

I  also  adopted  the  theory  that  an  advertiser  was  just  as  much  entitled 
to  know  what  he  was  getting  in  the  way  of  quantity  and  quality  of  circula- 
tion, as  any  merchant  when  purchasing  goods.  In  place  of  the  usual  circu- 
lation lies,  I  printed  each  month  in  the  columns  of  the  Magazine  itself,  an 
exact  statement  over  the  signature  of  the  United  States  postmaster,  of 
exactly  how  many  copies  of  the  previous  issue  had  been  mailed.  This  was 
made  possible  because  our  entire  edition  goes  out  through  the  mails,  and 
as  the  Government  is  paid  a  certain  amount  for  each  pound,  the  number 
of  copies  mailed  can  be  figured  out  exactly.  This  is  very  different  from  the 
sale  of  a  magazine  on  the  news-stand,  where  the  number  of  returned  unsold 
copies  is  seldom  brought  to  the  attention  of  the  advertiser.  In  fact,  the 
whole  basis  and  foundation  of  the  Woman's  Magazine  was  absolute  good 
faith  with  its  readers  and  with  its  advertisers.  If  we  made  a  promise,  we 
kept  it;  whether  it  was  with  a  ten-cent  subscriber  or  with  a  ten  thousand- 
dollar  advertiser.  If  we  owed  a  bank  ten  thousand  dollars,  when  it  was 
due  we  did  not  go  in  with  eight  of  it  and  ask  them  to  renew  the  other 
two,  but  we  paid  the  whole  ten.  The  next  day,  possibly,  we  went  back  and 
borrowed  fifteen  thousand,  but  that  was  up  to  them.  A  credit  was  thus 
built  up  which  was  better  than  the  possession  of  the  actual  capital. 

The  result  of  all  this  is  that  while  two  million,  two  hundred  thousand  peo- 
ple now  pay  me  ten  cents  a  year  for  my  publications,  amounting  to  a  total 
of  $220,000,  yet  the  fact  that  I  have  combined,  under  one  system,  this  vast 


274  THE  SIEGE  OF  UNIVERSITY  CITY 

number  of  people  who  can  be  reached  through  these  mediums,  enables  me 
to  derive  an  income  in  excess  of  a  million  dollars  a  year  from  the  advertising 
columns.  Had  1  a  single  man  or  woman  paying  me  $220,000  a  year,  I  could 
not  get  any  revenue  from  the  advertising  columns.  The  return  to  the  reader 
is  in  proportion,  because  I  am  able  to  spend  even  twenty-five  or  thirty 
cents  per  year  on  the  production  of  the  Magazine  which  I  sell  to  him  for 
ten  cents. 

MUTUAL    CONFIDENCE, 

From  the  very  start,  we  cultivated  the  closest  and  most  intimate  rela- 
lions  with  our  readers.  If  the  baby  was  sick,  we  heard  about  it.  If  the 
old  cow  died,  we  got  the  first  news.  We  did  not  offer  our  Magazine  for 
sale  on  the  news-stands.  We  did  not  desire  the  circulation  in  the  great  cities, 
nor  did  we  wish  to  come  in  competition  with  the  high  priced  magazines  on 
the  news-stands  in  the  endeavor  to  catch  the  eye.  What  we  wanted  was  our 
readers'  hearts  and  confidence.  As  the  Magazine  grew,  this  intimate  rela- 
tion between  myself  and  my  readers  grew  stronger.  I  soon  found  that 
each  of  them  felt  a  personal,  warm  interest  in  tlie  success  of  the  paper.  I 
will  say,  frankly,  that  to  the  encouragement  and  the  expressions  of  confi- 
dence and  faith  of  ten  thousand  women,  unknown  to  me  otherwise  than 
through  their  letters,  I  owe  more  than  to  any  other  source,  the  inspiration 
that  has  made  possible  the  success  of  this  paper. 

Following  out  our  plan  to  establish  the  most  implicit  confidence  in  the 
minds  of  our  readers,  we  time  and  again  refunded  large  amounts  of  money 
in  small  sums  each,  to  a  great  number  of  readers  who  felt  that  they  had 
been  mistreated  by  some  advertiser  in  the  paper.  A  few  years  ago  we  in- 
serted the  advertisement  in  our  columns  of  a  Beaumont  oil  company.  At 
that  tune,  every  indication  was  that  this  company  would  be  enormously 
successful.  The  men  at  the  head  of  it  were  of  first-class  standing.  Yet 
the  conditions  in  the  oil  field  developed  so  that  the  concern  fizzled  out.  I 
personally  have  taken  up  from  my  readers,  and  paid  out  of  my  own  pocket, 
a  great  deal  of  the  stock  that  was  purchased  by  them  in  this  oil  company 
through  the  announcement  in  our  columns.     That  was  another  bond. 

All  of  these  people  felt  that  they  were  contributing  personally  to  the 
success  of  this  Magazine.  They  worked  for  it;  they  told  their  friends  about 
it.  They  sent  us  thousands  and  thousands  of  sul)scriptions.  They  knew 
that  I  started  with  nothing,  and  they  knew  that,  as  we  became  successful, 
they  shared  in  that  success  by  receiving  a  better  and  better  paper.  No  other 
form  of  human  industry  is  so  vitally  dependent  on  confidence  as  a  publica- 
tion, l^et  its  readers  lose  confidence  in  it  or  its  publishers,  and  it  is  dead. 
The  stronger  their  confidence,  the  more  powerful  it  becomes.  A  publication 
deals  in  human  thought.  This  is  its  only  form  of  merchandise.  It  has 
space  in  its  columns  to  sell,  nothing  more.  If  its  readers  lose  confidence 
that  space  is  valueless.  No  paper  can  trick  its  readers  and  live.  Whether 
it  does  so  directly  by  catch-penny  schemes  of  its  own,  or  permits  fraudulent 
and  tricky  advertisements  to  appear  in  its  columns,  makes  no  difference: 
the  result  is  the  same. 

world's  fair  guests. 

During  the  present  year,  the  great  World's  Fair  is  being  held  in  St. 
Louis.  Tens  of  thousands  of  our  readers  each  week  are  visiting  our  build- 
ing and  coming  into  personal  contact  with  this  institution.  They  find  it 
the  largest  and  most  beautiful  publishing  plant  in  the  world.  They  find 
the  best  citizens  of  St.  Louis  associated  with  it.  They  know  that  President 
Francis  of  the  World's  Fair  laid  its  cornerstone.  They  know  that  each  week 
parties  of  prominent  men  and  women  from  all  over  the  world  visit  us  to 
inspect  this  plant,  that  it  is  one  of  the  sights  of  the  city;  and,  furthermore, 
that  we  have  built  for  them,  on  the  eighty-five  acres  of  beautiful  grounds 
surrounding  the  building,  what  is  undoubtedly  one  of  the  most  complete 
and  costly  encampments  that  has  ever  been  constructed. 

This  great  dity  of  tents  cost  us  over  thirty  thousand  dollars.    Our  posi- 


THE  DREYFUS  CASE  OF  AMERICA  275 

tion  in  it  is  very  different  from  that  of  the  speculator  who  has  built  a  cheap 
hotel.  He  never  expects  to  see  or  hear  from  his  guests  again.  But  if  one 
of  our  readers  stopping  in  our  encampment  got  a  poor  cup  of  coffee,  we 
would  probably  hear  fi-om  it  each  time  she  renewed  her  subscription  for  the 
next  twenty  years. 

This  camp  is  a  perfect  little  city  of  homes.  It  is  under  the  strictest  mili- 
tary supervision.  It  has  accommodations  for  five  thousand  guests  at  one 
time.  Each  little  tent  has  its  electric  lights,  its  iron  beds,  its  board  floor 
and  every  convenience  and  comfort  of  a  great  hotel.  Shower  baths,  nursery 
tents,  hospital  tents,  recreation  tents,  a  military  band  and  everything  that 
we  can  devise,  have  been  installed  for  the  comfort  and  convenience  of  our 
guests.  Tliey  are  coming  here,  and  have  been  coming  here  for  months  past, 
feeling  that  they  are  our  personal  guests.  We  charge  them  fifty  cents  per 
day,  but  we  are  establishing  in  the  minds  and  in  the  homes  of  tens  of  thou- 
sands of  families  of  this  country,  a  personal  intimate  relation,  such  as  no 
publication  in  the  world  ever  had  or  will  get.  They  have  been  here  and 
have  seen  it.  The  publishing  plant  of  which  we  have  told  them  so  much, 
and  which  they  helped  to  build,  was  greater  and  grander  and  more  beau- 
tiful than  they  dreamed.  Everything  that  we  have  said  to  them  and  every- 
thing we  have  told  them  about  for  years  past,  they  find  to  be  so.  This  is 
being  radiated  back  into  the  remotest  corners  of  the  United  States  and 
Canada,  and  this  institution  is  gaining  a  grasp  on  the  minds  and  hearts  of 
two  millions  of  families  which  nothing  c;in  ever  shake.  The  result,  from  a 
business  point  of  view,  is  enormous  profit  to  the  concern. 

INFLUENCE    OF    THE     NEW    HOBIE. 

About  a  year  ago,  the  proposition  had  reached  a  point  where  I  felt  the 
necessity  of  associating  with  it,  a  large  body  of  men  of  such  standing  and 
caliber  as  to  give  it  the  proper  prestige,  not  only  with  its  readers,  but  in  the 
commercial  world.  To  the  mind  of  the  a\  erage  man,  the  fact  that  the  paper 
was  ten  cents  a  year  put  it  down  as  a  cheap  proposition.  Because  of  this, 
I  organized  the  Lewis  Publishing  Company  with  a  capital  of  one  million, 
two  hundred  thousand  dollars.  A  million  of  this  was  common  stock,  of 
which  I  hold  the  majority.  Two  hundred  thousand  dollars  of  it  was  pre- 
ferred stock,  which  retires  at  the  end  of  five  years.  This  two  hundred  thou- 
sand dollars  of  preferred  stock  was  ofi"ered  privately  to  the  foremost  citi- 
zens of  St.  Louis  and  Chicago.  They  expressed  their  confidence  in  my  abil- 
ity and  methods  by  subscribing  immediately.  I  do  not  think  that  any  single 
institution  in  America  has  associated  with  it  such  a  high-class  body  of  men 
as  the  Lewis  Publishing  Company  has  today.  I  then  built  our  present  plant. 
In  building  it,  I  designed  it  so  as  to  give  to  our  employees  every  convenience 
and  every  comfort  that  could  be  devised.  We  deal  in  human  thought  as 
our  merchandise.  There  is  no  such  thing  as  the  July  issue  of  the  Woman's 
Magazine  until  it  is  created  by  the  minds  of  those  connected  with  it.  If  I 
had  a  stock  of  hardware  or  dry  goods,  this  feature  would  not  enter  in. 

I  spent  over  one  hundred  thousand  dollars  in  the  decorations  on  the 
building.  It  is  today  the  most  beautiful  structure  in  America  and  one  of 
the  most  beautiful  in  the  world.  I  built  an  enormous  conservatory,  so  that 
during  the  winter  months  every  little  employee  could  have  a  nosegay  on 
her  desk.  We  try  to  make  them  all  feel  that  we  are  the  best  friends  that 
they  have  in  the  world.  We  try  to  mal:e  them  feel  that,  if  they  would  come 
to  us  honestly  and  fairly,  we  would  bear  their  burdens,  in  order  that  their 
minds  might  be  concentrated  only  on  the  work  in  hand.  The  merit  system 
was  put  in  force  throughout  the  entire  institution  so  that  the  little  girl, 
writing  wrappers,  might  be  thinking  about  her  spring  bonnet,  but  the  way 
she  could  get  it  was  by  detecting  errors  in  tlie  subscription  list.  For  each 
error  foimd  she  received  a  penny.  The  man  running  a  twenty  thousand 
dollar  printing  press  might,  throueh  misfortune,  become  financially  dis- 
tressed.   His  miiid  on  his  three  hundred  dollar  debt  might  cost  me  a  twenty 


276  THE  SIEGE  OF  UNIVERSITY  CITY 

thousand  dollar  press.  I  prefer  to  take  the  debt  myself,  on  the  basis  that  if 
he  is  a  white  man,  he  will  give  me  one  thousand  per  cent  interest  in  addi- 
tional efficiency  by  having  his  mind  relieved  of  his  own  troubles.  If  he  turns 
out  a  bad  dog,  I  will  collect  the  debt,  if  I  follow  him  across  the  river  Styx 
to  do  it. 

This  institution,  built  up  on  these  lines,  has  become  one  great  perfect 
machine  without  a  note  of  discord  in  it.  All  of  the  little  jealousies  that  usu- 
ally arise  in  such  an  institution  have  been  eliminated.  A  man  who  carries 
a  stop  watch  soon  finds  the  pace  too  swift  for  him.  I  would  today  consider 
this  great  industry  an  absolute  failure  without  the  love  and  confidence  of  its 
four  hundred  and  eighty  employees.  This  and  the  beautiful  building  are 
reflected  into  two  million  homes.  The  seventeen  thousand  dollar  stairway 
which  the  advertising  manager  climbs  to  his  office  each  morning,  impresses 
on  his  mind  the  standing  and  dignity  of  the  institution  and  enables  him  to 
turn  down  a  questionable  advertisement  with  easy  grace.  It  would  not 
match  the  staircase. 

Our  advertising  rate  is  the  highest  in  the  world.  Nearly  five  thousand 
dollars  for  a  single  page  for  a  single  issue,  or  sixty  thousand  dollars  for  a 
single  page  for  a  j^ear.  Yet  this  advertising  space  is  sold  for  a  year  in  ad- 
vance. There  are  at  the  present  time  over  a  million  dollars  of  advertising 
copy  and  orders  in  the  house  for  the  ensuing  twelve  months.  We  have 
means  of  knowing  just  how  profitable  to  the  advertiser  the  space  is,  and 
as  a  matter  of  business  we  keep  our  advertising  rate  reasonably  within  the 
profit  line.  We  have  raised  our  advertising  rate  from  one  dollar  and  twen- 
ty-five cents  a  line  to  six  dollars  a  line.  Instead  of  losing  business,  our 
space  is  sold  now  for  a  year  in  advance.  This  fall  Ave  shall  increase  the 
size  of  the  paper  to  thirty-two  pages,  and  give  our  readers  for  ten  cents  a 
year  such  a  publication  as  they  never  before  were  able  to  buy  for  less  than 
a  dollar.  The  effect  on  our  readers  and  on  the  publication's  franchises 
can  readily  be  grasped.  Never  again  will  any  publication  have  such  an 
opportunity  as  is  now  open  to  this  one.  They  cannot  hold  a  World's  Fair 
in  order  to  get  their  readers  into  their  establishment  and  bring  them  in 
personal  contact ;  and  if  they  could,  not  one  publication  in  a  thousand  knows 
who  its  readers  are. 

The  cheapness  in  price  of  this  paper  does  not  imply  a  cheapness  in  grade 
of  circulation.  Our  circulation  was  gained  originally  from  the  highest- 
priced  publications  in  existence.  We  state  as  a  fact,  and  not  a  theory — a 
fact  which  has  been  demonstrated  a  thousand  times  in  this  office — that  no 
publication  in  existence,  provided  it  has  a  large  general  circulation,  reaches 
a  better  class  of  people  on  the  average,  so  far  as  intelligence  and  respon- 
sibility and  wealth  are  concerned,  than  the  Woman's  Magazine. 

LEWIS  BEFORE  MADDEN. 

Lewis  refers  to  the  second  occasion  of  earnest  self-examination 
and  severe  analysis  as  to  his  motives  and  purposes  in  the  upbuild- 
ing of  the  Woman's  Magazine,  in  an  editorial  in  the  August,  1905, 
issue  from  which  the  following  is  excerpted: 

On  the  17th  of  last  month  the  publishers  of  this  Magazine  were  cited  to 
appear  at  Washington  and  show  cause  why  it  should  not  be  deprived  of  its 
second-class  privilege,  on  the  charge  that  it  was  published  at  a  "nominal 
rate"  and  "primarily  for  advertising."  I  went  in  person  to  make  my  de- 
fense of  this  little  magazine  which  we  have  tried  so  hard  to  make  carry  a 
little  more  sunshine,  instruction  and  entertainment  into  nearly  two  million 
homes.  Over  a  million  of  vou,  my  readers,  have  visited  the  great  plant 
which  was  built  for  the  production  of  this  magazine  at  the  lowest  possible 
price,  so  that  in  every  home  in  America  it  should  find  a  welcome.  We  shall 
see  what  we  shall  see.  My  defense  of  this  magazine,  before  the  Depart- 
ment, was  taken  down  in  shorthand,  and  I  expect  to  publish  it. 


^Hon.  David  R.  Fravxis,  cx-Corcrnor  of  Missouri,  laying  tlic  corner  stone  of  the 
Woman's  Magazine  Building  in  May  190^.  Mr.  Francis  was  at  this  time  president  of 
the  Louisiana  Purchase  Exposition   Company 

^Governor  of  Wyoming  and  his  staff.  This  party  called  at  the  office  of  the  Woman's 
Magazine,  while  in  St.  Louis  as  visitors  at  the  World's  Fair,  to  claim  a  prize  of  one 
hundred  dollars  offered  by  Lewis  to  anyone  who  could  name  a  postoffice  in  the  United 
States,  scrv.ng  fifty  families,  where  the  Woman's  Magazine  did  not  have  one  or  more 
subscribers.      This  incident  is  related  in  the  text 


Notable  giteslx  of  Mr.  Leivis  insf^ecting  the  grounds  and  plant  of  the  Lewis  Pub- 
lishing Comfany 

'^Lieutenant  General  Nelson  0.  Miles  on  the  occasion  of  his  review  of  Camp  Leivis  in 
KJ04.  'From  left  to  right,  Thomas  Z.  Higsden,  sometime  candidate  for  President  on  the 
Independence  League  ticket,  Mrs.  E.  G.  Lewis,  William  Randolph  Hearst,  Mrs.  Hearst, 
B.  G.  Lewis 


THE  DREYFUS  CASE  OF  AMERICA  279 

This  intention  was  never  carried  out.  Lewis'  defense  was  never 
published.  We  here  reproduce  its  substance,  anticipating  the  occas- 
ion on  which  it  was  delivered  only  to  enable  the  reader  to  form  a 
complete  conception  of  Lewis'  attitude  toward  his  past  achievements 
and  future  policies  as  publisher,  before  we  plunge  into  the  thick  of 
the  Siege.  It  must  not  be  supposed,  however,  that  what  is  here  pub- 
lished in  the  form  of  a  complete  address  was  actually  thus  spoken. 
The  words  and  sentences,  as  well  as  the  ideas,  are  those  of  Lewis. 
They  are  here  merely  thrown  together  in  orderly  arrangement  for 
the  sake  of  clarity,  and  for  the  ease  and  convenience  of  the  reader. 
Lewis  is  here  addressing  Third  Assistant  Postmaster-General  Mad- 
den, in  his  office  at  the  Postoffice  Building,  at  Washington.  He 
said. 

General  Madden,  you  will  remember  that  I  called  upon  you  soon  after  I 
founded  the  Winner.  I  told  you  then  about  my  plans  as  publisher  of  that 
paper.  I  stated  that  I  intended  to  publish  the  greatest  magazine  in 
America.  It  was  to  be  clean  and  honest.  It  was  to  be  a  straight  business 
proposition,  and  not  a  mere  advertising  sheet. 

1  came  into  a  iield  occupied  by  a  hundred  so-called  mail  order  papers 
sent  broadcast  over  the  land  with  little  or  no  pretense  of  a  legitimate  mail- 
ing list.  Their  subscriptions,  if  they  had  any,  were  procured  by  offering 
gold  watches,  or  a  house  and  lot  as  a  premium.  I  commenced  to  get  out 
a  clean,  well  printed,  carefully  edited,  honest  magazine.  These  men  came 
to  me  and  said,  "You  fool,  what  are  you  doing,  you  will  ruin  the  business. 
You  are  printing  your  magazine  on  high-grade  paper  with  fine  illustrations. 
You  are  editing  it  carefully.  You  will  go  broke,  and  put  us  all  out  of 
business." 

I  disregarded  their  advice  and  have  kept  steadily  on  my  policy  to  this 
hour.  It  has  proved  to  be  a  policy  of  constant  progression.  This  magazine 
stands  today  as  the  best  example  in  existence  of  what  the  second-class  law 
was  passed  for,  namely,  the  distribution  to  the  masses  of  the  people  of  good, 
clean  literature  at  a  low  price. 

We  are  not  only  realizing  the  spirit  of  that  law.  We  are  doing  more  to 
help  the  Postoffice  to  overcome  abuses  than  any  other  force  in  America. 
We  are  even  willing  to  come  out  and  agree  that  the  postage  rate  be  raised. 
We  want  it  increased,  provided  the  others  have  to  pay  it  too. 

THE    EDITORIAL    EXD. 

The  Woman's  Magazine,  now,  after  nearly  four  years,  visits  nearly  two 
million  homes  every  month.  They  know  it  and  love  it.  It  talks  to  them  in  a 
language  they  understand.  We  talk  to  them  heart  to  heart.  We  know 
how  they  think  and  feel.  I  will  tell  you  that  the  average  woman,  no  mat- 
ter whether  she  is  the  wife  of  a  millionaire  or  a  coalheaver,  is  a  woman 
just  the  same.  She  doesn't  care  to  read  about  the  Venezuelan  question  by 
Grover  Cleveland.  What  she  wants  to  know  is :  What  is  the  matter  with  the 
baby's  teeth?  The  Woman's  Magazine  is  published  for  the  purpose  of  tell- 
ing women  what  they  want  to  know.  Last  January  I  picked  up  one  of  the 
high-class  magazines  which  had  in  it  a  recipe  for  preserving  strawberries, 
which  grow  in  June.  Do  you  suppose  a  woman  will  keep  that  paper  from 
January  until  June  in  order  to  know  how  to  preserve  strawberries?  If  you 
pick  up  a  June  number  of  the  Woman's  Magazine,  you  will  find  the  straw- 
berry article  in  strawberry  time.  If  a  woman  goes  into  her  garden  in  June, 
and  finds  insects  on  the  roses,  she  doesn't  have  to  look  in  the  January  num- 
ber to  find  what  they  are,  and  how  to  kill  them.  She  finds  it  in  the  June 
number. 

We  edit  this  paper  carefully  for  our  class  of  readers.    If  there  is  a  cook- 


280  THE  SIEGE  OF  UNIVERSITY  CITY 

ing  recipe  to  be  printed,  we  do  not  print  it  as  it  stands,  with  high-priced 
spices  and  such  things  as  few  of  our  readers  can  obtain.  We  revise  it  care- 
fully and  use  ordinary  things  that  are  found  in  every  kitchen.  We  pay 
the  price  for  the  best  articles  suited  to  our  readers  that  v/e  can  obtain. 
We  employ  special  correspondents.  We  sent  one  of  them  to  the  President's 
inauguration,  and  later  to  the  inaugural  ball.  We  also  sent  along  our  own 
photographer  to  take  in  detail  views  of  the  families  of  the  ambassadors  of 
the  many  nations.  Then  we  told  the  story  in  our  own  words,  in  the  way 
that  our  two  million  leaders  would  appreciate  it.  What  they  wanted  to 
know  was  the  kind  of  dresses  that  the  ladies  wore,  especially  what  the 
President's  wife  liad  on. 

We  also  take  uj>  public  affairs.  I  have  arranged  with  Governor  Taft 
for  an  article  on  the  Philippines.  We  present  that  in  such  a  way  that 
two  million  people  throughout  the  country  who  do  not  read  metropolitan 
papers,  can  get  the  substance'  of  it.  This  Magazine  is  published  for  its 
readers.  It  tells  them  things  they  want  to  learn.  It  makes  life  a  little 
brighter  and  happier  for  them.  It  puts  sunshine  into  a  couple  of  million 
homes. 

I  will  tell  you  that  at  this  moment  there  are  more  people  reading  the 
Woman's  Magazine  than  all  of  the  high-class  magazines  put  together.  If 
you  will  talce  it  into  your  own  home,  and  lajr  it  beside  the  costly  publica- 
tions of  today  on  your  library  table,  the  women  of  your  familj'  will  perhaps 
take  up  the  high-class  magazine  and  glance  at  its  fancy  illustrations  a  little 
while.  Afterwards,  you  will  find  tliem  all  reading  the  Woman's  Magazine. 
Why  can  we  get  six  dollars  a  line  from  advertisers?  Because  this  Maga- 
zine is  published  for  its  readers,  and  the  readers  know  it.  Advertising  with 
us  is  of  secondary  consideration.  We  make  a  paper  that  the  people  want. 
That  is  why  we  get  subscribers.  AVe  laugh  at  the  problem  of  subscrip- 
tions.    We  have  them  by  the  million. 

Our  two  papers  together  go  to  nearly  tv/o  million  people.  The  families 
read  them,  too.  So  that  probably  five  million  people  see  these  two  papers. 
The  editor  of  the  Petit  Parisien  came  over  here  to  our  World's  Fair.  He 
spent  a  good  deal  of  his  time  in  the  Woman's  Magazine  Building  instead 
of  seeing  the  Fair.  "Why,"  said  he,  "this  institution  could  only  be  built  in 
America.  Here  is  the  most  typical  American  thing  I  have  seen  since  I  came 
to  tliis  country."    Such  men  know  what  this  paper  means. 

The  Woman's  Magazine  succeeded  the  Winner.  There  was  no  other 
change  except  in  name.  That  was  in  September,  1902.  When  the  circula- 
tion had  reached  a  point  sucli  that  all  idea  of  its  being  of  a  chimerical  or 
fictitious  nature  had  been  dismissed  from  the  minds  of  careful  and  conser- 
vative business  men,  1  organized  the  Lewis  Publishing  Company.  That 
was  in  June,  1903.  I  brought  into  that  company  as  original  subscribers, 
nearly  one  hundred  leading  business  men  and  bankers  of  St.  Louis.  They 
probably  represent  the  ownership  of  a  hundred  millions  of  the  vested  inter- 
ests of  that  city.  They  put  into  this  company  nearly  two  hundred  thousand 
dollars  cash.  We  then  built,  near  St.  Louis,  one  of  the  greatest  publishing 
plants  in  the  world.  Such  a  building  as  ours  alone  costs  nearly  half  a 
million,  an  immense  sum  of  money.  The  printing  machinery  cost  nearly  two 
hundred  thousand  more.  Our  own  vested  interest  is  now,  therefore,  up- 
wards of  a  million  dollars. 

This  is  entirely  dependent  on  the  publishing  of  these  two  papers.  The 
company  is  restricted  to  that  purpose  by  its  charter.  The  whole  plant  was 
designed  and  equipped  to  that  end.  It  can  be  used  for  nothing  else.  It 
stands  out  in  the  country  by  itself.  It  is  not  in  a  business  block  down- 
town, of  wliich  the  papers  occupy  the  basement  while  the  rest  of  the  build- 
ing is  rented  as  offices.  There  are  five  hundred  people  employed  in  the 
production  of  these  two  publications.  Our  earning  power  is  now  about  one 
million  dollars  a  year.  This  consists  of  about  one  hundred  and  fifty  thou- 
sand dollars  in  subscriptions,  and  the  rest  in  advertising.     I  also  bought 


THE  DREYFUS  CASE  OF  AMERICA  281 

eighty-five  acres  of  land  surrounding  the  site  of  the  building,  partly  for  the 
Publishing  Company  and  partly  for  an  investment.  I  had  to  buy  it  in  order 
to  get  the  corner  I  wanted  as  a  building  site.  Then  followed  the  homes 
in  which  we  and  our  employees  expect  to  live.  That  is  now  one  of  the 
hnest  residence  districts  in  St.  Louis. 

The  Woman's  Magazine  is  not  published  primarily  for  advertising;  nor 
is  it  sold  at  a  nominal  rate,  within  the  meaning  of  the  law,  any  more  than 
all  other  publications  are.  The  effect  of  taking  away  from  us  the  second- 
class  privilege  could  only  be  told  by  actual  demonstration.  It  would  de- 
pend upon  why  it  was  done.  If  it  was  taken  away  because  I  had  done 
M'rong  myself,  or  because  I  had  not  been  honest,  I  think  it  would  de- 
stroy the  magazine.  If  it  was  taken  away  for  any  other  reason,  I  do  not 
think  that  would  necessarily  happen.  The  loss  of  the  second-class  privi- 
lege might  make  it  unprofitable  to  the  stockholders,  it  might  cause  us  to 
discharge  some  of  our  force,  it  miglit  compel  us  to  reduce  the  paper  in  size 
and  quality.    I  can  not  tell  until  I  am  up  against  it. 

1  am  now  trying  to  give  my  readers  the  greatest  value  editorially,  and  in 
paper,  press  work,  and  illustrations,  that  I  possibly  can  and  pay  my 
stockholders  six  per  cent.  My  attitude  before  my  subscribers  has  always 
been  that  I  don't  care  personally  whether  I  have  anything  out  of  the 
Magazine  or  not.  I  have  enough  to  eat  and  drink,  and  an  automobile  which 
1  can  ride  in,  when  I  can  find  the  time  between  my  office  hours,  which  are 
usually  from  eight  o'clock  until  four  the  following  morning.  I  do  not  get 
time  to  eat.  I  would  get  out  the  magazine,  and  pay  full  first-class  post- 
age rates  until  the  last  dollar  I  had  was  exhausted,  if  I  had  to.  The  loss 
of  the  second-class  privilege  would  mean  the  payment  by  us  on  our  two 
publications  of  probably  half  a  million  a  year  more  than  all  other  publica- 
tions pay.    That  is  not  fair  competition. 

1  do  not  think  any  fair-minded  man  can  believe  that  the  Woman's  Maga- 
zine is  published  financially  for  the  promotion  of  my  other  schemes.  Ra- 
ther, it  is  the  other  way  about.  You  will  find  my  other  schemes  have  grown 
out  of  and  centre  around  the  magazine.  I  have  worked  hard  in  the  past 
to  earn  enough  money  to  carry  on  the  Woman's  Magazine.  Now  it  has 
reached  a  point  where  it  will  carry  itself.  Night  after  night,  for  five  years, 
1  liave  thought  over  it  until  today  the  Woman's  Magazine  is  more  to  me  than 
all  the  rest  of  the  world.  You  can  not  destroy  it.  The  grip  of  that  paper 
in  a  million  homes  in  America  was  never  equaled  since  publications  began. 
That  grip  has  been  gained  on  the  hearts  of  those  people.  We  have  given 
them  tine  thoughts,  and  they  believe  in  us.    No  one  can  shake  that  belief. 

THE    QUESTION    OF    NOMINAL    HATE. 

The  question  of  what  is  a  nominal  subscription  price  is  one  that  vitally 
affects  the  Woman's  Magazine.  The  Magazine  is  published  at  ten  cents  a 
year  for  twelve  copies,  less  than  one  cent  a  copy.  That  seems  nominal. 
But  what  was  nominal  a  few  years  ago  is  not  so  in  this  day  of  modern 
manufacturing  facilities.  A  few  years  ago  the  newspapers  sold  at  five  cents 
a  copy.  Now,  they  are  a  penny  apiece.  Magazines  were  formerly  thirty- 
five  cents  a  month.  When  Munsey  cut  his  price  to  ten  cents  a  copy,  the 
publishers  thought  Iiim  a  lunatic.  But  Munsey's,  under  the  progress  that 
has  been  made  in  printing  and  paper  making,  is  no  more  nominal  at  ten 
cents  today,  than  was  Harper's  Magazine  at  thirty-five  cents  five  or  ten 
years  ago. 

I  have  presses  and  machines  in  my  establishment  that  have  been  built  at 
a  cost  of  nearly  two  hundred  thousand  dollars,  especially  for  the  production 
of  the  magazine — machines  that  show  almost  human  intelligence.  They  can 
turn  out  two  hundred  thousand  copies  a  day,  v/hich  is  more  than  men  used 
to  print  in  a  hundred  days,  twenty-five  years  ago.  As  a  publisher,  I  am  able 
to  take  advantage  of  the  progress  in  the  production  of  machinery,  and  all 
other  things  that  go  into  the  making  of  the  paper.    Therefore,  I  can  sell  it 


282  THE  SIEGE  OF  UNIVERSITY  CITY 

at  ten  cents  a  rear,  and  make  a  profit.  Mind,  you  can  not  separate  the 
advertising  from  the  subscription  revenue.  You  can  not  take  a  newspaper 
or  magazine,  and  cut  it  in  half  and  say,  this  side  is  definite  revenue;  the 
other  is  not.  It  is  all  one.  You  must  put  the  two  sides  together.  You 
can  not  separate  subscriptions  and  advertising  in  any  publication,  if  it  is 
to  continue.  I  do  not  think  there  are  five  publications  in  America  that  could 
continue  without  their  advertising. 

Through  the  facilities  that  I  have  been  able  to  get  together,  I  have  been 
able  to  publisli  a  magazine  for  ten  cents  a  year.  As  a  straight  business 
proposition  it  is  more  profitable  at  that  rate  than  the  Ladies'  Home  Jour- 
nal for  the  same  circulation  at  one  dollar  a  year.  It  certainly  costs  them 
twenty  times  what  it  costs  me  to  print.  They  give  for  one  dollar,  sixty 
pages  printed  on  enamel  paper  in  colors;  but  they  do  not  even  get  the  dol- 
lar. They  sell  largely  through  news-agents  and  subscription  canvassers; 
and  through  such  sales  they  do  not  get  more  than  one-half  the  dollar.  I 
get  the  whole  ten  cents — with  the  exception  of  club  raisers,  to  whom  we 
allow  a  small  commission.  The  whole  ten  cents  in  most  cases  is  sent  direct 
to  our  office  by  mail  without  any  cost  of  collection. 

The  question  of  what  is  a  nominal  rate  is  thus  seen  to  be  one  of  propor- 
tion to  cost  of  production  and  sales,  while  advertising  revenue  depends 
upon  the  volimie  of  circulation.  What  woidd  have  been  nominal  a  few  years 
ago,  is  nominal  no  longer.  It  is  a  manufacturing  proposition.  That  is 
where  our  new  specially  equipped  plant  comes  in.  If  our  rate  is  too  low, 
tell  us,  and  we  will  alter  it.  Many  of  the  weekly  newspapers  sell  for  twen- 
ty-five cents  a  year,  and  give  fifty-two  copies.  That  is  one-half  cent  a  copy. 
We  get  a  cent  a  copy  for  the  Woman's  Magazine  and  the  same  for  the 
Woman's  Farm  Journal.  If  ten  cents  is  too  low,  we  will  make  it  twenty- 
five  cents.  I  will  present  the  fact  to  our  readers,  and  charge  higher.  At 
present  I  am  before  them  on  the  basis  that  I  am  willing  to  give  them  fifteen 
cents  a  year  out  of  my  own  profits.  If  I  am  not  allowed  to  do  this,  I  am 
quite  willing  to  take  the  other  fifteen  cents  myself. 

THE    TEN-CENTS-A-YEAR    PRICE. 

We  fixed  our  price  at  ten  cents  for  the  following  reasons: 

The  problem  of  securing  subscriptions  is  what  has  strewn  the  publishing 
world  with  wrecks.  It  is  one  of  the  hardest  things  in  the  world  to  get  sub- 
scription circulation  which  is  the  most  profitable  kind  for  advertisers.  The 
average  publisher  starts  a  magazine  and  tries  to  force  down  the  throats  of 
the  people  what  he  thinks  they  ouglit  to  read,  instead  of  giving  them  what 
they  know  they  want  to  read.  ]My  idea  was  to  offer  the  people  what  they 
want,  at  such  a  bargain  in  price  as  practically  to  eliminate  all  difficulty 
of  securing  subscriptions  and  all  cost  of  sale.  The  mere  fact  of  sending  the 
Woman's  Magazine  into  women's  homes  is  such  a  bargain  in  itself — and  you 
know  a  woman  dearly  loves  a  bargain — that  she  usually  sends  back  her  ten 
cents  witliout  more  urging.  All  friction  is  thus  taken  out  of  the  deal.  A 
woman  will  often  spend  eight  cents  to  register  her  ten  cents,  in  order  to  be 
sure  of  getting  the  Woman's  Magazine. 

Our  low  price  takes  us  out  of  the  stress  of  competition.  A  publication 
at  one  dollar  a  year  is  competing  with  a  great  number  of  rivals.  It  becomes 
a  problem  which  one  will  s])end  the  most  money  on  their  paper  to  get  the 
dollar.  One  comes  out  with  five  colors  on  the  cover.  The  other  one  then 
thinks  it  has  to  come  out  with  seven  colors.  They  print  on  hciwy  enamel 
paper,  use  costly  colored  inks,  and  pay  high-priced  artists  for  beautiful 
illustrations  to  attract  the  eye  of  the  buyer.  They  constantly  increase  their 
expense  in  every  way  to  get  business  away  from  their  rivals. 

Now,  by  reducing  the  price  to  ten  cents  a  year,  we  practically  eliminate 
all  that.  Ours  is  a  twenty-five  i)age  magazine  instead  of  sixty,  as  is  the 
Ladies'  Home  Journal.  It  is  printed  on  much  cheaper  paper  and  less  ex- 
pensively; but  for  ten  cents  it  is  a  greater  bargain.    There  can  be  no  ques- 


THE  DREYFUS  CASE  OF  AMERICA  283 

tion  about  that.  There  is  no  paper  a  woman  can  get  at  such  a  price  that 
is  so  full  of  good,  clean  reading,  and  of  editorial  comment.  We  give  the 
reader  the  benefit  of  the  bargain  in  price,  instead  of  spending  so  much  to 
merely  attract  the  eye.  We  have  practically  eliminated  the  cost  of  sale. 
We  have  cut  out  the  news-stand  sales  to  a  large  extent.  We  have  cut  out 
the  ex])ense  of  great  agency  organizations.  We  have  eliminated  all  those 
features  that  make  circulation  getting  such  a  difficult  problem.  The  ten 
cents  we  receive,  therefore,  is  really  greater  in  proportion  to  the  cost  of 
the  publication  than  the  fraction  of  the  dollar  the  high  priced  magazine 
receives  from  the  news  company,  or  any  other  source. 

HANDLING   THE   St'BSCRIPTION   LIST. 

The  way  we  increase  our  circulation  is  this:  We  advertise  the  Woman's 
Magazine  in  other  publications,  and  by  various  other  means.  We  have  built 
up  a  good  part  of  our  subscription  by  advertising  in  other  leading  publica- 
tions in  America,  and  telling  interesting  things  about  the  magazine.  We 
tell  the  prospective  subscribers  that  after  they  have  received  the  first  two 
copies,  if  they  would  rather  have  the  ten  cents  hack,  they  can  stop  the  maga- 
zine, and  we  will  return  the  money.  People  see  the  magazine  in  other  peo- 
ple's homes.  It  always  strikes  them  as  a  great  bargain.  That  is  another 
way  we   increase. 

Then  we  send  out  sample  copies.  We  secure  a  list  of  names  and  ad- 
dresses from  some  concern  like  the  Richardson  Silk  Company,  to  whom 
thousands  of  women  write  about  silks  and  the  like.  We  buy  the  names 
from  them,  and  check  them  up  to  eliminate  the  names  of  our  subscribers. 
We  then  send  them  sample  copies  about  three  times  a  year.  We  are  very 
careful  in  the  use  of  these  names,  because  they  are  valuable  to  us.  We  pay 
for  this  list  from  five  dollars  to  seven  dollars  per  thousand.  We  get  these 
names  from  every  leading  business  house  in  America.  People  who  would 
not  in  many  cases  sell  them  to  any  other  publisher  in  the  United  States 
will  sell  to  us.  They  knew  we  will  deal  with  them  honestly,  the  same  as 
we  deal  with  our  readers. 

We  have  never  sold  such  a  list  of  names,  or  let  any  one  have  them  after 
we  got  through  with  them.  We  mark  the  copies  sent  to  them  plainlr» 
•'Sample  Copy."  They  are  oftentimes  our  first  introduction  to  prospective 
readers.  The  houses  from  which  we  secure  these  names  are  among  the 
leading  advertisers  in  the  country.  Ther  may  or  may  not  be  advertising 
with  us.  There  is  no  connection  whatever.  We  never  give  advertising  in 
exchange  for  these  lists.  If  we  want  a  list,  we  ask  for  it,  and  pay  cash. 
If  the  advertiser  wants  to  buy  space,  he  pays  cash  to  us.  We  do  not  mix 
the  two.  We  procure  only  the  names  of  women  customers.  With  men  it  is 
different  from  women.  Not  once  out  of  a  thousand  times  will  a  man  sub- 
scribe for  a  paper,  even  if  he  has  been  intending  to  for  a  year.  But  a 
woman,  if  you  call  her  attention  to  a  new  paper  once  or  twice,  will  often 
send  in  her  money.  Our  subscribers  have  very  often  seen  the  magazine 
only  once.  Because  of  ail  this,  the  subscription  to  the  Woman's  Magazine 
is  steadily  growing.  We  have  offered  for  over  a  year  one  hundred  dollars 
to  any  one  who  can  name  a  single  town  or  postoffice  in  the  United  States 
where  we  have  no  subscriber.  No  one  has  received  the  prize.  The  governor 
of  Wyoming  and  his  staff,  when  they  were  here  at  the  World's  Fair,  thought 
they  had  got  hold  of  one,  and  came  over  to  get  the  prize.  They  named  a 
little  far-away  postoffice.  We  looked  it  up  and  found  that  we  had  one 
subscriber.  You  could  have  heard  them  laugh  a  mile  off.  The  town  was  a 
cross-roads  mining  village,  forty  miles  from  a  railroad.  It  consisted  of 
one  general  store,  kept  by  a  man  and  his  wife.  Y7e  had  the  man's  wife* 
on  our  list.  She  was  the  only  woman  in  the  town.  When  a  thing  grows 
to  such  proportions,  the  whole  people  become  interested.  We  are  putting 
our  paper  today  into  one  home  out  of  every  ten  in  the  whole  of  America. 

The  proportion  of  sample  copies  sent  during  the  year  is  determined  by  the 
law  on  the  subject.    The  number  sent  out  each  issue  is  determined  by  our 


284  THE  SIEGE  OF  UNIVERSITY  CITY 

guaranteed  advertisers.  We  guarantee  a  circulation  of  a  million  and  a 
half.  If  tlie~expiration  during  one  month  is  heavj-  and  the  renewals  light, 
we  send  out  more  sample  copies  to  maintain  that  circulation. 

HAXDI.INO    THE    StJBSCRIPTION    LIST. 

We  maintain  our  guaranteed  circulation,  not  only  on  our  expectation  of 
increase,  but  on  our  experience  of  what  tiie  average  growth  will  be.  We 
know  if  we  give  a  better  issue  each  month  than  the  month  before,  the  re- 
newals will  increase  in  proj^ortion.  Our  policy  is  to  always  give  the  very 
best  we  know,  and  the  greatest  value  we  possibly  can. 

With  such  a  vast  circulation,  tlie  mere  item  of  handling  the  subscription 
lists  is  a  very  large  expense.  The  mind  does  not  easily  understand  what 
is  meant  by  a  million.  It  takes  many  carloads  of  paper  and  tons  of  ink 
to  produce  each  issue.  The  mere  changing  of  addresses  requires  the  work 
of  eight  girls,  giving  all  th'eir  time.  A  mailuig  list  composed  of  women, 
is  much  more  difficult  to  handle  than  an  equal  list  of  men,  because  of  the 
single  item  of  changes  caused  by  marriage.  Then,  there  arc  changes  on 
account  of  removal,  death,  and  the  like.  All  these  items  cause  work  and 
cost  thousands  of  dollars. 

We  do  not  carry  a  subscriber  beyond  the  paid-in-advance  subscription 
period.  When  a  subscription  expires,  the  paper  is  wrapped  in  a  green  or 
blue  cover.  That  is  the  end  of  the  subscriber  unless  lie  renews.  When 
a  person  has  received  it  for  a  year  and  docs  not  renew,  it  is  because  she 
docs  not  want  it.  It  would  be  useless  to  try  to  get  her  to  read  it.  The 
woman  that  is  dead  or  won't  renew,  we  don't  want  on  the  list.  We  would 
rather  have  another  live  one.  The  process  of  eliminating  goes  on  all  along. 
There  are  always  new  ones  coming  in  who  like  the  paper,  stick  to  it,  and 
would  not  be  witliout  it.  These  far  exceed  the  number  who  drop  out  be- 
cause of  death  or  failure  to  renew. 

THE   ADVERTISING   POUCY. 

About  advertising.  If  you  look  at  our  magazine  month  after  month, 
you  will  find  we  have  largely  restricted  the  class  of  advertising,  until  today 
it  ranks  with  the  highest  priced  magazines.  I  have  just  picked  up  Printers' 
Ink  of  June  14,  1905,  the  publishers'  technical  journal.  It  has  an  article 
to  the  effect  that  the  Woman's  Magazine  is  considered  one  of  the  standard 
publications  of  America,  and  stands  almost  alone  in  guaranteeing  its  read- 
ers against  loss  from  fraud  in  advertising. 

We  have  set  such  a  standard  today  that  we  are  making  the  other  papers 
come  up  to  it.  We  don't  class  ourselves  with  the  mail  order  papers  or 
journals.  We  are  not  so  classed  by  the  advertising  fraternity.  We  rank 
with  the  Ladies'  Home  Journal  and  the  Woman's  Home  Companion.  That 
is  where  you  can  find  the  Woman's  Magazine  today. 

We  publish  in  every  issue  an  absolute  guarantee  to  subscribers.  If  any 
reader  of  this  magazine  is  defrauded  through  any  announcement  in  its  col- 
imins,  the  publisher  will  make  good  the  loss  in  cash.  This  announcement 
has  stood  for  four  years.  There  is  only  one  other  paper  in  the  country 
that  stands  with  us  in  this  respect — the  Farm  Journal  of  Philadelphia.  We 
have  followed  this  advertising  policy  to  such  an  extent  that  it  has  some- 
times crippled  me  financially.  We  will  not  insert  some  of  the  copy  that 
some  of  the  high-class  magazines  carry.  And  I  will  tell  you  that  no  news- 
paper could  live  if  the  rules  enforced  in  the  AVoman's  Magazine  were  ap- 
plied to  them.  Take  any  newspaper,  and  see  where  they  would  land  if  they 
guaranteed  their  subscribers,  and  agreed  to  make  good  any  loss  in  cash. 
They  can  not  do  that  and  live. 

This  policy  has  been  followed  by  us  from  start  to  finish.  As  we  grew 
stronger,  out  went  the  less  desirable  advertising  from  our  columns.  As  we 
grew  a  little  stronger,  out  went  more,  until  today  the  columns  of  the 
VVoman's  Magazine  will  compare  favorably  with  any  other  high-class  maga- 
zine in  America.  As  far  as  we  could,  we  have  eliminated  from  our  col- 
umns, not  only  objectionable  advertising  from  the  postofiBce  point  of  view, 


THE  DREYFUS  CASE  OF  AMERICA  285 

but  that  which  was  objectionable  from  our  own  point  of  view.  We  send 
out  a  circular  to  all  our  agents  and  prospective  advertisers  entitled,  "Ad- 
vertising We  Will  Not  Accept."  This  defines  our  position  very  clearly. 
We  require  that  all  copy  be  submitted  to  us  for  our  approval  before  it  is 
inserted.  We  also  require  to  see  the  copy  of  the  follow-up  literature  and 
printed  matter  which  advertisers  propose  to  send  to  the  public.  Then  we 
follow  the  matter  into  the  homes.  We  invite  our  readers  to  write  us  if  they 
have  any  complaint  to  oiler.  Our  readers  know  that  every  advertisement  is 
endorsed  by  our  guarantee,  and  that  if  any  one  is  defrauded,  the  publisher 
of  the  Woman's  Magazine  will  make  good  the  loss  in  cash. 

Our  last  restriction  was  to  cut  out  entirely  all  medical  advertising.  Some 
time  ago  1  received  a  check  from  the  Pinkham  Medical  Company  for  ten 
thousand  dollars.  I  stipulated  that  I  should  approve  the  copy,  and  required 
payment  in  advance  to  be  sure  I  had  the  right.  They  agreed.  A  year  later 
we  decided  to  cut  out  that  class  of  advertising,  and  I  refunded  them  over 
six  thousand  dollars.  I  venture  to  say  this  magazine  refuses  more  adver- 
tising in  a  year  than  any  other  in  America ;  and  on  higher  grounds.  In  fact, 
1  believe  we  turn  down  directly  and  indirectly  more  advertising  which  we 
might  have,  if  we  wanted  it,  tlian  we  accept.  An  example  is  that  of  Dr. 
Kurtz.  His  advertisement  appeared  in  our  columns  and  we  had  several 
complaints.  He  could  not  satisfy  us  that  he  honestly  fulfilled  his  contract 
with  the  people.  We,  therefore,  refused  business  from  Dr.  Kurtz,  amount- 
ing to  over  fifteen  thousand  dollars.  He  tried  through  every  agency  in  the 
country  to  force  his  business  in  our  columns,  but  we  refused  it  on  this 
basis  alone.  Lord  ^Sc  Thomas  of  Chicago,  one  of  the  greatest  agencies  in 
America,  sent  us  at  one  time,  an  order  for  four  full  pages  from  the  Cash 
Buyers'  Union,  amounting  to  over  sixteen  thousand  dollars.  We  refused  it 
on  the  basis  that  no  advertiser  coiild  use  the  magazine  as  a  business  cata- 
logue.   That  is  the  stand  we  have  taken  and  we  have  stood  by  it  honestly. 

You  must  not  suppose  that  I  did  not  need  that  sixteen  thousand.  It 
was  just  as  good  as  gold,  and  was  inserted  in  nearly  every  magazine  in 
America  to  the  extent  of  eight  and  twelve,  and  in  some  cases  even  fourteen 
pages.  We  would  not  accept  four,  nor  three,  nor  two.  We  held  them  to  a 
single  page  or  nothing.  I  needed  that  money,  but  it  conflicted  with  our 
advertising  policy.  It  is  such  things  that  go  to  make  a  good  paper.  For,  if 
a  paper  does  not  have  the  confidence  of  its  readers,  legitimate  advertising 
can  not  be  draw  n  into  it.  The  result  is,  we  are  getting  more  and  more  of 
good  advertising  every  issue.  One  advertising  agency  informs  us  that  its 
contracts  and  orders  for  the  Woman's  Magazine  and  Woman's  Farm  Jour- 
nal for  this  fall  and  winter  exceed  the  business  of  any  other  publication  in 
their  otKce.  That  tells  the  tale.  It  shows  this  paper  has  dealt  honestly  with 
the  people.  It  shows  they  want  the  paper,  and  that  when  they  get  it,  they 
will  read  it.     Otherwise,  space  in  it  would  be  worthless. 

The  purpose  of  advertising  in  the  Woman's  Magazine  is  to  enable  us  to 
publish  a  paper  for  the  masses  at  a  low  price.  The  benefit  of  the  advertise- 
ment goes  to  the  reader.  We  give  him  a  magazine,  such  as  he  could  not  get 
otherwise,  at  many  times  the  price.  He  gets  the  benefit  of  our  advertising 
revenue.  A  large  proportion  of  our  own  profits  has  also  been  spent  for 
the  benefit  of  our  readers.  For  instance,  we  took  care  of  eighty  thousand 
people  among  our  subscribers  who  came  to  St.  Louis  during  the  World's 
Fair  as  our  guests  in  a  great  encampment. 

The  proportion  devoted  to  the  text  as  compared  to  advertising,  varies 
considerably  during  the  year.  In  the  summer  months  the  reading  matter 
is  twice  that  of  the  heavy  winter  months.  In  the  crowded  winter  season  it 
will  run  half  and  half.  We  restrict  each  issue  by  departments.  We  never 
try  to  get  advertisements  on  those  pages  %vhich  are  of  greatest  interest. 
We  do  not  attempt  to  advertise  on  those  pages  at  all.  The  large  volume 
of  advertising  which  we  carry  should  not  be  regarded  as  a  reproach.  On 
the  contrary,  it  is  in  itself  the  best  evidence  that  the  papers  are  acceptable 


286  THE  SIEGE  OF  UNIVERSITY  CITY 

to  the  readers.  Advertisers  want  results.  But  these  come  onljr  if  the 
people  read  the  magazines  from  cover  to  cover,  see  in  its  columns  only  what 
Ihey  believe  in,  and  have  confidence  in  every  word  they  read. 

THE    SPIRIT   OF  THE    MAOAZIXE. 

When  the  second-class  law  was  passed,  by  which  periodicals  useful  to  the 
public  could  be  sent  through  the  mails  at  one  cent  a  pound,  great  emphasis 
was  laid  upon  the  intent  of  Congress  to  encourage  and  even  subsidize  (if  you 
care  to  call  it  so)  the  distribution  of  good  literature  to  the  masses  of  the 
people  at  a  low  price.  The  second-class  rate  was  not  intended  to  be  limited 
to  a  few  of  the  high-priced  magazines.  The  law  was  meant  to  apply  equally 
or  even  principally  to  the  low-priced  magazines.  I  have  brought  out  a  paper 
which  comes  Uie  nearest  to  representing  the  real  purpose  of  that  law  of  any 
l^ublication  in  America. 

The  Woman's  Magazine  is  clean,  honest,  well  printed,  carefully  edited, 
and  full  of  interesting  and  useful  matter.  The  rule  that  applies  from  the 
dome  of  our  establishment  to  the  cellar,  is  a  rule  that  stamps  it  as  an  honest 
paper.  We  have  one  desire:  To  comply  with  the  law.  We  have  one  wish:  To 
do  what  is  right.  We  are  trying  to  do  this  to  the  best  of  our  ability  and 
understanding.  WTienever  we  are  wrong  and  so  informed,  we  try  to  put 
the  matter  right. 

We  have  now  traced  the  evolution  of  the  Woman's  Magazine  from 
its  inception  as  the  "Winner"  to  the  pinnacle  of  its  fortunes.  We 
have  looked  at  it  through  the  eyes  of  its  founder.  We  have  seen  it 
presented  by  him  from  the  viewpoints  of  his  relation  with  his  read- 
ers upon  the  one  hand,  and  with  the  public  authorities  and  his 
brother  publishers  upon  the  otlier.  To  complete  the  picture,  it  needs 
only  that  we  should  view  the  whole  from  the  standpoint  of  the  com- 
munity which  was  the  scene  of  its  activity,  and  in  which  it  played 
so  conspicuous  a  part. 

THE  "double  spread"  IN  THE    ST.    LOUIS  REPUBLIC. 

During  the  World's  Fair,  bj'  arrangement  with  the  St.  Louis  Re- 
public, a  mammoth  illustrated  feature  article,  covering  two  full 
newspaper  pages — known  in  newspaper  parlance  as  a  "double 
spread" — was  devoted  to  Lewis  and  his  enterprises.  The  text  of 
this  article  may  be  taken  as  an  expression  of  Lewis'  own  views,  since 
there  is  internal  evidence  that  the  reporter  of  the  Republic  was  fur- 
nished information  by  Lewis  in  the  form  of  printed  literature  and 
through  personal  interviews.  The  appearance  of  such  an  article, 
however,  in  a  reputable  newspaper  is  equivalent  to  an  endorsement 
and  approval  of  its  contents.  Certainly,  it  is  conclusive  as  to  the 
general  state  of  public  sentiment  and  opinion  at  the  time.  For  no 
reputable  newspaper,  such  as  the  St.  Louis  Republic,  Avould  know- 
ingly liazard  the  good  opinion  of  its  readers.  The  Republic's  story 
may,  therefore,  be  fairly  regarded  as  a  summary  of  the  impressions 
of  the  citizens  of  St.  Louis  as  to  the  Woman's  Magazine  and  its 
founder  during  the  summer  of  the  World's  Fair  at  St.  Louis. 

This  marks  the  hey-day  of  Lewis'  prosperity.  This  was  the  pos- 
ture of  his  affairs  at  the  holidays  in  1904,  when  Howard  Nichols 
testified  that  the  contrast  between  his  own  abject  poverty  and  Lewis' 
good  fortune  impelled  him  to  turn  informer,  and  write  his  cele- 
brated letter  of  denunciation.     The  Republic  says: 


^ 


^Wives  of   the  Japanese   Commissioners  with   Mrs.   Lewis  and   friends 

''Japanese  Imperial  Commissioners  headed  by  Baron   Okuma,  with  cx-Governor  David 

R.    Francis  and  party    of  notable   St.    Louisans.     Guests  of   E.    G.    Lewis   at    luncheon 

in  the  IVomaji's  Magacine  Building,  November  iS,  igog 

^Chinese  Worlds  Fair  Commissioners,  guests  of  the  Lewis  Publishing  Company 


l)clcsat\on-<:   oj    -.viitcii's  (ir^auLuitwu!:,   quests   of   titc   Lczci.'i  J'ul'lishuig   Company 
'Daui;lttcrs  of  the  American    Confederacy     -Missouri  Federation    of    Women's    Clubs 
V.  E.   O.  Society 


THE  DREYFUS  CASE  OF  AMERICA  289 

On  the  night  of  April  30,  1904,  after  the  dedication  ceremonies  opening 
the  World's  Fair,  a  great  light  suddenly  burst  out  in  the  sky,  sweeping 
from  north  to  south  and  east  to  west  in  a  blazing,  blinding  beam  of  seven 
feet  in  diameter,  the  reflection  of  which  was  seen  as  far  away  as  Kansas 
City,  nearly  three  hundred  miles.  Everyone  in  St.  Louis  wondered  what  it 
could  be,  and  where  it  came  from.  It  seemed  to  start  from  a  high  point  in 
the  West  End  of  the  city;  and  only  a  few  of  the  initiated  knew  it  was  the 
great  searchlight  on  top  of  the  dome  of  the  Woman's  Magazine  building 
on  University  Heights.  Since  then  it  has  swept  the  sky  nightly.  This  light 
is  the  crowning  glory  of  the  most  beautiful  building  in  St.  Louis,  which  in 
turn  is  the  home  of  what  is  probably  the  most  wonderful  enterprise  in  the 
world.  The  light  itself  is  by  far  the  largest  and  most  powerful  searchlight 
in  the  world,  having  been  built  at  a  cost  of  twelve  thousand  dollars,  and 
requiring  nearly  a  year  to  construct.  It  marked  the  final  completion  of  a 
building  which  probably  has  few  equals  in  the  world,  and  which  is  a  source 
of  pride  to  St.  Louis  and  its  people,  not  alone  because  of  the  beauty  and 
magnificence  of  the  building  itself,  but  because  it  contains  an  enterprise 
known  all  over  the  world,  and  one  with  which  most  of  the  very  best  people 
of  our  city  are  now  identified  and  are  very  proud  of.  This  great  building  is 
open  to  visitors  day  and  night. 

ORIGIN   OF  THE    WOMAN's    MAGAZINE. 

Twenty  years  ago,  a  young  boy  of  fourteen  started  to  publish  a  paper. 
It  was  to  be  a  magazine  for  the  great  mass  of  the  people.  It  lived  a  week, 
(it  was  a  weekly).  It  cost  the  youth  his  billy  goat  and  several  other  valued 
assets,  but  it  went  into  honorable  liquidation  and  the  bills  were  paid.  The 
paper  died,  but  the  idea  lived  on  in  the  boy's  mind.  Three  years  in  college 
and  twelve  years  of  hard  work  in  the  endeavor  to  accumulate  enough  to 
start  that  paper  again,  and  start  it  right,  finally  resulted  through  misfor- 
tune in  his  arriving  at  about  where  he  had  started,  so  far  as  capital  was 
concerned;  but,  with  a  wide  and  general  fund  of  experience  in  business 
methods  and  finance,  and  the  idea  still  firmly  fixed  in  his  mind  of  publish- 
ing "the  greatest  magazine  the  world  ever  saw."  At  this  point  the  bull 
was  taken  by  the  horns,  and  the  magazine  launched  with  a  cash  capital  of 
one  dollar  and  twenty-five  cents  on  what  proved  to  be  the  most  remarkable 
career  any  publication  has  ever  had.  Today,  five  years  from  its  birth. 
The  Woman's  Magazine  has  a  paid  subscription  list  of  one  million,  six  hun- 
dred thousand  subscribers,  reaching  one  out  of  every  ten  homes  in  America, 
each  issue,  employs  five  hundred  people  in  its  production,  owns  the  finest 
and  largest  publishing  plant  in  the  world,  built  for  spot  cash  at  a  cost  of 
over  half  a  million  dollars ;  requires  fifteen  carloads  of  paper  to  produce  it 
and  eight  tons  of  printing  ink  to  print  it;  has  its  own  postofEce  and  mail 
cars;  pays  into  the  United  States  Postoffice  Department  a  quarter  of  a 
million  dollars  in  postage  per  year;  has  a  companion  magazine,  The  Woman's 
Farm  Journal,  with  a  circulation  of  six  hundred  thousand  copies  each  is- 
sue; reaches  every  postoffice  in  the  United  States  and  Canada;  receives  a 
daily  mail  of  from  ten  thousand  to  thirteen  thousand  letters;  earns  for  its 
publisher  over  a  quarter  million  dollars  per  annum,  net,  and  has  a  capital 
of  a  million  and  a  quarter  dollars. 

Yet,  the  subscription  price  of  this  magazine  is  ten  cents  per  year,  or  two 
dollars  for  life. 

It  all  sounds  like  a  fairy  tale,  but  there  in  the  West  End  of  St.  Louis,  in 
one  of  the  best  residence  districts,  stands  the  great  building,  surrounded  by 
eighty-five  acres  of  beautiful  grounds,  laid  out  into  a  grand  residence  park, 
in  which  the  officers  of  the  publication  are  building  their  homes  and  where 
"Camp  Lewis"'  has  suddenly  appeared,  with  its  thousand  snowy-white  tents, 
electric  lights,  and  all  the  comforts  of  home,  ready  to  care  for  the  thousands 
of  readers  of  the  Woman's  Magazine  and  Farm  Journal  who  shall  visit  our 
great  Exposition.  It  all  shows  what  a  man  can  do  if  he  will  only  go  at  it 
right,  do  it  right,  and  keep  at  it.    There  is  one  thing,  however,  that  is  not 


290  THE  SIEGE  OF  UNIVERSITY  CITY 

generally  understood,  which  has  caused  this  great  industry,  now  a  public 
enterprise  in  scope,  to  be  almost  unknown  to  the  people  of  St.  Louis,  its 
home.  By  a  curious  construction  of  the  postal  laws,  a  monthly  magazine 
cannot  circulate  in  the  city  in  which  it  is  published,  excepting  at  great  loss 
to  the  publishers,  as  the  postage  on  the  Woman's  Magazine  to  a  subscriber 
in  St.  I.ouis  would  be  just  sixteen  times  as  much  as  to  a  subscriber  in  the 
Philippine  Islands,  or  any  part  of  North  America. 

A     VISIT    TO    THE     OCTAOOX    TOWER. 

Forming,  as  it  does,  one  of  the  proudest  features  of  St.  Louis,  a  full 
knowledge  of  this  wonderful  establishment  should  be  had  by  every  St. 
JLouisian,  in  order  that  visiting  friends  from  a  distance  may  not  know  more 
about  the  largest  publication  in  the  world  than  the  people  in  its  own  city. 

Tailing  the  Delraar  Garden  car,  the  representative  of  the  Republic 
reached  the  entrance  grounds  of  the  great  octagonal  building,  which  stands 
on  a  high  hill  over-looking  the  World's  Fair,  and  which  is  now  a  landmark 
from  all  parts  of  the  West  End.  Beautiful  walks  lead  up  to  a  grand  en- 
trance, on  each  side  of  wliich  stand  enormous  carved  stone  lions  ten  feet 
in  height.  The  office  building  proper  is  octagonal  in  shape,  built  of  cut 
stone,  terra  cotta,  brick  and  steel,  eighty-five  feet  in  diameter  by  one  hun- 
dred and  thirty-five  feet  in  height,  and  crowned  by  an  immense  dome  of 
copper,  about  which  are  perched  sixteen  carved  Cupids,  each  ten  feet  high 
and  weighing  two  and  one-half  tons.  The  groimd  floor  is  open  like  the  in- 
terior of  a  great  bank,  and,  in  fact,  was  designed  for  a  great  bank,  which 
is  to  do  business  through  the  mails  exclusively  with  the  two  million  fami- 
lies which  read  the  magazine.  The  floor  is  in  mosaics,  and  about  the  grand 
central  staircase,  the  bank  fixtures,  of  marble,  hardwoods  and  bronze,  are 
grouped.  In  the  centre  of  this  floor  rises  what  is  probably  the  most  beau- 
tiful stair  in  America,  built  of  white  Italian  marble  and  bronze,  at  a  cost  of 
seventeen  thousand  dollars. 

On  the  second  floor  a  balcony  surrounds  the  central  stair  well,  upheld 
by  eight  great  marble  pillars.  This  balcony  is  faced  to  the  ceiling  with 
beautiful  marbles,  while  on  the  ceiling  itself  are  superb  mural  paintings 
by  one  of  the  foremost  artists  of  America.  About  this  balcony  are  the 
editorial  and  executive  offices,  finished  in  hardwoods  and  beautifully  deco- 
rated. At  the  head  of  the  stair  is  the  president's  office,  probably  the  most 
beautifully  furnished  office  in  the  city.  Behind  the  president's  desk  sits  a 
young  man  of  thirty-four,  slightly  gray  about  the  temples,  of  medium  height 
and  slender  build,  quick  and  active,  with  vitalltj'  and  force  in  every  move- 
ment, but  quiet  and  gentle  spoken.  This  is  E.  G.  Lewis,  the  creator  of 
The  Woman's  Magazine,  president  of  the  Lewis  Publishing  Company,  with 
a  million  and  a  quarter  dollars  capital;  of  the  University  Heights  Realty 
Company,  with  a  million  dollars  capital;  and  a  director  and  officer  in  sers'eral 
companies,  with  several  other  millions  capital.  He  is  the  same  person  who, 
twenty  years  ago,  sold  his  billy  goat  to  start  his  first  paper.  He  lives  in  a 
quiet  little  home  on  Euclid  avenue,  which  he  bought  on  the  installment  plan 
some  years  ago,  and,  so  far  as  I  can  learn,  has  one  chief  ambition,  to 
publish  "the  greatest  magazine  the  world  ever  saw,"  treat  everyone  honestly 
and  fairly,  make  his  employees  love  him,  and  spend  his  spare  moments  with 
his  wife,  who  is  also  the  second  vice-president  of  the  company.  He  says 
that  when  he  dies  he  wants  to  be  buried  right  under  the  centre  of  his  great 
domed  building,  and  that  he  carries  half  a  million  dollars  life  insurance,  so 
that  every  promise  and  pledge  made  in  life  may  be  carried  out  in  the  event 
of  his  sudden  death.  If  he  lives,  he  will  carry  them  out  himself,  for  that  is 
his  record.  No  man  in  St.  Louis  holds  more  firmly  the  confidence  of  the 
bankers  and  business  men  of  our  city.  No  other  corporation  or  enterprise 
ever  before  had  so  many  of  our  foremost  citizens,  bankers,  merchants  and 
professional  men  associated  with  it  as  has  the  Lev.is  Publishing  Company, 
making  one  case  at  least,  where  a  prophet  has  been  honored  in  his  own  city. 
It  is  related  of  Mr.  Lewis,  as  an  illustration  of  the  spirit  and  grit  that  has 


THE  DREYFUS  CASE  OF  AMERICA  291 

enabled  him  to  build  up  such  a  business,  that  in  the  days  of  the  earlj  strug- 
gles with  his  magazine  he  once  spent  five  consecutive  days  and  nights  on 
the  trains  between  Chicago  and  St.  Louis  in  order  to  protect  his  "promise  to 
pay"  a  certain  obligation,  rather  than  go  to  the  party  who  held  it  and  ask 
for  an  extension  of  time. 

Leaving  the  editorial  floor,  one  passes  up  to  the  third  floor,  on  which  are 
located  the  composing  room,  artists'  studio,  filingrooms,  where  the  millions 
of  letters  are  all  liept  carefully  filed  for  instant  reference;  the  mailing- 
room,  where  the  outgoing  correspondence  is  folded,  put  in  its  envelopes 
and  stamped  (for  even  this  simple  process  requires  the  work  of  twenty 
girls),  and  the  barbershop.  On  the  fourth  floor  is  located  the  great  sub- 
scription room,  where  one  hundred  and  eighty  young  women  care  for  the 
vast  detail  of  the  subscription  list,  numbering  over  two  million  subscrib- 
ers. Here  every  subscriber's  name  is  carefully  kept  in  cash  files,  and  eight 
young  ladies  occupy  all  their  time  in  making  the  changes  in  address  made 
necessary  each  day  by  the  moving  about  of  the  two  million  subscribers.  If 
one  family  out  of  a  thousand  moves  each  month,  this  means  two  thousand 
changes  to  be  made  each  month  in  the  subscription  files.  The  light  and 
ventilation  in  tliis  room  are  perfect,  and  every  possible  comfort  and  con- 
venience  is  provided. 

On  the  fifth  floor  a  grand  banquet  hall,  occupying  the  entire  floor,  is 
being  finished  off  with  a  domed  ceiling,  thirty  feet  in  height. 

THE    MAGAZIXE   PRESS   BUILDIXG. 

Ascending  to  tlie  observation  platform  at  the  top  of  the  great  dome, 
all  St.  Louis  can  be  seen  from  this,  by  far,  the  highest  building  in  the  city. 
Directly  to  the  east  the  finest  residence  district  of  the  city  reaches  almost 
to  the  corner  of  tlie  grounds,  while  to  the  south,  Washington  University 
and  the  World's  Fair  grounds  seem  so  close  one  could  almost  jump  off  into 
them.  Descending  to  tiie  basement,  one  passes  through  a  short  tunnel  into 
a  great  palmhouse  and  conservatory,  one  hundred  feet  in  width,  now  being 
filled  with  the  choicest  plants;  then,  down  a  stair  to  a  grand  balcony^  over- 
looking the  largest  and  most  complete  pressrooms  in  the  world,  two  hun- 
dred and  seventy-five  feet  in  length  by  one  hundred  feet  in  width. 

Here  visitors  can  sit  and  watch  tlie  wonderful  process  of  producing  two 
million  completely  printed  and  bound  copies  of  the  two  publications  owned 
by  the  company.  This  is  done  in  eight  days'  time  each  month.  On  one  side 
is  a  row  of  nine  great  presses.  On  the  other  are  eight  great  folding  and 
binding  machines.  Against  the  wall,  at  the  west,  are  the  massive  cutting 
machines,  which  trim  the  edges.  In  the  middle  stand  seven  Government 
mailcars  in  line  waiting  for  tlie  two  hundred  tons  of  magazines  that  go 
out  to  all  quarters  of  the  globe  each  issue.  Not  a  shaft  or  belt  is  in  sight. 
Each  machine  is  run  by  hidden  motors,  receiving  their  power  from  the  great 
noiseless  engines  at  the  far  end.  Throughout  both  buildings  every  con- 
venience and  comfort  for  the  employees  has  been  provided,  even  to  the 
piping  of  drinking  water  from  a  spring  half  a  mile  away,  so  as  to  flow  out 
in  little  marble  fountains  in  each  room. 

"It  is  not  generally  known,"  said  Mr.  Lewis,  "that  over  seventy-five  per 
cent  of  the  population  of  this  country  resides  in  the  small  towns,  villages  and 
rural  districts,  and  that  over  eighty  per  cent  of  the  wealth  of  this  country 
is  held  by  these  same  people.  There  are  today  hundreds  of  beautiful  maga- 
zines printed  for  and  sold  on  the  news-stands  of  the  great  cities,  but  they 
utterly  fail  to  reach  the  great  seventy-five  per  cent.  They  aim  at  the  high- 
est in  art,  presswork  and  illustration,  in  order  that  they  may  command  a 
ready  sale  in  competition  on  the  stands,  they  depending  on  catching  the  eye 
for  their  sale, 

"We  believed  that  a  carefuUy  edited,  well  printed,  well  illustrated  maga- 
zine at  a  low  price,  and  with  reading  matter  that  would  enter  into  the  daily 
lives  of  the  great  mass  of  women  would  catch  and  hold  their  hearts.    It  is 


292  THE  SIEGE  OF  UNIVERSITY  CITY 

not  what  the  price  of  the  magazine  is  that  really  counts.  The  woman  who 
writes  us  a  letter  enclosing  ten  cents  for  her  subscription,  and  then  regis- 
ters the  letter  at  a  cost  of  eight  cents,  is  sending  for  it  because  she  wants 
to  read  it.  We  try  first  of  all  to  give  our  readers  what  they  want  to  read, 
and  not  what  we  think  would  make  the  most  high-toned  paper.  A  pattern 
of  a  stock  collar  that  any  woman  could  make  out  of  a  handkerchief  comes 
nearer  bringing  results  than  an  illustration  of  a  superb  piece  of  fancy 
work  that  only  a  Japanese  artist  could  make. 

"It  must  be  a  relief  to  the  average  woman  who  has  gazed  at  the  illustra- 
tions of  Vanderbilt's  and  Astor's  homes  to  pick  up  the  Woman's  Magazine, 
get  back  to  earth  and  learn  how  she  can  take  a  common  drygoods  box  and 
make  a  dresser  for  the  servants'  room  out  of  it  at  a  cost  of  fifty  cents. 
Even  as  to  fiction,  we  have  all  copy  read  by  several  different  women  read- 
ers of  various  temperaments,  in  order  that  the  stories  they  select  may 
strike  the  general  average  of  womankind.  Our  guarantee  to  our  readers  to 
refund  to  them  any  loss  they  may  ever  sustain  by  answering  a  fraudulent 
advertisement  in  our  columns,  gives  confidence  in  our  advertisers;  and  we 
never  fool  our  readers  with  catch-penny  schemes. 

"I  would  rather  be  the  president  of  the  Woman's  Magazine,  and  hold 
the  trust  and  confidence  of  its  two  million  families  of  readers,  than  to  be 
the  President  of  the  United  States.  No  man  on  earth  could  sit  at  my  desk 
and  read  the  thousands  of  trusting,  encouraging  letters  that  I  do,  and  ever 
do  those  people  a  wilful  wrong.  To  tens  of  thousands  of  them  I,  as  the 
head  of  this  paper,  am  the  confidant  and  adviser  in  distress,  or  in  business 
matters  extending  outside  of  their  own  immediate  circles. 

"The  beauty  of  this  great  building  must  reflect  itself  into  the  contents 
of  the  magazine  and  the  lives  of  our  employees,  and  impress  on  each  that 
they  are  a  part  of  a  great  organization  dealing  in  and  creating  the  thoughts 
of  two  million  minds — an  organization  probably  more  powerful  for  good  or 
evil  than  any  other  single  enterprise  in  the  country.  The  mere  getting  of 
dollars  must  take  a  back  seat  in  the  face  of  such  a  condition.  I  have  no- 
ticed time  and  again  the  remarkable  broadening  out  of  the  views  of  life  held 
by  the  people  about  me,  as  they  grow  into  positions  of  responsibility  where 
they  come  in  contact  with  the  great  thought  force  of  these  two  millions 
of  minds. 

"It  cannot  be  understood  by  an  outsider;  when  mentioning  the  value  of 
such  a  franchise,  I  am  frequently  asked  how  much  our  types  and  presses 
are  worth !  They  and  this  great  building  are  but  the  smaller  details  visible 
to  the  eye,  of  a  power  that  is  growing  as  no  power  ever  grew  before,  by 
the  good  wishes,  confidence  and  co-operation  of  two  million  well-to-do  and 
intelligent  American  families." 

As  he  spoke  the  burning  of  passion  seemed  to  turn  the  modest  young  man 
into  the  great  galvanizing  battery  of  force  and  action  that  has  created  and 
drives  forward  the  largest  publication  in  the  world.  The  hard  struggle  in 
life  that  Mr.  Lewis  has  gone  through  seems  to  have  deeply  imbued  him  with 
a  desire  to  help  the  great  mass  of  people  of  moderate  means  who  seldom 
have  an  opportunity  to  help  themselves.  The  piling  up  of  a  great  fortune 
for  himself  does  not  figure  in  his  plans;  for,  as  he  says,  "I  can't  take  it 
with  me ;  but  I  can  take  the  love  and  respect  of  my  two  million  readers." 


^Single  day's  incoming  mail  of  the  Lewis  Publishing  Company   duni:^   ,.   ^-.uy  season 
"Average  daily  outgoing  mail  sacked  for  trajismission   to   the  St.   Louis  PostofHce 


SUBSCRIPTION  AORKEJOCOT . 

I  hurety  aubscribo  for  the  nunbor  of  shares  of  the  Blx(fi/^)  per 
cent  cmnulatlve  preferred  stock  of  "Die  Lewis  Publishing  Gonpany" . 
(a  corporation  to  be  formed)  which  are  set  opposite  ray  name  to  this 
subscription  agreement.   And  I  hereby  aRroe  to  pay  said  conpany 
tlierefor  one  Imndred  (.'flOO.OO)  dollars  per  share,  wlien,  and  as  called 
for  by  the  prop-^r  officers  of  said  c6mpany.    The  par  raluo  of  sal/i 
atock  Is  to  be  $100.00  (one  hundred  dollars)  per  share. 


/g>  •3>.  aaC.,,,,,^8-*      issL.-^ 


/Sao'' 


^ect  Jf^f  oMTZt       /^J/co^.      /^eo 


2,roo 


Photographic  reproduction  (greatly  reduced)  of  the  original  subscription  agreement 
for  the  preferred  stock  of  the  Lewis  Publishing  Company.  Lewis  personally  can- 
vassed the  representative  business  men  of  St.  Louis  at  the  organization  of  the  Lewis 
Publishing  Company  in  iqdj  and  secured  their  autograph  signatures  to  the  above  docu- 
ment. In  addition  to  a  large  number  of  representative  St.  Louis  bankers  and  business 
men,  this  list  includes  the  names  of  several  of  Lewis'  wealthy  out-of-town  backers. 
The  relations  of  these  various  persons  to  Lewis  and  his  enterprises  are  fully  developed 
in  the  accompanying  text 


CHAPTER  XIII. 

BANKING  BY  MAIL. 

The  Official  Prospectus — Origin  op  the  Bank — The  Mail 
Order  Business — Difficulty  of  Remitting  Small  Sums — 
Advantage  of  a  Mail  Bank — The  Letter  to  a  Million 
People — The  Public  Response — Lewis'  Own  Story — 
The  Question  of  Motive. 

The  Woman's  Magazine  was  the  mother  of  the  People's  United 
States  Bank,  Lewis'  most  renowned,  and  perhaps,  withal,  the  most 
potential  of  his  achievements.  No  one,  other  than  himself,  could 
portray  this  child  of  his  imagination  with  the  warm  and  vivid  color- 
ing in  which  it  glowed  before  the  eye  of  his  creative  fancy.  The 
conception  of  the  bank  has  been  often  traced  by  him  from  its  first 
germ — the  difficulty  experienced  by  his  customers  in  remitting  their 
dimes  to  the  Winner  and  the  Woman's  Magazine — to  its  full  fruition 
as  a  two  and  a  half  million  dollar  enterprise.  All  the  stages  of  this 
development  were  clearly  indicated  in  circular  letters,  prospectuses, 
and  articles  in  the  Woman's  Magazine.  Through  these  the  evolu- 
tion of  the  project  may  be  observed  and  studied. 

The  whole  conception  appears  to  have  taken  on  its  final  and 
definite  form  in  Lewis'  mind  during  the  summer  of  the  World's 
Fair.  The  great  concourse  of  people  gathered  as  sightseers  from  all 
over  the  world,  brought  to  the  Woman's  Magazine,  as  we  have  seen, 
an  extraordinary  number  of  its  readers.  Among  them  were  many 
bankers,  both  from  cities,  and  from  country  towns  and  rural  dis- 
tricts. All  had  been  acquainted  with  the  bank  project  through 
Le^v^s'  articles  in  the  Woman's  Magazine.  Many  had  been  in  cor- 
respondence with  him  on  the  subject.  Each  day  during  the  World's 
Fair,  therefore,  witnessed  a  constant  succession  of  interviews  be- 
tween Lewis  and  a  multitude  of  interested  callers.  So  incessant  in 
fact  became  these  demands  that  Lewis  was  compelled  to  arrange 
group  meetings,  and  deliver  his  views  in  an  address  followed  by 
informal  discussion.  Such  meetings  took  place  in  the  Woman's 
Magazine  Building  at  frequent  intervals  during  the  summer  of 
1904.  Lewis  was  also  called  upon  to  present  his  banking  project 
to  groups  of  bankers  and  other  interested  persons  in  Kansas  City, 
Chicago,  and  other  cities.  Representative  bankers  of  St.  Louis  were 
in  almost  constant  conference  with  him  on  the  subject. 

Lewis  felt  that  a  combination  of  circumstances  so  exceptional, 
could  only  happen  once  in  a  lifetime.  He,  therefore,  laid  aside  all 
other  work  as  much  as  possible  and  devoted  his  time  to  what  he  be- 
lieved to  be  the  solution  of  a  great  political  and  economic  problem. 

295 


296  THE  SIEGE  OF  UNIVERSITY  CITY 

Finally,  as  the  summer  drew  to  a  close,  the  full  orbed  conception  of 
the  People's  Bank  swam  dazzlingly  before  his  mental  vision.  In 
August,  1905,  after  a  series  of  earnest  conferences,  the  impulse 
seized  him  while  at  a  white  heat  of  creative  activity  to  project  the 
whole  scheme  on  paper,  and  thus,  once  for  all,  clarify  it  in  his  own 
mind,  and  lay  it  definitely  before  the  public.  From  early  morning, 
until  late  that  night,  without  any  break  except  for  luncheon,  he 
paced  back  and  forth  in  his  sanctum  at  the  head  of  the  grand  stair- 
way in  the  octagonal  tower,  dictating  continuously  in  vivid  word 
pictures  and  striking  imagery,  the  details  of  his  great  conception. 
Thus  the  subject-matter  of  his  principal  prospectus,  "Banking  by 
Mail,"  took  shape. 

Over  a  million  copies  of  the  large  pamphlet,  the  size  of  an  extra 
issue  of  the  Woman's  Magazine,  were  printed,  and  distributed 
among  his  readers.  Copies  were  mailed  to  every  bank  in  St.  Louis, 
with  a  request  to  investigate  the  project  and  offer  suggestions  which 
might  enable  the  proposed  institution  to  co-operate  helpfully  with 
the  local  banks.  Copies  were  also  mailed  to  all  other  banking  in- 
stitutions of  the  United  States.  This  prospectus  was  in  short  the 
instrument  used  by  Lewis  in  building  up  the  enormous  subscription 
list  to  the  stock  of  the  People's  Bank,  which  in  the  end  exceeded 
the  proposed  capitalization  of  five  million  dollars;  and  more  than 
one-half  of  which  was  actually  paid  in. 

The  text  of  this  pamphlet  thus  possesses  a  double  interest.  Not 
only  is  it  the  clearest  and  most  cogent  presentation  of  what  the 
People's  Bank  was  designed  to  be.  It  also  has  value  as  an  histori- 
cal document.  For  Lewis,  as  we  shall  see,  upon  his  defense  on  the 
charge  that  the  People's  Bank  was  organized  as  a  scheme  to  defraud, 
was  permitted  to  read  this  pamphlet  in  its  entirety  to  the  jury.  He 
was  not  only  acquitted,  but  he  aDeges  that  members  of  the  jury 
waited  upon  him  afterwards,  and  expressed  regret  that  they  had  not 
been  among  the  investors  of  the  bank. 

At  the  head  of  the  first  page  occurred  the  following  paragraphs 
in  boldfaced  Gothic  type,  under  the  caption,  "Introduction."  Par- 
ticular attention  has  been  directed  by  Lewis'  attorneys  to  the  fol- 
lowing sentence:  "It  is,  of  course,  understood  that  such  modifica- 
tions as  may  be  found  necessary  for  best  accomplishing  the  end 
desired,  will  be  made  under  the  advice  of  skilful  bankers,  but  the 
plan  as  outlined  here  is  essentially  the  one  I  intend  to  carry 
through."  Does  the  language  employed  here  and  throughout  this 
pamphlet  bear  the  ear-marks  of  conscious  fraud."*  Or,  is  it  simply 
the  mode  of  address  best  adapted  to  the  comprehension  of  the 
masses  to  whom  it  was  dispatched?  This  issue  is  raised  by  the 
charges  afterwards  made  that  the  People's  Bank  was  designed  by 
Lewis  as  a  fraudulent  scheme.  With  this  thought  kept  closely  in 
mind,  the  reader  will  be  in  a  position  to  appraise  for  himself  these 
official  utterances  of  Lewis  as  its  promoter. 


THE  DREYFUS  CASE  OF  AMERICA  297 

INTRODUCTIOK. 

In  the  following  pages  I  have  endeavored  to  give  a  clear  insight  into  the 
purpose,  plan  of  organization,  and  method  of  operation  of  the  proposed 
Mail  Bank.  First,  as  comparatively  few  could  have  much  knowledge  of  the 
inner  workings  of  a  great  magazine,  I  have  dealt  with  the  causes  that  lead 
up  to  my  undertaking  the  great  labor  of  such  an  organization.  It  is,  of 
course,  understood  that  such  modifications  as  may  be  found  necessary  for 
best  accomplishing  the  end  desired,  will  be  made  under  the  advice  of  skil- 
ful bankers,  but  the  plan  as  outlined  here  is  essentially  the  one  that  I  in- 
tend to  carry  through.  The  division  of  the  stock  into  one  dollar  parts  (one 
one-hundredth  of  a  share),  the  certified  check  system,  the  savings  accounts, 
the  re-deposit  system,  and  the  mail  remittance  system  are  all  details  of  a 
plan  whjch,  in  its  completeness,  will  mean  one  of  the  strongest,  most  re- 
sourceful, and  profitable  banking  institutions  in  America.  It  will  be  the 
PEOPLE'S  bank.  The  whole  plan  has  been  the  result  of  years  of  careful 
study  of  conditions  which  have  grown  up  in  this  country  unheeded  by  any 
bank. 

No  new  idea,  whfch  tends  to  alter  old  customs,  can  escape  adverse  criti- 
cism. Had  I  called  together  all  the  publishers  in  the  world  five  years  ago, 
and  asked  their  advice  about  publishing  a  ten-cent  per  year  magazine, 
hardly  one  would  have  encouraged  me.  In  the  plan  of  our  bank  I  have 
avoided  creating  new  and  untried  forms,  as  far  as  possible,  but  have 
adapted  the  usual  and  customary  forms,  such  as  the  certified  check,  to  the 
new  condition  of  things.  I  urgently  desire  the  fair  criticism  and  advice  of 
able  bankers  on  the  plan.  The  reception  of  my  idea  by  the  public  at  large 
has  been  such  as  to  establish  beyond  question  the  opportunities  that  are  open 
to  such  a  bank,  and  the  national  need  for  it.  Over  fifty  thousand  sub- 
scriptions to  the  capital  stock  have  already  been  sent  me,  of  which  over 
one  thousand  are  from  bankers  in  all  parts  of  the  country.  I  am  in  monthly 
contact  with  over  two  million  families,  and  have  already  established  an  or- 
ganization that  has  the  confidence  and  good-will  of  probably  ten  million 
people. 

The  great  mail  order  houses,  doing  hundreds  of  millions  of  dollars  of 
business  through  the  mails,  have  not  only  welcomed  my  plan,  but  many  of 
the  largest  of  them  have  offered  to  ad\  ise  fully  their  hundreds  of  thousands 
of  customers  about  our  bank,  and  to  urge  the  use  of  our  certified  check  sys- 
tem through  notices  kept  standing  in  their  merchandise  catalogues.  I  pre- 
dict the  highest  price  for  the  stock  of  the  People's  Mail  Bank  ever  reached 
by  any  bank  stock.  If  the  prosperity,  safety  and  convenience  of  hundreds 
of  thousands  of  homes  can  be  added  to.  even  a  little,  by  this  bank,  it  will 
stand  as  one  of  the  noblest  institutions  in  America. 

Immediately  beneath  this  resounding  introduction  occurred  the 
following  paragraph,  which,  in  both  style  and  substance,  forms  a 
good  example  of  the  mode  of  talking  to  his  readers  by  which  Lewis 
won  their  confidence,  but  which  is  challenged  by  his  critics  as  ob- 
viously bombastic  and  insincere. 

I  am  personally  investing  practically  every  dollar  I  have  in  the  stock  of 
this  bank.  The  very  life  of  my  great  publishing  business,  now  earning  over 
a  quarter  of  a  million  dollars  net  profit  per  year,  is  staked  on  this  propo- 
sition. For  if  the  bank  did  not  prove  the  success  I  predict,  I  would  lose 
the  confidence  of  my  two  million  readers.  So  I  have  more  at  stake  than  all 
the  other  stockholders  in  the  bank  combined.  My  great  magazine  is  dearer 
to  me  than  life  itself.  It  is  the  creature  of  my  brain,  and  has  been  reared 
in  the  ceaseless  labor,  night  and  day,  of  five  of  the  best  years  of  my  life. 
I  would  rather  be  president  of  The  Woman's  Magazine  and  The  People's 
Mail  Bank  than  President  of  the  United  States.  I  pledge  all  the  manhood 
and  strength  and  courage  there  is  in  me  to  The  People's  Mail  Bank, 


298  THE  SIEGE  OF  UNIVERSITY  CITY 

The  limitations  of  space  forbid  a  reproduction  of  the  whole  of 
this  prospectus.  What  follows,  therefore,  has  been  condensed  in 
Lewis'  own  words  and  with  fidelity  to  the  spirit  of  the  original,  but 
with  considerable  omissions.  The  net  effect  is  to  give  in  brief  com- 
pass the  substance  of  the  argument  and  appeal  by  which,  in  the 
course  of  a  few  months,  he  secured  subscriptions  in  excess  of  five 
million  dollars. 

ORIGIN    OF    THE    BANK. 

Early  in  the  life  of  tbe  Woman's  Magazine,  as  the  confidence  between 
the  reader  and  tfie  publisher  grew,  a  new  feature  developed.  I  began  to 
receive  sums  of  money,  some  of  them  very  large,  from  out-of-the-way  places, 
all  over  the  United  States  and  Canada.  These  I  was  asked  to  keep  until 
called  for,  because  the  sender  had  no  safe  place  to  put  them.  The  nearest 
bank  was  perhaps  twenty  or  thirty  miles  away.  The  owner  of  these  sums, 
ranging  from  a  few  hundred  to  several  thousand  dollars,  either  distrusted 
this  little  local  bank,  or  feared  that  others  would  know  too  much  about  his 
business.  Most  men  and  women  in  small  communities,  while  they  might 
otherwise  be  willing  to  do  business  with  local  banks,  do  not  want  their 
friends  and  neighbors  to  know  how  much  they  have,  nor  where  it  is  de- 
posited. This  feature  is  developed  to  the  extreme  in  the  remote  rural  dis- 
tricts. Most  savings  accounts  are  from  women,  but  the  average  woman  does 
not  want  even  her  own  family  to  know  much  about  her  finances. 

I  became  in  time  the  centre  of  the  confidence  of  a  million  people.  They 
would  send  me  a  map  of  their  yard,  showing  me  where  they  had  buried  their 
money,  saying  how  much  it  was,  and  telling  me  what  to  do  in  case  of  their 
death.  They  would  write  that  outside  their  own  circle  of  friends  there  was 
no  other  man  in  whom  they  could  trust.  This  feature  grew  almost  as  rapidly 
as  the  paper  itself.  At  one  time  I  had  almost  a  quarter  of  a  million  dollars 
of  this  sort.  It  became  necessary  to  originate  some  system  of  handling 
this  money,  and  some  form  to  limit  my  responsibility.  The  people  did  not 
want  to  spend  their  money.  They  wanted  to  know  that  it  was  safe,  and 
that  they  could  get  it  in  time  of  distress.  In  the  meantime,  my  reflection 
on  the  thoughts  of  a  million  souls  had  developed  in  my  mind  the  idea  of 
the  People's  Bank  into  what,  I  think,  will  be  one  of  the  grandest  institu- 
tions in  America. 

About  this  time  I  organized  the  Lewis  Publishing  Company  with  a  capital 
of  one  million,  two  hundred  thousand  dollars.  The  two  hundred  thousand 
dollars  is  in  preferred  stock  retiring  at  the  end  of  five  years.  This  was 
taken  privately  by  the  foremost  citizens  of  St.  Louis.  I  spent  over  a  hun- 
dred thousand  dollars  in  the  decorations  of  the  buildings.  It  is  today  the 
most  beautiful  publishing  plant  in  America.  The  institution  of  the  Lewis 
Publishing  Company  became  a  perfect  machine  working  without  discord. 
I  enjoyed  the  love  and  confidence  of  its  four  hundred  and  eighty-odd  em- 
ployees. This  beautiful  life  and  the  atmosphere  created  by  these  beautiful 
buildings,  were  reflected  into  a  million  homes.  I  had  a  staff  of  people  in 
intimate  contact,  by  means  of  letters  and  through  the  magazine,  with  all 
this  scattered  mass  of  people.  We  gave  advice  and  help  to  the  country 
people,  and  shared  their  hopes  and  fears.  One  thing  that  struck  me  after 
the  magazine  had  become  successful,  was  the  fact  that  while  eighty  per 
cent  of  the  wealth  of  the  Nation  was  held  by  the  people  in  the  rural  dis- 
tricts, yet  those  people  had  no  great  central  banking  institution  with  which 
they  could  deal.  They  had  no  one  to  whom  they  could  refer  for  informa- 
tion and  advice  on  their  investments.  There  is  no  way  for  the  man  forty 
miles  back  in  the  woods  to  know  which  business  concern  is  honest  and 
which  is  not.  He  has  no  one  to  advise  him,  in  whom  he  has  confidence,  or 
who  is  competent  to  do  so.    He  naturally  turns  to  the  editor  of  his  monthly 


THE  DREYFUS  CASE  OF  AMERICA  299 

magazine.    The  relations  of  a  publisher  with  his  readers  are,  therefore,  in 
many  respects  similar  to  those  of  a  father  with  his  family. 

THE    MAIL    ORDER    BUSIKESS. 

Another  point  was  the  large  increase  of  mail  orders,  and  the  lack  of  easy 
means  of  payment.  In  the  past  eighteen  years  there  has  grown  up  in  this 
country  what  is  known  as  the  mail  order  business.  This  consists  of  great 
general  and  specialized  merchandizing  houses,  located  in  the  large  cities, 
but  dealing  with  hundreds  of  thousands  of  people  located  in  the  rural  dis- 
tricts, through  the  mail,  for  the  purchase  of  all  the  comforts  and  necessities 
and  luxuries  of  life. 

The  nearest  store  keeps  canned  goods,  calico,  rubber  boots  and  similaK 
staples;  but,  if  the  people  want  comforts  and  luxuries  they  must  get  these 
from  the  mail  order  houses.  These  send  out  large  illustrated  catalogues, 
and  not  being  under  the  necessity  of  maintaining  great  establishments  on 
the  prominent  thoroughfares,  are  able  to  sell  to  the  people  in  the  country  at 
closer  prices  than  even  the  people  in  the  city  can  obtain.  These  mail  order 
houses,  dealing  with  hundreds  of  thousands  of  customers,  often  take  the 
entire  output  of  great  factories.  They  can  thus  supply  each  of  their  cus- 
tomers at  lower  cost  than  if  he  lived  in  the  biggest  city.  So  great  has  this 
business  become  that  two  houses  alone — Sears,  Roebuck  &  Co.,  and  Mont- 
gomery, Ward  &  Co.,  both  of  Chicago — last  year  did  over  fifty  millions 
of  dollars'  worth  of  business  through  the  mail.  The  total,  in  1903,  exceeded 
one  billion  dollars  in  this  country  alone.  Every  dollar  of  this  was  sent 
through  the  mail.  And  yet  in  this  country,  today,  there  is  no  form  of  postal 
remittance  that  is  either  convenient  or  safe.  No  bank  has  grown  into  ex- 
istence that  cares  for  this  class  of  business.  The  presidents  of  the  usual 
banks  do  not  know  much  about  the  mail  order  business,  and  yet  it  amounts 
in  all  to  hundreds  of  millions  of  dollars  a  year. 

DIFFICULTY  OF  REJIITTING  SMALL  SUMS. 

The  remittance  of  small  amounts  by  mail  is  not  easy.  If,  tonight,  I  de- 
sire to  remit  six  dollars  and  a  half  to  a  concern  in  New  York,  although  I 
am  living  in  the  fourth  largest  city  in  the  United  States,  I  should  have 
to  go  downtown  and  buy  a  postoffice  money  order  or  a  certified  check. 
Think  of  the  man  or  woman  who  would  have  to  go  forty  miles  through 
woods  to  his  postoffice,  perhaps  through  a  snow  storm,  to  get  a  postoffice 
order  to  pay  for  some  goods  he  might  wish  to  order  through  the  mail.  One 
of  the  greatest  difficulties  of  the  mail  order  merchants  is  this  very  thing. 
They  receive  tens  of  thousands  of  dollars'  worth  of  postage  stamps.  They 
receive  also  great  sums  in  currency.  The  loss  of  currency  through  the  mail 
is  an  enormous  item.  They  receive  also  thousands  of  letters  in  which  the 
writer  says  she  will  send  an  order  for  goods  on  Saturday  when  her  husband 
goes  to  town  so  that  he  can  buy  a  postoffice  or  express  money  order.  All 
these  letters  would  be  saved  if  there  were  any  convenient  means  of  sending 
small  amounts  of  money.  Seventy  per  cent  of  the  postoffices  of  this  country 
do  not  issue  money  orders  at  all,  yet  nearly  eighty  per  cent  of  the  wealth 
is  held  by  the  people  in  these  rural  districts.  This  money  is  not  in  any  bank. 
Further,  there  is  no  "bahk  yet  in  existence  that  can  get  it.  If  a  great  bank 
of  Chicago  or  New  York  attempted  to  get  this  saved-up  money,  they  would 
have  no  knowledge  or  training  that  would  fit  them  for  dealing  with  these 
people.  The  banks  could  not  handle  the  business.  The  rural  people  never 
heard  of  these  banks.  Even  should  the  banks  get  it,  they  could  not  hold 
the  connection  unless  the  depositors  heard  from  them  at  regular  intervals. 
If  the  depositors  did  not  hear  from  them  every  month  or  two,  they  would 
be  inclined  to  draw  out  their  money.  No  bank  with  a  hundred  thousand 
depositors  could  write  a  letter  every  week  or  month  to  all  its  customers. 
There  must  be  some  medium  of  constant  communication.  This  medium  is 
provided  by  a  great  publication  such  as  a  monthly  magazine. 


300  THE  SIEGE  OF  UNIVERSITY  CITY 

Tiien  the  gretit  banks  open  at  nine  and  close  at  three.  The  woman  who 
wants  to  deposit  ten  dollars  must  lose  a  morning  and  spend  the  interest  of 
a  year  in  carfare  going  to  and  fro.  When  she  reaches  the  bank  the  man 
beside  her  wants  to  deposit  ten  thousand  dollars.  The  clerk  impatiently 
takes  her  book,  enters  her  ten  dollars,  and  thrusts  it  back  at  her.  She 
takes  a  look  at  the  marble  pillars,  thinks  how  poor  and  mean  she  is,  and 
goes  out  feeling  embarrassed  and  even  ashamed.  Under  the  mail  order 
system  she  deposits  her  money  through  her  local  postoffice,  unknown  to  any 
one,  and  by  return  mail  her  book  comes  with  a  letter  from  the  president 
of  the  bank  thanking  her  for  her  deposit,  and  telling  her  she  Is  one  of 
the  people  who  are  adding  to  the  prosperity  of  the  Nation. 

ADVANTAGE  OF  A  MAIL  BANK. 

Then,  too,  no  great  bank  with  its  present  organization  could  handle  over 
its  counters  the  accounts  of  hundreds  of  thousands  of  people  from  the 
country,  each  account  so  small,  in  itself,  as  hardly  to  be  worth  the  having. 
They  would  require  hundreds  of  paying  and  receiving  tellers,  and  a  bank- 
ing liall  covering  several  blocks.  The  mere  process  of  handling  these  small 
sums  of  money  would  eat  them  up  in  expenses. 

Further,  every  city  bank  that  attempts  to  take  small  accounts  is  subject 
to  the  danger  of  a  run.  The  greater  the  number  of  small  accounts  the 
greater  is  this  peril.  The  man  with  a  hundred  thousand  dollars  is  not  going 
to  shind  all  day  at  the  bank  and  increase  the  panic.  But  the  woman  with 
ten  dollars  in  it.  which  is  her  all,  will  not  only  do  so,  but  will  bring  other 
frightened  women  of  the  neighborhood.  Let  but  a  woman  faint  in  front 
of  a  bank,  and  let  a  crowd  collect,  and  she  be  carried  in,  and  by  nightfall 
that  bank  may  have  a  nm  on  it.  That  means  a  thousand  people  at  its  win- 
dows. Then  any  statement  by  one,  no  matter  how  absurd,  is  echoed  to  the 
other  nine  hundred  and  ninety-nine.  The  next  thing  is  a  long  notice  in  the 
evening  papers.  A  panic  is  only  made  when  a  whole  crowd  gets  fright- 
ened. Now,  by  a  mail  banking  system,  such  a  condition  is  a  physical  im- 
possibility. One  man  cannot  communicate  his  fright  to  another.  There 
might  be  a  "run"  from  ten  thousand  people,  and  no  one  would  know  of  it. 
The  bank  could  take  its  time  and  meet  it  by  drawing  gradually  on  its  re- 
sources. 

Such  a  bank  could  do  business  with  the  whole  country.  It  would  be 
equally  accessible  to  the  man  in  the  logging  camp,  and  the  woman  in  the 
tenement.  Its  accounts,  small  in  themselves,  in  the  aggregate  would  be 
enormous.  The  postal  bank  of  England  has  two  hundred  seventy-four  mil- 
lions of  dollars  in  deposits.  The  Bank  of  England  has  borrowed  from  this 
postal  bank  from  time  to  time  over  seven  hundred  million  dollars.  Yet, 
its  average  account  is  only  fourteen  dollars.  The  Bank  of  France  has  three 
hundred  millions  in  deposits,  yet  its  average  account  is  but  thirty  dollars. 

Such  a  bank  in  time  of  stress  would  be  a  great  equalizing  force.  In  case 
of  a  national  panic,  the  little  local  banks  are  the  first  to  feel  it.  The 
depositors  wonder  how  their  president  stands,  and  quietly  begin  to  with- 
draw their  money,  and  hide  it  in  socks  and  pots.  This  is  no  reflection  on 
the  local  banks.  They  are  a  part  of  the  backbone  of  the  financial  system. 
But  the  rural  people  cannot  trust  their  local  banks  as  they  could  a  great 
central  institution.  This  bank  of  ours  will  not  interfere  with  the  local 
banks.  Rather  will  it  be  a  source  of  strength  in  times  of  panic,  through 
ts  ability  to  supply  funds  at  reasonable  rates,  and  on  long  time  and  good 
security.  We  will  use  the  local  banks  as  agents  in  placing  bond  issues.  Our 
certified  checks  will  provide  for  them  a  profitable  form  of  exchange. 

WOULD  BRING   HOARDINGS  INTO   CIRCULATION. 

There  is  not  today  in  this  country  any  great  banking  institution  with 
enormous  capital  and  resources  in  which  the  people  of  the  country  feel 
confidence,  and  to  wliich  they  will  send  their  money.  Let  such  an  institution 
be  once  started,  and  it  would  be  the  recipient  of  enormous  sums  of  the 
savings  and  hoardings   of  the  moderately  well-to-do.     It  could  put  this 


THE  DREYFUS  CASE  OF  AMERICA  301 

money  back  into  circulation  and  substitute  certificates  of  deposit  in  the 
socks  and  old  pots,  instead  of  actual  currency. 

More  money  is  saved  up  to  put  into  the  banks  than  they  ever  receive. 
Probably  only  one-third  of  the  total  currency  is  in  the  banks.  Allow  one- 
third  as  being  in  circulation.  The  remaining  one-third  of  this  country's 
money  is  hidden  in  socks,  pots,  drawers  and  fireplaces.  Most  of  the  money 
that  this  mail  bank  that  I  am  organizing  will  get,  is  not  today  in  any 
other  bank.  No  other  bank  can  get  it.  It  is  the  one-third,  hidden  away 
and  withdrawn  from  circulation,  that  I  am  after;  and  no  other  institution 
in  America  besides  this  one  is  so  situated  as  to  be  able  to  draw  it  out.  I 
am  not  speaking  on  theory,  but  on  actual  existing  conditions. 

1  first  began  presenting  the  features  of  this  mail  bank  to  my  readers 
in  a  circular  letter  under  a  one-cent  stamp.  What  was  the  result?  Over 
forty  thousand  of  them  immediatel)^  sent  in  their  subscription  to  its  capital 
stock.  These  forty  thousand,  according  to  their  letters,  were  ready  to 
deposit  an  average  of  three  hundred  dollars  each.  This  means  that  practi- 
cally twelve  million  dollars,  or  two  and  a  half  times  the  proposed  capital 
of  the  bank,  is  at  this  moment  waiting  and  available  as  deposits. 

I  believe  that  a  great  bank,  owned  by  the  people,  paying  its  earnings 
to  the  people,  standing  like  the  rock  of  Gibraltar  between  the  people  and 
the  unscrupulous  stock  speculators  and  swindling  schemers  who  hold  out 
hopes  of  sudden  riches;  a  bank,  with  a  hundred  thousand  families  ov.ning 
stock  purchased  at  par;  a  bank,  with  half  a  million  small  depositors;  a 
bank,  which  no  man  or  clique  of  men  could  ever  gain  control  of  for  their 
private  ends;  a  bank  that  was  so  far  from  the  control  of  any  body  of 
wealthy  speculators,  so  fearless  and  so  strong  that  it  would  stand  as  coun- 
sellor and  advisor  for  the  vast  number  of  people  who,  having  now  no  such 
institution,  are  taken  in  and  defrauded  in  a  thousand  schemes,  would  be- 
come the  most  powerful  financial  organization  in  the  world.  Such  a  bank 
must  be  equally  accessible  to  the  man  or  woman  a  thousand  miles  away  as 
to  the  one  near  by.    It  must  transact  its  business  through  the  mail. 

A    LETTER    TO   A    MILLION    PEOPLE. 

The  nature  and  substance  of  Le'vis'  appeal  to  his  readers  will  be 
more  clearly  grasped  if  we  insert  at  this  point  a  copy  of  his  first 
circular  letter  on  the  bank.  He  sent  out  more  than  a  million  of 
these  to  his  readers  on  the  letterhead  of  The  Lewis  Publishing  Com- 
pany during  April  and  May  of  lOOi.  With  this  letter  the  practical 
organization  of  the  bank  may  be  said  to  have  begun.  It  must  be 
remembered  that  this  is  a  part  of  the  "literature"  on  which  the 
charges  of  fraud  by  the  postoffice  are  based. 

About  four  years  ago,  I  started  the  Woman's  Magazine  with  a  few 
hundred  dollars  capital.  It  is  today  the  largest  magazine  in  the  world,  hav- 
ing a  million  and  a  half  subscribers.  It  employs  three  hundred  people,  does 
a  business  of  a  million  dollars  a  year  and  is  earning  for  its  stockholders 
a  profit  of  over  a  quarter  of  a  million  dollars  a  year.  Most  of  the  foremost 
bankers  and  business  men  in  St.  Louis  are  interested  in  it  now.  Had  you 
come  in  with  me  four  years  ago  at  the  start,  with  only  five  dollars,  you 
would  today  be  worth  five  thousand  and  have  an  income  of  one  thousand 
dollars  a  year.  This  v/onderful  growth  has  been  due  to  one  fact — the  co-ope- 
ration and  assistance  of  a  vast  number  of  people,  each  contributing  ten 
cents  a  year,  yet  all  combined,  making  an  enormous  sum  of  money. 

I  am  about  to  undertake  a  new  enterprise  which  I  have  been  studying 
over  for  a  number  of  years.  As  you  know,  the  great  banks  and  trust  com- 
panies of  this  country,  with  their  millions  of  dollars  of  surplus  profits  and 
their  enormous  dividends  paid  to  their  stockholders  each  year,  are  owned 
and  controlled  by  a  few  wealthy  men.  These  banks,  with  their  great  de- 
posits, have  become  an  enormous  power  in  this  country,  enabling  those  at 


302  THE  SIEGE  OF  UNIVERSITY  CITY 

the  head  of  them  to  cany  out  and  finance  great  enterprises,  and  to  earn 
enormous  profits  for  them.  I  believe  that,  with  the  lielp  of  my  readers, 
1  can  organize  one  of  the  greatest  banks  and  trust  companies  in  the  world, 
doing  its  business  entirely  by  mail,  and  becoming  one  of  the  greatest  pow- 
ers in  the  country.  xVs  an  illustration  of  this,  if  each  one  of  my  readers 
were  to  contribute  the  small  sum  of  fifty  dollars  to  the  capitalization  of 
this  trust  company  and  bank,  it  would  be  the  most  powerful  bank  in  the 
world  today,  with  a  capital  of  one  hundred  million  dollars. 

JMy  plan  is  this:  In  a  few  days  I  shall  organize  the  Woman's  Magazine 
Postal  Bank  and  Trust  Co.  I  have  asked  five  of  our  foremost  bankers  in 
the  city  of  St.  Louis  to  act  with  me  as  the  board  of  directors  in  the  man- 
agement of  this  institution.  I  want  each  one  of  my  readers  to  become  a 
stockholder  in  this  great  bank  and  trust  company  to  the  extent  of  at  least 
one  dollar,  which  is  about  the  sum  I  started  with  myself  a  few  years  ago. 
For  every  dollar  that  my  readers  put  into  this  bank  as  capital,  I  will  put 
in  one  dollar  myself  to  the  full  extent  of  my  own  private  fortune.  In  this 
way,  1  expect  to  organize  a  trust  company  and  bank  which  will  become  one 
of  the  most  powertul  factors  in  the  financial  world  and  which  will  be  owned 
by  my  readers  and  myself  equally. 

Tins  bank  will  carry  on  its  business  entirely  by  mail,  so  that  those  in 
small  tovvns  and  rural  districts  who  wish  to  deposit  with  the  bank,  can  do 
so  by  mail  or  draw  their  money  by  mail  more  conveniently  than  they  could 
with  the  nearest  local  bank.  We  have  worked  out  a  wonderful  system  for 
this  and  have  applied  for  patents  on  it,  so  that  no  others  can  take  advan- 
tage of  it. 

The  greatest  bankers  in  the  city  of  St.  Louis,  who  are  among  the  most 
substantial  and  experienced  bankers  in  the  world,  will  be  on  the  board  of 
directors  with  me  and  assist  in  the  management  of  this  institution;  but,  from 
start  to  finish,  it  will  be  a  bank  of  the  people,  for  the  people,  and  a  means 
whereby  the  man  or  woman  with  a  single  dollar  invested  in  its  capital 
stock  becomes  a  part  owner  of  the  bank  and  will  share  in  the  profits  and 
earnings  of  this  great  financial  institution.  Its  depositors  will  be  spread 
over  the  world  wherever  the  Woman's  Magazine  and  Woman's  Farm  Journal 
go.  The  ordinary  bank  must  compete  with  a  dozen  other  banks  in  its  own 
town  of  a  small  population,  while  we  have  two  million  families  who  are  sub- 
scribers to  our  papers  and  their  ten  million  friends,  giving  the  proposed 
bank  and  trust  company  the  greatest  resources  of  any  bank  in  the  world. 
Such  an  institution  owned  by  our  own  readers  would  become  one  of  the 
greatest  powers  in  the  world  today— a  power  with  which  even  the  Govern- 
ment would  have  to  reckon  in  the  floating  of  its  bonds. 

I  want  you  as  one  of  my  readers  to  join  with  me  in  this  great  enter- 
prise to  the  extent  of  at  least  one  dollar.  If  you  have  friends  or  children, 
send  a  dollar  for  each  of  them,  or  you  can  send  as  much  more  as  you 
wish.  One  share  of  stock  will  be  issued  to  you  in  this  great  bank  and  trust 
company  for  each  dollar  that  you  send.  It  will  be  organized  under  the 
laws  of  the  State  of  "Missouri,  which  are  the  strictest  in  the  country.  It 
will  have  the  advantage  of  the  judgment  and  advice  in  its  affairs  of  the 
foremost  bankers  of  St.  Louis.  Its  capital  becomes  a  bulwark  and  safe- 
guard, its  stock  can  not  be  assessed;  and  I  promise  you  that,  if  it  is  within 
the  possibilities  of  a  human  being  to  do  so,  that  l  will  make  this  great 
bank  and  trust  company  as  successful  and  profitable  to  you  as  my  great 
publisliing  com])any  h;is  been  to  those  who  joined  me  in  it.  Your  few  dol- 
lars invested  in  the  stock  of  tliis  company  may  in  a  few  years  from  now 
liave  done  for  you  what  a  few  dollars  invested  with  me  at  the  start  have 
done  for  my  stockholders  in  the  publishing  company — made  them  well-to-do. 
I  believe  that  I  am  offering  you  the  opportunity  of  your  life.  I  would 
rather  have  one  dollar  each  from  my  readers  than  a  large  sum  from  any 
one  person.  The  ca})ital  for  tl'is  bank  has  been  offered  me  by  several 
great  bafikers  in  St.  Louis;  but  I  want  my  readers  to  join  with  me  in  this 


THE  DREYFUS  CASE  OF  AMERICA  303 

proposition.  I  want  at  least  a  single  dollar  from  each  of  them,  and  I  want 
every  one  of  them  to  come  in  with  me ;  and  if  you  wish,  you  may,  as  I  have 
said,  put  in  a  dollar  for  each  of  your  children  or  relatives,  or  as  much 
more  as  you  please  for  yourself. 

I  expect  to  have  all  the  details  of  the  organization  of  this  great  bank  and 
trust  company  complete  in  a  few  days,  so  that  it  is  necessary  for  you  to 
answer  as  quickly  as  possible  if  you  wish  to  join  with  me.  Furthermore,  I 
have  worked  out  a  plan  whereby,  as  soon  as  this  great  bank  and  trust  com- 
pany is  organized,  each  of  its  stockholders,  even  though  they  own  but  a 
single  dollar's  worth  of  the  stock,  will  become  our  permanent  representative 
and  agent  in  their  own  place  of  residence,  and  by  my  plan,  of  which  I  will 
tell  you  as  soon  as  the  bank  is  formed,  you  will  be  able  to  accumulate  a 
nice  little  bank  account  of  your  own  through  representing  the  bank  in  your 
commimity. 

Do  not  lay  this  aside,  as  I  shall  not  make  the  offer  to  you  twice.  If  you 
wish  to  join  with  me  in  this  great  enterprise,  sit  down  at  once  and  fill  in 
the  blank  that  I  enclose,  and  send  it  back  to  me  by  return  mail.  As  soon 
as  tlie  bank  is  organized,  the  stock  will  be  properly  registered  and  issued 
to  you.  Very  truly  yours, 

E.  G.  Lewis, 
President  of  The  Lewis  Publishing  Company. 

This  is  the  first  and  only  time  people  of  moderate  means  have  ever  had 
an  opportunity  to  secure  an  interest  in  a  bank. 

THE   PUBLIC   RESPONSE. 

The  response  to  the  above  circular  was  immediate  and  overwhelm- 
ing. Each  mail  brought  Lewis  from  five  hundred  to  a  thousand  sub- 
scriptions to  the  capital  stock  of  the  bank.  He  soon  realized  that 
a  capital  stock  of  one  hundred  thousand,  or  even  five  hundred  thou- 
sand dollars,  would  be  very  largely  over-subscribed.  He,  there- 
fore, determined  to  increase  the  proposed  capitalization  to  the  total 
sum  of  five  million  dollars.  In  brief,  this  initial  promotion  effort, 
owing  to  the  enormous  circulation  of  the  circulars  and  magazines, 
was  a  huge  success. 

Returning  once  more  to  the  introductory  article  from  "Banking 
by  Mail,"  Lewis  comments  upon  the  response  to  this  first  circular- 
ization  of  his  readers  in  the  following  manner: 

Probably  no  other  man  ever  went  through  quite  such  an  experience  as 
I  did  during  the  three  months  from  April  to  June,  1901.  To  spend  years 
carefully  studying  out  the  plans  of  a  bank  organization,  and  then  present 
it  to  the  public  in  a  few  letters  and  in  the  magazine;  and  see  it  caught  up 
like  a  whirlwind,  responded  to  from  every  part  of  the  Nation  by  entire 
strangers,  from  the  most  prominent  bank  oificials  to  the  poorest  laborer  in 
the  camps;  to  read  the  expressions  of  confidence  and  trust  and  good-will 
of  a  million  families,  Avould  make  any  man  pledge  his  life  and  ability  to 
carry  througli  the  project  to  the  end. 

At  first,  it  was  like  the  rustling  of  the  wind  in  my  ears.  My  own  thoughts 
developed  by  imperceptible  degrees  through  the  suggestions  and  letters  of 
a  million  people.  Then  came  the  actual  proving  of  the  proposition,  and  the 
request  for  subscriptions.  Then,  like  the  roar  of  the  ocean,  came  the  re- 
sponse from  every  quarter  of  the  Nation. 

These  people  told  me  how  much  money  they  had  for  deposit  when  they 
sent  in  their  subscriptions  to  the  stock  in  tlie  bank.  Judging  from  what 
they  say,  I  can  easily  predict  that  within  a  few  years,  our  bank  will  have 
over  a  "hundred  million  dollars  in  deposits.  If  I  had  made  the  prediction 
five  years  ago,  with  nothing  back  of  me,  I  would  not  be  entitled  to  any 


304  THE  SIEGE  OF  UNIVERSITY  CITY 

credence.  But  as,  during  these  five  years  I  have  built  up  on  similar  lines, 
the  largest  and  most  profitable  publishing  business  in  the  world,  and  have 
erected  and  paid  for  the  finest  and  costliest  publishing  plant  in  the  world, 
as  the  result  of  the  publishing  business;  and  as  I  am  today  in  daily  inter- 
course with  the  two  million  families,  knowing  their  thoughts  and  what  they 
want,  I  am  entitled  to  a  reasonable  belief  that  my  statements  are  likely  to 
be  correct. 

I  have  personally  read  and  answered  during  the  last  few  weeks,  over 
twenty  thousand  letters  on  the  bank,  from  every  conceivable  kind  of  man 
and  weman,  from  metropolitan  bank  presidents  to  coalheavers  in  the  mines. 
I  know  what  I  am  talking  about,  not  from  theory,  but  from  actual  contact 
with  the  thought  of  the  people  in  the  country. 

At  first  my  theories  were  laughed  at  by  big  bankers.  They  said,  "The 
people  won't  send  their  money."  It  is  very  true  that  the  people  would  not 
send  their  money  to  them;  because  they  have  never  heard  of  them  and  their 
banks  before.  The  great  population  of  this  country  has  been  taught  to  be- 
lieve that  the  wealthj'  men,  the  captains  of  industry,  the  high  financier,  the 
stock-broker,  and  the  banker  are  their  arch  enemies;  that  the  millions  ot 
their  wealth  are  drawn  from  the  blood-money  of  the  poor.  To  a  certain  ex- 
tent this  has  been  true.  Accumulated  money  breeds  selfishness.  The  man 
who  gains  great  wealth  thinks  he  has  got  it  by  his  own  endeavors,  and  owns 
it  for  the  satisfaction  of  his  pleasures.  The  banker  gains  large  sums  by 
interest,  owns  his  lovely  home,  travels,  enjoys  life;  but  he  does  not  touch 
the  heart  of  his  subscribers  and  depositors.  He  has  no  sense  of  responsi- 
bility as  the  trustee  to  the  people  for  all  this  money  of  which  he  has  com- 
mand, which  has  been  wrung  from  the  toil  of  a  million  laboring  people.  He 
Ihlnks  he  himself  created  this  wealth  that  he  controls.  But  let  him  sit  down 
and  read  through  twenty  thousand  letters  from  these  people.  I  tell  you 
he  would  gain  a  viewpoint  he  never  had  before. 

Immediately  following  this  introductory  article,  the  substance  of 
which  has  been  reproduced  in  the  foregoing  pages,  occurs  a  second 
article,  dealing  with  the  practical  organization  of  the  proposed  in- 
stitution under  the  title  of  "A  People's  Mail  Bank."  These  are 
the  opening  paragraphs: 

I  propose  to  organize  the  People's  Mail  Order  Bank.  The  capital  of  this 
bank  is  expected  to  be  five  millions  of  dollars  in  cash.  This  capital,  as  far 
as  practicable,  will  be  invested  in  Government  bonds  or  equally  good  securi- 
ties, sacrificing  the  interest  rate  for  absolute  security.  I  have  in  my  pub- 
lishing business  a  great  training  school  for  this  bank.  We  handle  here  two 
million  people  once  a  month,  twelve  times  a  year,  for  ten  cents  a  year  each. 
The  people  employed  here  are  especially  fitted  by  training  and  knowledge 
for  the  handling  of  the  business  of  a  great  mail  bank.  This  mail  bank  is 
not  expected  to  do  business  over  the  counter.  It  will  neither  receive  de- 
posits nor  pay  money  except  through  the  mails.  The  capital  stock  of  the 
bank  is  being  subscribed  by  tens  of  thousands  of  people,  scattered  through 
practically  every  town  and  city  on  the  North  American  continent,  the  great 
)ulk  of  whom  are  the  patrons  and  readers  of  the  Woman's  Magazine. 

I  shall  have  associated  with  me  on  the  Board  of  Directors,  seven  of  the 
strongest,  ablest  men  that  I  can  get.  These  men  I  have  selected  because, 
while  they  have  made  independent  fortunes — have  made  them  legitimately 
and  honestly  by  a  life's  labor — they  are  so  situated  that  they  are  free  from 
the  pull  and  the  intrigue  that  their  position  would  naturally  bring  against 
them.  They  have  a  life  record  of  honesty  and  fair  dealing  which  makes  their 
standing  in  the  community  one  tliat  cannot  be  questioned.  Next  to  the 
Board  of  Directors  will  be  the  financial  or  advisory  board,  composed  of 
experienced  bankers  and  busuiess  men.  Tlie  loaning  of  the  funds  of  the 
bank  will  then  be  done  by  its  proper  officers,  with  the  advice  and  counsel 
of  this  Advisory  Board. 


THE  DREYFUS  CASE  OF  AMERICA  305 

Then  comes  a  description  of  the  practical  operations  of  the  bank, 
including  its  two  classes  of  deposits,  namely,  by  the  certified  check 
system,  and  in  the  form  of  time  or  savings  deposits.  A  description 
of  the  process  of  depositing  by  mail  and  the  details  of  the  practical 
operation  of  the  bank,  were  also  given.  Considerable  space  was 
devoted  to  answering  a  series  of  questions  culled  from  the  letters 
of  subscribers.  The  prospectus  concluded  with  a  reproduction  of 
sundry  letters  commendatory  of  the  bank  project  from  the  group 
of  men  who  were  most  prominently  identified  with  Lewis  as  his 
backers  and  advisers.  These  were  men  who,  by  association  with 
him  in  his  various  projects,  and  by  practical  experience  in  their  own 
more  or  less  closely  related  lines  of  effort,  were  in  a  position  to  grasp 
most  clearly  the  scope  and  value  of  his  scheme.  The  tone  of  these 
communications  was  such  as  to  inspire  the  most  unqualified  confi- 
dence in  Lewis'  undertaking. 

After  the  publication  of  "Banking  by  Mail,"  Lewis  continued  to 
develop  the  various  phases  of  his  project  in  great  detail  in  the  col- 
umns of  the  Woman's  Magazine.  He  ran  a  series  of  monthly  arti- 
cles in  the  issues  from  September,  1904,  to  April,  1905,  inclusive. 
Then  he  got  out  a  monthly  house  organ  called  "The  Bank  Reporter." 
Three  issues  of  this  were  published  during  the  months  of  April, 
May,  and  June^  1905.  The  total  volume  of  promotion  literature  on 
the  People's  Bank,  which  flowed  from  Lewis'  facile  pen,  would  far 
more  than  fill  the  present  volume.  Any  further  attempt  to  set  forth 
his  representations  to  his  subscribers  by  means  of  extracts  from  his 
Avritings  would  be  rather  misleading  than  helpful.  Their  true  sig- 
nificance is  no  longer  felt  when  they  are  taken  from  their  original 
context  and  shown  in  other  than  their  true  relations.  The  garbling 
of  such  excerpts  in  the  reports  of  the  postoffice  inspectors  and  in 
official  charges  and  ex  parte  statements  against  Lewis,  has  been  a 
subject  of  earnest  protest  by  his  attorneys,  and  of  his  own  severest 
criticisms.  A  just  appreciation  of  the  total  effect  of  the  whole  vol- 
ume of  literature  employed  in  the  promotion  of  the  People's  Bank 
is  not  to  be  had  from  a  series  of  excerpts,  no  matter  how  judicial 
the  temper  or  intelligent  the  caution  with  which  they  are  selected. 
The  true  effect  can  only  be  conveyed  by  reading  them  again  in 
chronological  order  or  by  some  sort  of  summary  review. 

Lewis  has  twice  been  called  upon  at  momentous  crises  in  his  career 
to  summarize  briefly  his  conception  of  the  People's  Bank.  The  first 
occasion  was  at  his  defense  in  the  Federal  court;  the  second  was 
before  the  Congressional  inquisitors.  The  following  paragraphs 
have  been  carefully  compiled  from  his  testimony  upon  these  occas- 
ions, and  may  be  taken  as  offering,  in  brief  compass,  perhaps  the 
clearest  view  that  has  yet  been  presented  of  the  inception  of  the 
People's  Bank,  and  of  its  principal  features. 

I  became  very  much  impressed  during  the  early  history  of  my  publish- 
ing business  with  the  condition  as  to  small  remittances  in  this  country.  We 
would  have  sometimes  as  high  as  forty  thousand  dollars'  worth  of  postage 
stamps  piled  up  gn  us,    There  was  no  market  for  them  except  at  a  heavy 


306  THE  SIEGE  OF  UNIVERSITY  CITY 

loss.  We  could  not  keep  them,  because  they  would  stick  together.  This 
attracted  my  attention  to  the  need  of  better  facilities.  I  went  to  one  of 
the  banks,  and  inquired  if  they  would  store  postage  stamps  in  their  vaults, 
and  practically  allow  nie  to  use  them  as  representing  currency.  I  arranged 
with  them  to  accept  postage  stamps  as  collateral  up  to  about  ninety  per 
cent.  The  following  morning  I  drove  up  to  that  bank  with  a  cab  load  of 
postage  stamps  amounting,  I  think,  to  about  tliirty-eight  thousand  dollars. 
They  probably  never  had  seen  so  many  postage  stamps  before.  They  would 
accept  only  ten  thousand  dollars'  wortli  at  that  time. 

The  heavy  loss  of  small  currency  remittances,  due  probably  to  the  cur- 
rency wearing  through  the  envelope  and  falling  out,  was  another  condition 
that  came  to  my  knowledge.  Incessant  complaints  came  from  subscribers, 
from  advertisers  and  from  their  customers,  that  small  currency  remittances 
often  failed  to  reach  their  destination. 

The  postoffice  monej'  order  is  the  most  convenient  and  popular  form  for 
small  remittances.  But,  sixty-odd  per  cent  of  the  postoffices  in  the  United 
States  did  not  then  issue  money  orders;  whereas,  about  sixty  per  cent  of 
the  entire  population  lived  in  the  open  country,  and  in  tillages  and  towns 
of  less  than  three  thousand  population.  Even  in  large  cities  it  is  often  in- 
convenient to  go  to  one  of  the  branch  postoffices  or  the  central  postoffice 
to  buy  a  money  order.  Almost  two-thirds  of  the  population  of  the  United 
States,  holding  the  great  bulk  of  the  wealth  of  the  country,  was  thus  not 
only  without  banking  facilities,  but  even  without  adequate  facilities  of  any 
sort  for  making  small  remittances. 

CONSULTATIONS    WITH    BANKERS. 

I  became  very  much  interested  in  the  situation  of  the  rural  population 
of  the  United  States,  as  I  have  said,  because  of  the  lack  of  some  suitable 
system  of  making  small  remittances,  and  the  total  absence  of  banking  facili- 
ties. We  came  intimately  into  contact  with  these  actual  operations.  Finally, 
I  went  down  to  the  National  Bank  of  Commerce,  and  put  the  proposition 
up  to  them. 

I  had  a  number  of  long  conversations  with  Mr.  John  A.  Lewis,  Mr.  Ed- 
wards, and  Mr.  Cowan.  I  said  in  substance:  "You  fellows  in  the  banking 
business  must  get  your  heads  together  pretty  soon,  and  either  let  a  postal 
bank  law  go  through,  or  else  establish  some  means  for  making  small  remit- 
tances, and  drawing  back  into  circulation  the  currency  that  is  going  back 
into  the  rural  districts  in  a  constant  flow.  That  currency  stays  there,  and 
does  not  come  back  into  circulation;  just  as  gold  goes  from  England  to 
India  and  never  returns.  Unless  you  do  something  of  that  sort  pretty  soon, 
some  day  you  will  have  to  cash  up  on  these  billion  dollar  security  proposi- 
tions that  are  running  your  printing  presses  over  night,  and  then  you  will 
find  that  the  bulk  of  the  actual  real  money  is  way  back  in  the  rural  dis- 
tricts where  you  cannot  lay  your  hands  on  it.  That  is  the  only  thing  which 
will  count  then.  The  lack  of  it  will  cause  your  securities  to  go  down  to 
the  level  of  the  real  cash  that  you  have."    That  appealed  to  them. 

I  then  took  them  up  to  my  office,  and  showed  them  the  enormous  mass  of 
remittances  and  the  letters  from  peojile  who  said  that  they  had  no  banking' 
facilities.  A  man  would  write  me,  for  example,  and  say,  "I  have  two  thou- 
sand dollars  on  hand  in  currency,  because  I  have  no  banking  facilities  at 
all.  I  keep  a  little  country  store,  and  there  is  no  place  for  me  to  bank  the 
money."  These  bankers  asked  me  what  I  would  suggest.  I  replied  in  sub- 
stance, "I  do  not  believe  there  will  be  a  postal  savings  bank  in  the  United 
States  in  the  next  twenty  years,  because  the  express  companies  and  the 
bankers  will  knock  it  out.  Why  not  organize  a  mail  bank?  Why  not  get 
that  money  into  St.  I^ouis,  and  make  this  the  greatest  national  banking  cen- 
tre in  America?  The  money  can  be  deposited  in  your  banks.  You  can 
carry  on  the  necessary  system  of  credit,  and  if  you  lend  it  and  lose  it  you 
will  have  to  make  it  good  to  this  central  bank,  because  it  will  be  simply  u 
depositor  with  you.    The  mail  bank  can  afford  to  take  a  very  low  rate  of 


THE  DREYFUS  CASE  OF  AMERICA  307 

interest  from  you,  because  it  will  have  very  little  chance  of  loss.  Your 
capitalization  and  surplus  will  protect  it.  It  will  have  no  operating  expenses 
except  its  mail.  A  few  clerks  in  one  room  will  handle  the  whole  proposi- 
tion. The  mail  bank  will  not  have  to  maintain  a  separate  credit  organiza- 
tion. It  can  refer  borrowers  to  the  depository  banks  to  find  out  whether 
their  credit  is  good,  and  if  the  depository  banks  make  bad  loans  that  will 
be  their  lookout?" 

They  said  in  substance,  "Why  can  we  not  keep  this  proposition  right  in 
the  National  Bank  of  Commerce?  Our  bank  is  big  enough  to  handle  any 
proposition.  We  will  be  occupying,  in  a  comparatively  short  time,  the  great 
new  building  which  we  are  putting  up.  We  will  then  take  that  up  with  you, 
Lewis,  and  will  probably  go  into  it  along  those  lines."  I  studied  the  thing 
over,  and  concluded  if  I  waited  for  them  to  go  into  it,  somebody  else  would 
do  the  same  thing  elsewhere,  and  St.  Louis  would  not  become  the  banking 
centre. 

ST.  LOUIS  TO  BE  A  BANKIXG  CENTRE, 

I  felt  that  St.  Louis  was  logically  and  in  every  other  way  the  place  for 
such  an  institution,  because  approximately  eighty-five  per  cent  of  all  the 
rural  routes  in  the  United  States  start  within  a  radius  of  five  hundred  miles 
from  St.  Louis;  and  within  that  radius  customers  could  do  business  in  St. 
Louis  by  mail  almost  as  conveniently  as  if  they  lived  in  the  city.  Within 
that  circle  of  five  hundred  miles  is  the  greatest  empire  in  the  world.  The 
currency  is  there. 

I  showed  these  men  from  the  last  statements  of  the  Government  itself 
that  the  United  States  Treasury  and  all  the  banks  and  financial  institu- 
tions in  America  could  only  account  for  one  billion,  out  of  a  currency  of 
three  billion  of  currency.  Where  is  the  other  two  billion,  Not  in  the  pockets 
of  the  city  men,  because  the  average  city  man  finds  so  many  ways  to  spend 
his  money  before  he  gets  home  at  night  that  he  is  usually  in  debt  instead 
of  having  a  surplus.  Probably  ninety  per  cent  of  the  thousand  clerks  of 
the  National  Bank  of  Commerce  itself,  for  example,  get  less  than  one  thou- 
sand dollars  a  year.  The  cost  of  living  in  St.  Louis,  paying  carfare  coming 
and  going,  the  cost  of  dressing  as  they  have  to  dress,  and  everything  of  that 
sort,  is  such  that  they  do  not  have  their  per  capita  of  cash  in  their  pockets. 

Conditions  in  the  rural  districts  are  different.  The  man  who  sells  his 
crop,  and  cleans  up  five  hundred  or  a  thousand  dollars,  has  that  sum  in 
cash.  The  truth  of  my  conclusion  was  proved  when  the  People's  United 
States  Bank  got  into  operation.  Practically  ninety  per  cent  of  all  its  re- 
ceipts came  in  the  form  of  currency.  St.  Louis  drew  upon  a  larger  and 
more  prosperous  rural  population  than  any  other  city;  and  I  wanted  to  see 
this  plan  worked  out  right  there  under  the  most  favorable  conditions. 

Later,  I  requested  each  of  the  leading  banks  of  St.  Louis  to  appoint  one 
of  their  directors  to  make  an  exhaustive  investigation  into  this  plan,  and 
make  any  suggestions  they  saw  fit.  I  further  requested  that  they  each  select 
one  of  their  directors  to  become  a  director  of  the  People's  United  States 
Bank,  thus  placing  the  directorship  and  control  of  this  bank  in  the  hands 
of  the  united  banks  of  the  city  of  St.  Louis.  The  matter  was  taken  up  by 
a  number  of  banks  and  many  of  these  bankers  were  at  my  building  con- 
ferring with  me  incessantly.  Sometimes,  the  conferences  would  last  late 
into  the  night.  The  understanding  and  agreement  was  general  that  these 
plans  were  to  be  carried  out.  Ex-Governor  David  R.  Francis  afterwards 
testified  on  the  witness  stand,  at  the  trial  of  the  charges  against  me  that 
the  bank  was  a  scheme  to  defraud,  that  he  had  been  invited  to  become  one 
of  the  directors  himself,  but  was  deterred  by  the  belief  that  I  would  not 
be  permitted  by  rival  interests  to  carry  out  my  plans.  During  our  con- 
ferences on  the  appointment  of  the  first  board  of  directors  and  the  advis- 
ory board  back  of  that  drawn  from  the  five  re-depository  banks,  I  found 
great  difficulty  in  getting  together  such  a  board  as  I  wanted,  unless  I 
would  agree  to   confine  the  deposits   to  those   particular   banks.     Every 


308  THE  SIEGE  OF  UNIVERSITY  CITY 

banker  with  whom  I  took  up  the  matter  of  becoming  a  director  or  member 
of  the  advisory  board  demanded  tiat  his  bank  should  be  one  of  the  five 
re-depository  banks.  The  subject  was  being  threshed  out  and  resulted  in 
almost  incessant  conferences. 

At  this  time,  such  a  thing  as  an  attack  on  the  bank  was  in  nobody's 
mind  at  all,  although  we  realized  that  we  %vere  arousing  a  great  deal  of 
interest  and  criticism,  most  of  it  favorable — some  of  it  adverse. 

OPINIOXS    OF    BAKKERS. 

During  these  conferences  I  stated  distinctly  to  the  bankers  of  St.  Louis 
that  it  was  not  my  desire  or  intention  to  become  a  banker;  that  my  am- 
bition was  to  become  the  greatest  publisher  in  the  world.  I  told  them  I 
was  going  to  create  this  bank,  and  I  then  and  there  asked  them  one  and 
all  to  join  with  me  in  its  creation.  Meantime,  I  had  been  telling  about 
this  plan  at  great  length  in  mj^  publications,  and  enlarging  upon  it.  The 
idea  grew  in  my  mind.  As  I  talked  with  bankers  throughout  the  country, 
and  with  business  men  of  large  means  and  responsibility,  I  finally  came 
to  believe  that  I  had  conceived  the  greatest  banking  institution  in  this 
Nation.  There  was  no  doubt  in  my  mind  of  it,  and  I  do  not  believe  there 
was  any  doubt  in  the  minds  of  any  one  associated  with  me. 

I  talked  over  this  project,  not  only  with  the  National  Bank  of  Com- 
merce, but  with  practically  every  banker  in  St.  Louis.  Then  I  went  to 
Chicago  and  talked  it  over  there.  I  also  had  many  personal  interviews 
with  leading  bankers  from  other  cities  pretty  much  all  over  the  country. 

The  features  of  the  proposed  bank  were  afterwards  carefully  discussed 
with  representative  bankers  from  Maine  to  California.  The  paying  banks 
associated  with  the  People's  United  States  Bank,  which  were  among  the 
leading  banks  in  America,  made  themselves  fully  cognizant  of  all  the  de- 
tails of  our  plans,  because  their  connection  was  practically  an  endorse- 
ment of  the  plan  to  the  public.  Van  Cleave  of  the  Park-National  Bank 
of  New  York  wrote  a  letter  stating  that  we  had  undoubtedly  worked  out 
a  most  wonderful  proposition.  Childberg,  president  of  the  Scandinavian- 
American  National  Bank  of  Seattle,  Washington,  came  to  St.  Louis,  and 
spent  several  days  with  me.  He  said,  "That  certificate  of  deposit  looks 
good  to  me,"  and,  when  he  went  back  to  Seattle,  he  adopted  it  for  his 
bank. 

I  had  a  letter  from  Comptroller  of  the  Currency  Ridgley,  inquiring  about 
the  plan,  and  in  my  reply  I  discussed  with  him  verj^  fully  its  different 
phases.  After  the  bank  was  attacked,  an  interview  with  him  was  pub- 
lished in  the  Eastern  papers.  He  said  he  had  gone  all  over  the  plan,  and 
did  not  see  anything  the  matter  with  it.  The  published  statement  was 
extremely  favorable;  though  I  did  not  have  a  personal  interview  with  him 
about  the  matter.  There  was  never  a  feature  of  that  bank  from  its  be- 
ginning to  the  day  of  its  death,  which  was  not  carefully  taken  up  and 
exhaustively  gone  into  with  the  best  advisers  that  I  could  find.  I  made 
only  one  mistake.     I  did  not  advise  with  the  postoffice  inspectors. 

At  the  outset  of  this  design  I  informed  myself  quite  thoroughly  about 
the  history  of  postal  banks.  I  read  the  official  reports  of  our  own  Gov- 
ernment officials  in  regard  to  them.  I  read  quite  thoroughly  of  the  Postal 
Bank  of  England,  and  of  the  Mont  de  Piete  of  France,  a  great  govern- 
ment institution,  one  of  the  principal  features  of  which  was  embodied  in 
our  bank.  I  also  went  over,  quite  thoroughly,  the  history  of  the  efforts  to 
have  a  postal  bank  in  this  country. 

I  first  took  up  the  question  of  the  title  of  the  People's  United  States 
Bank  with  the  Postoffice  Department,  about  January,  1904.  I  mailed  them 
literature  taking  the  name  first  of  the  Postal  Bank.  They  objected  that 
such  a  title  might  be  misunderstood.  Senator  Beveridge  took  up  the  name 
of  the  People's  Bank  with  them  for  us,  but  the  use  of  the  word  "Postal" 
or  "Mail"  was  found   to  be  objectionable  to  the  Department.     I   finally 


THE  DREYFUS  CASE  OF  AMERICA  309 

adopted  the  title  of  the  People's  United  States  Bank  with  their  approval 
and  consent. 

The  first  advantage  of  a  postal  bank,  as  distinguished  from  a  bank  of 
ordinary  character,  was  to  bring  into  circulation  a  class  of  deposits  which 
was  not  in  circulation,  and  could  not  be  reached  in  any  other  way.  I  had 
seen  in  my  own  business  the  gradual  retirement  to  rural  districts  of  the 
actual  currency  of  the  Nation.  The  farmer  had  become  more  prosperous 
for  the  previous  ten  years,  and  had  taken  out  of  circulation  more  money 
each  year.  The  average  man  in  the  rural  districts  had  no  banking  facili- 
ties, and  when  he  received  a  few  hundred  dollars,  it  was  hoarded  and  with- 
drawn from  circulation.  My  investigation  showed  me  that  the  per  capita 
of  national  wealth  was  twenty-four  or  twenty-five  doUars.  The  great  cor- 
porations were  doubling  and  quadruplicating  their  capitalization,  and  if 
the  currency  could  not  be  kept  in  circulation  there  must  come  a  time  when 
there  would  not  be  suiBcient  circulating  medium  to  enable  them  to  cash 
up.  The  purpose  of  this  bank  was  to  bring  into  circulation  this  hidden 
money.  The  rural  free  delivery  had  developed  in  the  previous  ten  years 
from  nothing,  until  it  served  some  forty  million  people.  All  this  made  pos- 
sible the  operation  of  such  a  bank. 

A    NATIONAL   CLEARING    HOUSE. 

Another  function  of  our  mail  bank  was  to  eliminate  the  item  of  ex- 
change on  small  remittances.  Most  of  the  machinery  with  which  we  do 
business  nowadays,  when  you  get  right  down  to  it,  is  inherited,  more  or 
less  modified,  from  three  to  ten  previous  generations.  Exchange  is  largely 
a  relic  from  the  old  days  when  they  transmitted  the  actual  currency.  I 
remember  when  I  used  to  have  to  pay  exchange  right  in  St.  Louis  on  my 
check  in  that  town  if  it  went  to  another  bank  there.  The  theory  of  that 
was  that  they  really  had  to  transmit  the  currency.  After  awhile  they  woke 
up  and  organized  a  clearing  house,  so  that  the  bankers  of  St.  Louis  today, 
instead  of  carting  around  a  wagonload  of  money  every  day  to  clear  their 
exchanges,  simply  send  a  representative  from  each  bank  to  meet  together 
and  strike  a  balance.  They  do  not  move  the  currency  at  all,  and  the  same 
thing  is  done  by  means  of  a  clearing  house  in  all  large  cities.  Only  the 
differences  are  transmitted,  which  may  not  be  ten  per  cent. 

The  exchange  charge,  however,  has  been  kept  on  in  the  country.  Over 
a  billion  dollars,  according  to  the  best  statistics  I  have  been  able  to  find, 
passes  annually  through  the  United  States  mails.  About  four  hundred 
million  dollars  each  is  remitted  in  express  orders,  postoffice  orders,  and 
currency,  on  all  of  which  exchange  is  charged.  Almost  every  penny  of  that 
tremendous  tribute  is  paid  by  the  sender  of  small  remittances.  There  is  a 
charge  for  the  express  order  or  the  postoffice  money  order,  and  if  a  bank 
check  is  used,  there  is  exchange  on  that.  The  result  of  that  is  that  the 
man  in  the  country  desiring  to  remit,  either  buys  a  money  order,  or  uses 
a  small  check  and  has  to  pay  a  premium  on  that.  One  of  the  principal 
features  of  the  postal  bank  was  simply  doing  for  the  United  States  what 
is  thus  being  done  in  every  city  of  the  United  States. 

The  thought  struck  me  that  the  problem  could  be  solved  for  the  whole 
United  States  in  exactly  the  same  way  that  the  banks  had  solved  it  in  the 
city.  I  proposed  by  means  of  one  central  bank  for  these  smaU  remit- 
tances to  strike  a  balance  for  the  population  of  the  United  States,  whether 
it  was  from  East,  West,  North  or  South,  anywhere  the  population  existed. 
I  simply  constituted  the  People's  L'nited  States  Bank  the  clearing  nouse. 
We  divided  the  country  into  five  territories.  The  East,  the  Central  North- 
west, the  Southwest,  and  the  extreme  West,  with  New  York,  Chicago,  New 
Orleans  and  San  Francisco  as  the  paying  centres,  respectively,  and,  of 
course,  the  People's  United  States  Bank  as  paying  centre  for  the  Middle 
West,  at  St.  Louis.  We  established  in  each  of  those  five  districts  a  paying 
bank  upon  which  our  certified  checks  were  drawn.  In  New  York,  the  Park- 
National  Bank;  in  Chicago,  the  First  National;  in  San  Francisco,  the  Bank 


310  THE  SIEGE  OF  UNIVERSITY  CITY 

of  California;  in  New  Orleans,  the  Hibernian  Trust  Company,  and  in  St. 
Louis,  our  bank.  Afterwards,  we  made  the  Scandinavian- American  Bank 
of  Seattle  one  of  our  paying  banks,  because  I  made  connections  all  the 
way  up  to  Nome,  Alaska,  We  sent  dog-sled  loads  of  these  certified  checks 
up  to  the  miners  in  Alaska,  because  they  did  not  want  to  carry  tlieir  gold 
dust  armnd.  Those  money  orders  froze  up  and  stayed  tlicre  all  winter. 
Meantime,  tht  money  was  earning  inlei':'st.     That  was  tlie  theory. 

^\'e  carried  a  balance  at  each  of  the  paying  banks  to  cover  our  certified 
checks,  they  agreeing  to  paj^  us  two  per  cent  interest.  The  checks  being 
drawn  on  any  one  of  those  five  banks  in  the  five  great  money  centres,  were 
exchanged  at  those  points  without  charge.  I  figured  that  less  than  ten 
per  cent  of  actual  currency  would  carry  the  business,  and  that  I  could 
draw  interest  on  ninety  per  cent  of  that  money  all  the  time,  because  that 
proportion  of  the  checks  would  be  in  transit.  That  was  practically  what 
happened.  There  might  be  fifty  million  dollars'  worth  of  these  checks  out- 
standing, but  there  would  be  fifty  million  dollars  cash  deposited  to  the 
credit  of  the  People's  United  States  Bank  in  these  paying  and  issuing 
banks,  or  the  checks  could  not  be  outstanding.  Meantime,  my  bank  would 
be  draM'ing  two  per  cent  interest  on  the  daily  balances. 

Suppose,  by  any  misadventure,  our  paying  balance  in  New  York  was 
but  a  hundred  thousand  dollars,  and  all  the  checks  in  the  United  States 
happened  to  concentrate  on  New  York,  and  call  for  two  hundred  thousand 
from  the  New  York  bank.  After  paying  to  the  limit  of  their  balance  they 
could  bundle  up  the  rest,  look  over  the  exchange  rates  and  transmit  them 
to  the  other  paying  banks  wherever  they  could  make  a  little  money  by  ex- 
change. That  took  care  of  overdrafts  on  the  paying  bank.  If  we  overdrew 
our  balance  in  the  New  York  bank,  because  of  an  excessive  number  of 
checks  coming  there  at  any  time,  they  could  forward  the  excess  to  the 
Chicago  bank  as  Chicago  exchange,  or  could  use  them  as  exchange  on  San 
Francisco,  or  New  Orleans.  The  checks  were  sometimes  not  charged  to 
us  in  the  actual  operation  of  the  bank  for  ten  days  or  two  weeks  after 
they  reached  our  paying  banks.  They  often  went  clear  across  the  conti- 
nent. Meantime,  we  were  drawing  interest.  Tlie  longer  they  stayed  out, 
the  better. 

THE    CERTIFIED  CHECK  SYSTEM. 

When  I  first  thought  of  the  certified  check  system,  I  worked  out  a  much 
more  complicated  check  than  was  afterwards  used.  This  check  was  de- 
signed, if  possible,  to  prevent  anyone  else  from  using  that  particular  form. 
On  taking  up  the  matter  of  obtaining  a  patent  for  it,  I  caused  a  prelim- 
inary search  to  be  made,  and  found  there  were  a  dozen  or  more  patents 
practically  knocking  out  the  form  I  had  first  intended  to  adopt.  So  that 
proposition  was  abandoned,  and  never  mentioned  again  in  any  of  our  lit- 
erature, until  it  was  brought  up  as  one  of  the  charges  in  the  indictment 
against  me  alleging  that  as  a  part  of  a  scheme  to  defraud. 

The  check  that  was  finally  worked  out  was  very  simple.  It  did  not  need 
any  red  tape  like  the  registration  of  money  orders.  I  just  had  a  slip 
made  which  read:  "People's  United  States  Bank.  Not  good  over  ten  dol- 
lars. Payable  First  National  Bank,  Chicago;  Park-National  Bank,  New 
York;  Hibernian  Trust  Company,  New  Orleans;  Bank  of  California,  San 
Francisco;  Scandinavian- Ami^rican  Bank,  Seattle,  Washington,"  or  our- 
selves. Then  there  was  a  blank  left  for  the  name  of  the  payee,  and  the 
amount. 

"When  those  orders  came  into  St.  Louis  tliey  cleared  at  the  National 
Bank  of  Commerce.  I  did  not  even  take  the  trouble  to  go  into  the  clear- 
ing-house with  them.  I  did  not  have  to.  Our  check  was  good  anywhere 
in  the  United  States,  because  drawn  upon  the  exchange  centres.  If  used 
in  the  South  it  would  go  to  New  Orleans,  and  be  paid  without  exchange 
charges.  If  remitted  into  the  East  it  would  be  cleared  at  any  New  York 
bank  without  charge,  and  so  on.     I  had  established  a  universal  exchange. 


Interior  Woman's  Magazine  Building 

^Balcony,    Mezzanine   floor     -Entrance   and   grand   stairway,    main    floor 


^Exterior  of  the  conservatory  of  the  Lewis  Publishing  Company  as  seen  by  visitors 
during  the  Worlds  Fair 

'^Interior  of  same  showing  entrance  to   magazine  f'ress  rooms 


THE  DREYFUS  CASE  OF  AMERICA  818 

I  had  reduced  the  money-order  system  practically  to  the  cost  of  printing 
the  checks,  sending  them  out,  and  counting  them  when  they  came  in.  All 
the  machinery  of  correspondence  and  transfer  was  handled  by  the  other 
banks.  In  addition  to  that,  they  paid  us  interest  on  the  money.  We  were 
also  arranging  with  Canadian  banivs  to  extend  the  system  to  Canada,  and 
with  foreign  banks  to  extend  the  system  throughout  Europe.  Ultimately, 
this  certified  check  system  would  have  been  a  universal  international  sys- 
tem. The  American  Bankers'  Association  adopted  this  identical  system 
about  two  years  after  the  destruction  of  the  People's  United  States  Bank, 
copying  it  bodily  from  our  checks,  and  have  widely  advertised  it  as  their 
so-called  Traveler's  Checks. 

This  particular  check  was  what  we  called  the  direct  system.  Farmers, 
merchants,  and  others,  in  rural  districts  and  towns  of  a  few  thousand  in- 
habitants, who  had  no  banking  facilities,  might  have  their  currency  de- 
stroyed by  fire  or  lose  their  money,  or  be  robbed.  To  prevent  all  this  they 
could  send  us,  say,  two  thousand  dollars  in  currency,  and  receive  in  return 
two  hundred  checks,  each  good  for  not  more  than  ten  dollars.  We  did  not 
seek  large  mercantile  remittances.  We  catered  to  the  small  remittances, 
because  that  is  where  the  difficulty  is.  These  checks  were  not  good  until 
filled  in  and  endorsed  by  the  owner.  He  thus  had  his  money  in  such  shape 
that  he  could  remit  to  any  part  of  America,  without  exchange  charges,  to 
pay  his  bills.  Or,  he  could  supply  his  neighbors  with  money  orders.  If 
the  check  was  burned  up  or  otherwise  destroyed  or  lost,  he  would  not  lose 
his  money.  We  simply  required  him  to  give  a  bond  for  a  reasonable  time. 
By  filling  in  the  amount  he  wanted  it  payable  for,  and  endorsing  it  on 
the  back,  he  had  a  money  order  good  anywhere  in  the  United  States,  with- 
out exchange  charges.  ^\'hen  he  used  one  of  these  checks  for  six  dollars 
and  a  half,  and  that  check  came  in  and  was  charged  to  his  account,  there 
would  be  a  balance  in  his  favor  of  three  dollars  and  a  half,  becuse  we  had 
certified  to  a  c'neck  for  ten  dollars.  When  the  total  credits  of  that  kind 
amounted  to  ten  dollars,  he  would  be  entitled  to  another  check.  He  could 
use  all  the  checks  the  first  month,  or  not  use  them  for  one  or  two  years. 
It  was  immaterial  to  us.  When  they  all  came  in,  he  was  entitled  to  ad- 
ditional checks  to  the  amount  of  his  balance,  whatever  it  might  be. 

So  that  a  storekeeper  who,  we  will  say,  lived  in  a  small  village,  sent  in 
two  thousand  dollars,  and  received  our  checks,  had  his  money  in  such  form 
that  he  could  use  it  anywhere  in  the  United  States  for  remittances  or  to 
supply  his  neighbors  with  money  orders.  He  could  use  it  locally  by  mak- 
ing it  payable  to  bearer  or  cash.  If  it  was  burned  or  lost,  he  could  have 
replaced  it.  If  stolen,  it  would  be  a  difficult  thing  for  anybody  to  use. 
It  was  not  like  currency.  It  required  endorsement,  and  carried  the  pen- 
alties of  forgery.     Now,  that  is  what  we  called  the  direct  system. 

The  certified  check  .system  directly  affected  the  express  companies.  It 
knocked  out  the  express  money  order;  for  it  earned  a  profit  for  the  Peo- 
ple's Bank  without  any  charge  for  the  remittance.  It  was  also  in  com- 
petition with  the  postoffice  money  orders,  along  with  the  express  and  tele- 
graph money  orders,  and  bank  drafts.  That  brings  up  the  other  brancli 
of  that  same  remittance  system:  the  establishing  of  agency  banks  through- 
out the  United  States  wherever  there  were  banks  in  the  small  towns  and 
villages.  I  believe  at  that  time  there  were  banks  in  some  fourteen  thousand 
towns  and  cities  in  the  United  States,  and  some  sixty  thousand  towns  and 
villages  had  no  banking  facilities  at  all. 

We  gave  the  small  banks  the  agency  for  our  certified  check  system 
without  charge.  That  gave  them  a  great  advantage  over  the  express  office, 
because  these  banks  hung  up  our  sign  "Money  Orders  Without  Charge 
Here;"  whereas,  the  express  company  sign  meant  money  orders  at  so  much 
apiece.  That  gave  the  bank  a  legitimate  ])usiness  advantage.  We  pointed 
out  that  the  people  who  bought  express  money  orders  became  accustomed 
to  go  into  the  express  company's  office  to  do  business,  and  that  the  express 


814  THE  SIEGE  OF  UNIVERSITY  CITY 

company  immediately  sent  the  money  out  of  town.  But  when  express 
orders  came  into  town  they  were  cashed  at  the  bank  and  the  express  of- 
fice was  thus  practically  carrying  on  its  whole  money  order  business  on 
the  banlt's  money. 

I  do  not  believe  anybody  has  ever  seen  a  very  close  calculation  of  the 
total  business  of  the  express  companies.  I  do  not  believe  the  inside  of  it 
has  ever  been  told.  But,  as  nearly  as  I  can  figure  it  out,  the  express  com- 
panies have  approximately  four  hundred  millions  of  the  people's  money 
all  the  time,  on  their  money  order  system.  They  are  charging  exchange, 
and  the  banks  are  cashing  the  money  orders.  They  are  also  charging  for 
the  operation  of  remitting.  Then  they  are  making  the  interest  on  the 
money.  That  has  been  noticeable  in  the  twenty-five  million  dollar  divi- 
dends which  have  been  declared  once  in  a  while;  whereas,  there  has  been 
a  deficit  in  the  postofTice. 

We  showed  the  agency  banks  that  the  sale  of  oiir  money  orders  would 
bring  people  into  their  bank,  and  make  them  accustomed  to  doing  busi- 
ness there,  instead  of  out  of  town  through  the  express  companies,  and  that 
the  first  thing  they  knew  those  people  would  go  back  and  dig  up  the  wad 
of  savings  that  they  had  hidden  out  in  the  woodshed,  or  in  an  old  kettle 
somewhere,  and  place  it  in  that  bank.  The  privilege  of  selling  those  money 
orders  would  have  been  worth  something,  but  the  banks  did  not  have  to 
pay  anything  for  it.  They  would  shnply  sell  those  checks  in  any  desired 
amount,  fill  them  up  with  the  name  and  amount,  detach  and  stamp  them 
with  the  bank's  counter-signature,  and  hand  them  over  in  exchange  for  the 
money. 

The  agency  bank  agreed  to  accept  the  money  on  deposit  to  our  credit 
at  three  per  cent  interest.  They  further  agreed  that  they  would  remit 
any  part  of  our  balance  to  the  paying  bank  in  their  section  without  charge 
on  demand.  Meantime,  they  had  the  use  of  that  money,  whereas  the  ex- 
press companies  would  have  sent  it  right  out  of  town  the  same  day.  The 
agency  banks  had  the  use  of  our  balance,  and  could  build  it  up  as  big  as 
they  wanted  to  at  three  per  cent,  thus  keeping  the  money  in  their  own 
town,  and  getting  these  people  to  do  business  with  them.  The  sole  con- 
ditions were  that  they  must  pay  three  per  cent,  and  transfer  the  money 
without  charge  to  the  exchange  bank  on  demand.  That  was  part  of  the 
contract.  Furthermore,  they  had  to  report  to  us  weekly  on  those  checks. 
They  could  not  deceive  us,  because,  when  the  checks  came  back  from  the 
paying  banks,  the  dates  and  the  amounts  were  there  to  show.  They  had 
to  credit  us  with  the  deposit  the  time  they  received  it,  because  the  check 
bore  that  date. 

It  was  ordinary  and  simple  as  it  could  be.  We  merely  supplied  them 
with  a  new  book  of  checks  whenever  the  old  book  had  been  used  up,  and 
they  returned  to  us  the  stubs  to  be  checked  up  against  the  returned  checks. 
The  persons  who  got  checks  on  the  local  bank  did  not  have  to  tell  the 
banker  their  business,  or  what  they  were  going  to  use  the  checks  for,  as 
they  would  have  had  to  do  with  the  money  order.  The  checks  were  made 
out  to  their  order,  and  they  could  keep  the  money  in  that  shape  if  they 
pleased,  and  remit  it.  It  made  a  imiversal  system  of  remittance  through- 
out the  United  States. 

The  small  banks,  from  Maine  to  California,  grasped  that  very  quickly, 
and  we  received  a  large  number  of  commendatory  letters  on  that  system. 
It  was  a  perfect  system  of  equalization,  because  we  really  never  had  to 
transmit  the  currency.  We  struck  a  balance  between  the  East,  West,  North 
and  South.  It  was  only  the  difference  that  had  to  be  transmitted.  In  case 
of  overdraft,  a  New  York  bank  would  issue  checks  on  the  Chicago  bank, 
or  the  Chicago  bank  would  send  the  checks  on  to  San  Francisco.  The 
check  moved,  but  the  money  did  not  move. 

The  source  of  profit  to  this  bank  grew  out  of  the  fact  that  on  a  fair 
average  eighty  per  cent  of  the  money  would  always  be  drawing  interest. 


THE  DREYFUS  CASE  OF  AMERICA  315 

On  a  million  dollars  of  these  checks  outstanding,  at  least  eight  hundred 
thousand  dollars  would  be  drawing  interest,  either  at  three  per  cent  at 
the  issuing  banks,  or  two  per  cent  at  the  paying  banks.  On  a  sale  of  one 
hundred  millions  of  these  checks,  our  interest  would  average,  say,  two  and 
a  half  per  cent,  on  eighty  millions.  The  profit  to  the  bank  would  have 
been  ahnost  as  much  as  on  the  capital  of  the  bank,  and  would  have  come 
from  the  interest  on  money,  while  the  check  was  in  transit  without  charge 
to  the  remitter. 

This  plan  was  in  operation  all  over  the  United  States  at  the  time  the 
bank  was  struck  down.  Many  certified  checks  were  outstanding.  That 
business  was  accumulating  very  rapidly.  The  fact  that  it  was  profitable 
is  shown,  because  it  has  been  taken  up  all  over  the  United  States  by  other 
banks.  The  People's  United  States  Bank  put  the  actual  currency  into 
circulation  because  a  person  buying  one  of  our  checks  would  receive  a 
certificate  for  the  currency.  His  deposit  was  put  in  the  paying  bank  and 
thus  got  into  circulation. 

PROFIT-SHARING  DEPOSIT  SYSTEM. 

Another  feature  of  the  bank  was  our  profit-sharing  certificates  of  de- 
posit. We  did  not  want,  and  would  not  take,  an  ordinary  mercantile  check- 
ing account.  This  bank  was  designed  to  supplement,  and  not  to  compete 
with,  the  ordinary  bank.  The  only  two  classes  of  deposits  that  we  had 
were  the  certified  check,  and  the  profit-sharing  certificate. 

In  our  prospectus  "Banking  by  Mail,"  we  proposed  to  buy  bond  issues, 
and  resell  them  to  our  nnm.erous  clientele  all  over  the  country;  but  on 
advising  with  bankers,  particularly  Mr.  Perry  Jay  of  the  Old  Colony 
Trust  Company,  we  concluded  that  we  could  not  hope  to  do  that  kind  of 
business  successfully.  We,  therefore,  changed  to  the  certificate  of  deposit 
plan  by  which  the  People's  United  States  Bank  would  purchase  bonds  and 
retain  them,  but  would  issue  against  them  certificates  of  deposit  to  the 
parties  desiring  to  invest  their  savings.  Hence,  the  People's  United  States 
Bank  never  had  but  one  thing  to  sell  other  than  its  certified  checks,  and 
that  was  this  certificate  of  deposit  backed  by  its  entire  assets,  including 
its  capital.  That  would  enable  us  to  purchase  large  bond  issues,  because 
the  certificates  of  deposit  would  run  from  one  to  ten  years.  With  its  sav- 
ings deposits  tied  up  on  such  long  terms  this  bank  would  be  in  a  position 
to  buy  bond  issues.  On  the  other  hand,  if  a  bond  issue  for  any  reascdl 
was  not  successful,  and  the  very  best  bankers  in  the  world  sometimes  get 
stuck  on  bonds,  the  loss  would  fall  on  the  bank  and  the  savings  depositor 
would  not  lose  one  dollar  until  the  entire  capital  of  the  bank  was  wiped 
out. 

Those  certificates  of  deposit,  instead  of  bearing  a  stated  rate  of  interest, 
participated  pro  rata  in  the  profits.  I  believed  that,  as  the  depository  of 
enormous  cash  deposits  tied  up  on  long  time  certificates  of  deposit  with- 
out any  guaranteed  rate  of  interest,  when  the  day  of  reckoning  came,  our 
bank  could  buy  and  sell  all  the  rest  of  them  put  together.  It  had  the 
money  without  any  guaranteed  rate  of  interest  and  had  it  for  long  periods 
of  time.  The  average  period  of  time  for  which  these  certificates  of  deposit 
were  taken  out  was  in  excess  of  seven  years.  In  practice,  we  would  not 
decline  to  cash  a  certificate  of  deposit  if  a  customer  needed  the  money, 
but  in  case  of  a  financial  panic  the  bank  would  have  had  that  right.  I 
figured  that  a  great  panic  would  be  tlie  very  time  in  which  the  liank  would 
make  its  money.  Other  banks  would  be  drained  of  every  dollar,  but  here 
was  a  bank  with  deposits  tied  up  for  a  fixed  period  of  time  that  could 
come  to  the  assistance  of  others.  We  could  have  come  to  the  assistance 
of  our  paying  and  agency  banks  by  letting  our  funds  remain  with  them, 
instead  of  adding  to  their  distress  by  withdrawing  our  funds  and,  nat- 
urally, we  might  have  received  a  little  higher  rate  of  interest  and  a  few 
perquisites  on  the  side. 

The  certificate  of  deposits  shared  in  the  earnings  of  the  bank.     A  plan 


316  THE  SIEGE  OF  UNIVERSITY  CITY 

was  set  forth  on  its  face  whereby,  if  the  total  deposits,  capital  and  sur- 
plus were  added  at  the  end  of  the  fiscal  year,  after  setting  aside  a  reserve 
for  sinking  fund  and  for  taxes,  the  net  earnings  were  pro  rated  on  the 
sum  total.  That  would  determine  the  rate  of  interest  which  the  certificate 
of  deposit  would  get.  That  was  the  only  kind  of  deposit  that  was  to  get 
any  interest.  The  remittance  deposits  and  the  checking  deposits  drew  no 
interest,  even  if  they  lay  there  for  years.  AVe  will  say,  just  for  illustra- 
tion, that  the  capital  of  the  bank  was  five  million  dollars  and  the  surplus 
three  million,  and  that  the  certificates  of  deposit  were  ten  million  dollars; 
but  that  the  certified  check  system  or  money  order  business,  which  was 
designed  to  be  the  great  business  of  the  bank,  was  twenty  millions.  That 
would  make  thirty-eight  millions  total  capital  and  deposits  of  all  kinds 
and  surplus.  Now,  we  will  say,  just  for  illustration,  that  it  earned  ten 
per  cent  net,  whicli  would  be  three  million,  eight  hundred  thousand  dollars. 
It  would  look  at  first  as  though  the  stock  and  surplus  would  not  get  a  fair 
deal  in  this,  but  you  will  see  how  it  does.  If  the  earnings  were  ten  per 
cent  net,  that  percentage  on  the  certificates  of  deposit  would  be  one  mil- 
lion dollars,  or  nearly  fifty  per  cent  of  the  capital  and  surplus  as  their 
profits.  Yet  the  depositor  would  have  received  a  full  and  fair  percentage 
of  the  earnings  of  the  bank,  viz.,  the  percentage  which  his  deposit  bore  to 
the  entire  amount  earned. 

These  profit-sharing  certificates  of  deposit  were  issued  on  all  savings 
accounts  as  soon  as  they  amounted  to  fifty  dollars.  They  bore  on  the  re- 
verse side  a  trust  clause  so  worded  as  to  constitute  a  trusteeship.  The 
owner  could  fill  in  the  name  of  any  person  he  chose  and  at  any  time 
he  could  cross  that  name  out  and  fill  in  another  on  the  line  below  and 
sign  it.  The  death  of  the  owner  immediately  vested  the  ownership  of 
that  certificate  of  deposit  in  the  last  person  named  in  the  trust  agree- 
ment. The  purpose  of  this  was  to  enable  the  beneficiary  to  collect  the 
money  promptly.  Ordinarily,  if  a  person  who  was  saving  for  a  member 
of  his  family  died  suddenly,  leaving  a  sum  of  two  hundred  or  three 
hundred  dollars  saved  up  in  a  certificate  of  deposit,  it  might  necessitate 
the  appointment  of  an  executor  and  other  legal  proceedings  which  would 
eat  up  a  considerable  amount  of  the  savings.  Furthermore,  there  would 
probably  be  a  delay  of  perhaps  months  in  getting  the  deposit.  On  this 
plan  the  death  of  the  owner  of  the  certificate  immediately  vested  the 
ownership  in  the  person  last  named.  That  plan  has  since  been  adopted 
by   many   savings    banks. 

Another  feature  of  this  bank  in  connection  with  savings  deposits  was 
the  sending  to  the  savings  depositors  throughout  the  United  States,  par- 
ticularly in  the  small  towns,  a  pressed  steel  bank  made  in  the  form  of 
the  proposed  bank  building.  The  depositor,  however,  did  not  get  the  key 
to  this  savings  bank.  The  pass  keys  to  all  the  banks  in  any  neighborhood 
were  sent  to  the  local  express  agent  or  the  local  postmaster.  Whenever 
the  bank  was  full,  the  owner  could  take  it  to  whoever  had  the  key,  and 
he  would  unlock  the  bank  and  issue  a  money  order  for  its  contents, 
payable  to  the  People's  United  States  Bank.  That  scheme  has  also  been 
adopted  and  is  in  use  in  certain  savings  banks  today.  I  put  it  into  use 
throughout  the  United  States  in  connection  with  the  express  companies 
and  postoffices.  The  money  could  not  be  taken  out  of  that  bank  except 
by  our  agent,  wlio  issued  a  money  order  to  us  for  it,  his  consideration 
being   the   profit   on   the   money   order. 

SAFETY    DEPOSIT    PLANS. 

Another  element  of  the  bank  was  the  safety  deposit  system.  The 
great  bulk  of  these  people  through  the  United  States  had  no  safe  or 
safety  deposit.  I  worked  out  a  system  whereby  our  customers  could  rent 
a  safety  deposit  box  of  us  for  a  year.  The  bank  sent  out  a  heavy  manila 
envelope  containing  an  extra  envelope  inside.  The  customer  sealed  up 
in  that  his  insurance  papers,  mortgages,  notes   and  other  valuables   and 


Lewis  Publishing  Company,  Magasine  Press  Building 
^Artists'  studio     -Photographic  studio 


'^Office  of  Cal  J.  McCarthy,  Advertising  Manager,   Lewis  Publishing 
saniiie   Hoor,    Woman's   Magazine   Building 
"OfUce  of  accounting  department,  ground  floor 


Company,   Me:; 


THE  DREYFUS  CASE  OF  AMERICA  319 

sent  it  by  registered  mail  to  the  bank.  The  registry  receipt  of  the  United 
States  postoflfice  returned  was  the  customer's  receipt  for  it.  The  envelopes 
were  filed  under  the  number  of  the  registry  receipt  issued  by  the  Govern- 
ment itself.  A  customer  wanting  to  get  the  contents  of  an  envelope 
would  send  in  his  registry  receipt  and  we  would  return  the  envelopes  by 
registered  mail,  deliverable  only  to  the  addressee.  The  bank  never  opened 
the  envelopes.  The  customer  opened  them,  took  out  whatever  he  wanted 
to  examine,  sealed  up  the  remaining  papers  in  the  inner  envelope  and 
returned  it  to  the  bank.  Under  tliat  plan  an  ordinary  safety  deposit 
box  which  would  earn  under  the  usual  plan  not  over  two  to  five  dollars, 
would  earn  us  twenty  to  thirty  dollars  a  year,  because  it  would  hold  ten 
to  fifteen  of  these  envelopes. 

COLLATERAL  LOAN  FEATURE. 

Then  came  the  collateral  loan  feature.  I  proposed  and  carried  out 
a  collateral  loan  system  parallel  to  that  of  the  Mont  de  Piete  of  France. 
Any  customer  of  the  bank  who  was  in  distress  could  send  to  the  bank 
by  registered  mail  either  bullion,  valuables,  jewelry,  heirlooms,  or  any- 
thing of  that  sort.  They  would  be  appraised  for  their  bullion  value. 
We  had  special  appraisers  in  the  city  of  St.  Louis,  W.  M.  Gill  and  Mer- 
mod-Jaccard,  who  agreed  to  take  for  cash  these  articles  at  their  ap- 
praisal. The  bank  then  loaned  sixty  per  cent  or  eighty  per  cent  of  tlieir 
appraised  value  for  from  one  to  two  years'  time  at  eight  per  cent.  When 
valuables  on  which  a  loan  was  asked  of,  say,  one  hundred  dollars,  had 
been  received  and  appraised,  and  after  tlie  loan  was  made,  we  issued 
a  draft  for  the  one  hundred  dollars  attached  to  a  note  citing  the  collat- 
eral. The  customer  had  to  sign  the  note  in  order  to  cash  the  draft. 
When  that  came  back  through  the  clearance  it  was  filed  with  the  col- 
lateral and  completed  the  record.  We  agreed  that  if  the  interest  was 
not  paid  at  the  end  of  the  two  years  we  would  carry  it  at  least  a  year 
longer  before  selling.  We  allowed  a  sufficient  margin  in  making  the 
appraisal  to  cover  any  such  interest.  The  bank  loaned  its  savings  funds 
on  this  plan  on  gold  bullion  at  a  safe  percentage  of  its  own  appraisal, 
at  eight  per  cent  per  annum  interest.  It  gave  to  the  people  through  the 
entire  United  States  the  same  accommodation  as  the  people  of  France 
have  in  the  Mont  de  Piete,  where  the  loans  amount,  I  believe,  to  seven 
hundred  million  dollars. 

We  thought  that  any  one  having  personal  collateral  and  desiring  a 
small  loan  was  just  as  much  entitled  to  it  as  though  it  was  a  brown  stone 
house,  and  instead  of  having  to  go  to  a  pawnshop  or  a  local  note  shark 
to  make  that  loan,  he  could  transmit  that  collateral  to  our  bank  by 
registered  mail  or  express.  At  the  end  of  two  years,  if  the  loan  was 
not  paid,  this  collateral  belonged  to  the  bank,  and  could  be  melted  up 
as  bullion  or  sold  at  auction,  as  is  done  in  the  bank  referred  to  in  France. 
Our  security  was  the  best  and  the  rate  of  interest  very  high.  But  it 
was  an  infinitesimal  part  of  what  that  person  would  have  had  to  pay  in 
a  pawnshop.  This  was  not  restricted  at  all.  Anybody  could  borrow  of 
this  bank  in  sums  from  fifty  dollars  up,  and  this  plan,  although  but  a 
short  time  in  operation,  was  becoming  rapidly  successful.  Small  loans 
were  being  applied  for  from  various  parts  of  the  United  States. 

I  will  state  frankly,  that  that  particular  feature  of  the  bank  was 
incorporated  into  it,  because  of  the  fact  that  early  in  the  building  up 
of  the  Woman's  Magazine  and  the  Winner  Magazine  I  reached  a  point 
where  I  had  exhausted  my  available  cash  resources;  so  I  took  Mrs.  Lewis's 
jewels,  and  what  valuables  of  that  sort  I  had,  and  went  down  to  the 
corner  of  Eighth  and  Pine  streets,  in  St.  Louis,  and  stood  on  the  opposite 
corner  there  for  perhaps  half  an  hour  looking  up  and  down  the  street  to 
see  if  anybody  I  knew  was  in  sight.  Then  I  butted  into  the  pawnshop 
there  and  borrowed  the  necessary  money  on  them.  I  do  not  believe  I 
will  ever  forget  that  sensation.     I  was  just  as  much  entitled  to  borrow 


320  THE  SIEGE  OF  UNIVERSITY  CITY 

that  money  from  any  bank  in  America  as  I  wa3  entitled  to  borrow  hun- 
dreds of  thousands  from  those  same  banks  on  much  less  secure  collateral 
later. 

So  I  determined,  when  I  organized  this  bank,  which  was  primarily 
designed  to  be  a  bank  of  and  for  the  people,  exactly  suited  in  its  features 
to  the  popular  needs  and  requirements,  that  these  features  should  bri 
incorporated  in  it,  and  they  were.  The  Provident  Loan  Company  of 
New  York  is  established   along  the  same  lines. 

That  feature  gave  this  bank  an  enormous  outlet  for  its  money.  It 
was  very  widely  availed  of  all  over  the  United  States.  In  fact,  it  grew 
to  be  an  immense  department.  We  had  a  vault  that  we  filled  with  gold, 
jewels,  heirlooms,  diamonds,  etc.,  on  which  we  had  loaned  a  percentage 
of  the  actual  appraisal,  as  made  for  us  by  assayers  and  experts.  Those 
loans  were  secured  practically  by  gold  bullion  at  eight  per  cent  interest 
per  annum — absolutely  secured.  I  was  somewhat  criticized  by  some  of 
the  bankers  in  St.  Louis  for  that  feature.  My  reply  to  that  criticism 
was  that  if  they  would  lay  out  on  a  table  the  collateral  behind  their  loans 
in  their  banks,  I  would  lay  this  gold  bullion  collateral  alongside  of  it, 
and  let  anybody  judge  as  to  which  was  the  most  secure. 

Such  in  part  were  Lewis'  views  as  to  the  conditions  which  in  his 
opinion  seemed  to  call  for  a  popular  mail  banking  institution,  and 
such  were  his  aims  and  purposes  in  that  behalf.  This  chapter  may 
be  properly  brought  to  a  close  by  one  of  his  characteristic  utter- 
ances in  the  Woman's  IVIagazine,  touching  the  motives  which  actuated 
him  in  embarking  on  this  undertaking. 

THE    QUESTIOX    OF    MOTIVE. 

Was  Lewis  sincere  in  the  belief  that  he  could  accomplish  his  de- 
sign .''  Did  he  actually  suppose  that  he  could  fulfill  the  expectations 
rising,  logically,  from  his  promotion  literature?  Was  the  project 
feasible?  Could  the  problem  have  been  worked  out  in  due  course 
to  the  mutual  satisfaction  of  Lewis  and  those  who  became  asso- 
ciated with  him  in  this  undertaking?  All  of  these  are  questions, 
the  answer  to  which  must  be  deduced  not  only  from  due  considera- 
tion of  the  nature  of  the  scheme  itself,  but  also  by  taking  into 
account  the  history  of  all  his  manifold  activities.  These  questions 
do  not  admit  of  off-hand  answers.  Whoever  seeks  to  conscientiously 
arrive  at  a  true  insight  must  proceed  most  carefully.  He  must  at 
all  times  keep  himself  on  guard  lest  from  any  quarter  some  precon- 
ception, some  prejudice  or  some  bias  should  enter  in.  The  following 
chapter  will  take  up  the  actual  history  of  the  People's  Bank  chiefly 
upon  the  basis  of  its  official  minutes.  Then  the  narrative  pkinges 
directly  into  the  storm-centre  of  the  ensuing  controversy.  The  fol- 
lowing is  Lewis'  version  of  his  own  motives: 

I  have  been  asked  many  times  why  I  am  founding  the  People's  Bank. 

I  will  answer  this  way:  I  have  the  largest  publication  in  the  world. 
I  have  the  finest  printing  plant  in  the  world.  I  have  an  annual  income 
of  a  quarter  of  a  million  dollars.  I  have  the  dearest  wife,  the  most  beau- 
tiful home,  the  best  of  friends,  the  most  noble  parents  any  man  ever  had. 
I  have  worked  and  fought  for  it  all.  I  cannot  take  any  of  it  with  me 
when  I  die.  I  can  only  eat  one  meal  at  a  time.  One  overcoat  is  all  I 
can  wear  if  I  had  fifty  million  dollars.  I  have  all  a  man  could  reason- 
ably want.  But  to  me  the  greatest  happiness  on  earth  is  working  out 
the  details  of  a  great  undertaking,  and  the  bank  is  certainly  that. 


THE  DREYFUS  CASE  OF  AMERICA  321 

I  would  rather  sit  here  night  after  night  and  read  the  letters  I  receive, 
than  sail  the  southern  seas  in  the  biggest  yacht  in  the  world.  Every  man 
must  get  his  own  happiness  from  inside  himself.  He  can  only  get  it 
in  one  way,  and  that  is  by  doing  what  he  thinks  and  knows  to  be  right. 
Every  one  of  us  has  been  put  here  for  a  purpose.  He  must  find  that  pur- 
pose, and  on  the  way  he  must  use  his  opportunities  to  do  good  and 
develop  his  own  character  and  help  others.     On  this  he  will  be  judged. 

Exceptional  opportunities  give  rise  to  exceptional  deeds.  I  have  been 
given  such  opportunities  in  being  able  not  only  to  plan,  but  to  carry  into 
practice  my  plans,  for  a  great  publication,  for  a  great  publishing  plant, 
for  a  beautiful  city.  Great  blessings  have  been  showered  upon  me.  I 
have  the  love,  trust  and  confidence  of  almost  a  whole  nation  of  men  and 
women.  Now  I  have  the  opportunity  to  do  something  for  them  in  the 
establishment  of  the  People's  Bank  that  shall  afford  comfort,  conven- 
ience and  safety  to  hundreds  of  thousands  of  homes. 

I  have  enough  money  and  to  spare.  Shall  I  turn  and  gorge  myself 
with  physical  pleasures  and  live  the  rest  of  my  life  regretting  the  results? 
Or  shall  I  do  this  thing  that  my  conscience  tells  me  has  been  placed  in 
my  hands  to  do  for  my  fellow  men  and  women?  Shall  I  take  my  quarter 
of  a  million  dollars  a  year  and  become  a  lazy,  useless  beast,  a  curse  to 
myself  and  to  others?  Or  shall  I  go  on  to  still  greater  achievements 
and  gain  the  love,  respect  and  confidence  of  two  million  families,  by 
giving  them  greater  facilities?  I  shall  not  suffer  in  so  doing.  This  bank 
associated  with  my  beloved  magazine  will  so  strengthen  it  that  its  income 
from  advertising  will  double.  Shall  I  use  my  money  on  myself  alone, 
lose  the  respect  and  good  wishes  of  my  readers,  and  thus  destroy  even 
my  magazine?  Or,  shall  I  make  both  myself  and  them  more  powerful 
and  profitable  by  using  this  increased  income  to  give  better  and  better 
things?  Shall  I  hold  and  keep  the  respect  of  my  five  hundred  employees? 
Or  shall  I  become  a  laughing  stock  to  them  all?  In  a  word,  shall  I 
make  and  keep  myself  a  man,  clean  and  strong  by  the  reflection  of  the 
good  wishes,  love  and  respect  of  my  two  million  readers,  or  shall  I  be 
like  a  dog?  Do  you  think  that  I  would  exchange  the  twenty  thousand 
letters  I  have  received  in  the  past  two  weeks  for  twenty  thousand  silver 
dollars,  that  would  not  add  a  speck  to  my  happiness  and  usefulness? 
What  would  you  do  if  you  were  in  my  place?  I  tell  you,  I  would  rather 
be  president  of  the  People's  Bank  than  President  of  the  United  States. 


CHAPTER  XIV. 

THE  POST-DISPATCH  EXTRA. 

The  Story  of  Curtis  Betts — Get  The  Story — The  Citation  Is 
Received — Details  of  Report  Asking  Fraud  Order — The 
Siege  Begins — The  P.-D.  Follow-Up  Campaign — Swang- 
er's  Famous  Demands — Lewis'  Call  To  Arms — The  First 
War  News — Alignment  for  Battle. 

To  All  Agents: 

This  issue  of  the  Post-Dispatch  contains  one  of  the  most  astounding 
news  stories  of  the  decade. 

The  people  directlr  interested  in  the 

PEOPLE'S  BANK 
are  not  confined  to  St.  Louis,  but  live  in  all  parts  of  America.  It  is  not 
improbable  that  many  people  in  your  own  town  have  sent  money  to  this  in- 
stitution. There  will  consequently  be  a  great  demand  for  this  issue  of  the 
Post-Dispatch  which  presents  the  great  news  story  exclusively.  The  demand 
for  today's  paper  will  continue  for  some  time  after  this  date. 

Push  your  sales. 

St.  Louis  PosT-DispATCH. 

On  Mny  31,  1905,  the  above  notice  was  printed  by  the  St.  Louis 
Post-Dispatch  in  the  form  of  a  hand  bill  and  distributed  widely 
to  news  agents  throughout  the  Central  West.  In  that  issue  the 
secret  confidential  Government  report  of  the  postoffice  inspectors 
upon  the  People's  United  States  Bank,  recommending  the  issuance 
of  a  fraud  order  against  Lewis  and  the  bank,  was  published  to  the 
world. 

This  is  a  mighty  effect  to  be  produced  by  the  pen  of  a  ready 
writer.  This  is  a  vast  turmoil  to  be  brought  upon  lawyers,  judges, 
congressmen,  senators,  and  the  President  himself,  amid  a  whirl  of 
popular  indignation  and  fury.  Yet,  all  this  was  set  in  motion  by 
the  tap-tap  of  a  typewriter  in  the  small  hours  of  a  ]\Iay-day  morn- 
ing. The  great  bank  upon  which  Lewis  and  his  friends  had  set 
their  hearts  and  hopes  was  lightly  sacrificed  by  a  smart  news-gath- 
ering reporter  for  the  sake  of  a  good  story  to  be  spread  upon  the 
pages  of  a  sensation-loving  newspaper ;  and  thrown  out  by  its  newsies 
broadcast  over  the  land. 

How  was  it  that  the  Post-Dispatch  reporter  obtained  access  to 
the  sacred  report  of  the  United  States  postoffice  inspector?  Was 
it  by  allowable  keenness?  Or,  was  it  by  unjustifiable  trickery?  Or, 
was  it  perhaps,  by  the  dishonest  connivance  of  a  Government  offi- 
cial, for  some  effect  that  he  or  his  superiors  wished  to  produce? 
These  documents,  the  inspectors'  reports  on  the  good  faith  of  pri- 
vate enterprises,  are  regularly  regarded  as  inviolable.  They  are 
sometimes  withheld  even  from  Congress,  upon  the  ground  that  they 

322 


THE  DREYFUS  CASE  OF  AMERICA  323 

are  privileged;  that  their  disclosure  would  be  contrary  to  public 
policy.  The  St.  Louis  inspectors  in  the  examination  soon  afterwards 
demanded  by  Lewis,  and  directed  by  the  chief  inspector  at  Wash- 
ington, denied  under  oath  all  knowledge  as  to  how  this  leak  occurred- 
The  inspector,  Col.  W.  T.  Sullivan,  who  was  directly  responsible 
for  its  Avording  and  safe-keeping,  was  either  away,  or  was  excused, 
or  evaded  the  questions  under  oath,  but  stated  positively  that  he 
had  no  personal  knowledge  of  how  the  copy  of  the  report  had 
been  obtained.  He  has  since  died.  Betts  refused  to  answer  all 
questions.  He  said  the  way  he  got  that  report  was  his  business. 
Many  were  the  guesses.  But  the  incident  was  finally  set  down  as 
one  of  the  unsolved  mysteries  of  journalism.  Lewis'  libel-suit 
against  the  Post-Dispatch  closed  the  mouth  of  its  employees.  The 
secret  was  apparently  destined  to  be  kept  forever. 

But  Congress  deemed  otherwise.  The  United  States  House  of 
Representatives'  Committee  on  Expenditures  in  the  Postoffice  Depart- 
ment was  in  session  on  the  morning  of  November  17,  1911,  at  the 
Hotel  Jefferson,  one  of  the  largest  and  best  hostelries  in  St.  Louis. 
The  Red  Room  on  the  first  floor  above  the  ground  was  crowded  witb 
witnesses,  lawyers,  spectators.  The  committee  sat  in  solemn  state 
around  the  long  table,  the  chairman  at  the  head.  To  the  right,  in 
the  middle,  Lewis  leaned  forward,  expectant,  or  whispered  to  Gen- 
eral Madden  on  his  left.  An  empty  chair  stood  at  the  further  end 
for  ■witnesses  still  to  be  examined.  Hon.  William  Ashbrook  of 
Ohio,  a  man  of  noble  presence,  tall,  erect,  with  large,  clear  face 
and  oj'cn  brow,  rose  sloAvly  to  his  feet  about  ten  a.  m.  and  pro- 
nounced the  name  of  the  next  witness;  "Curtis  Betts." 

A  hush  fell  on  the  crowded  courtroom.  Silence  was  broken  only 
by  the  stir  caused  by  the  entrance  of  the  man  whose  hand  had 
been  more  instrumental  than  any  other  in  striking  down  the  People's 
Bank  from  a  brilliant  anticipation  and  an  almost  accomplished  hope, 
into  absolute  and  apparently  irretrievable  ruin.  The  moment,  then, 
when  Betts  was  sworn  with  uplifted  hand  as  a  witness  to  tell  the 
truth,  the  whole  truth  and  nothing  but  the  truth,  was  tense  with 
dramatic  interest.  Was  his  six  years'  silence  at  last  to  be  broken? 
Or,  would  he  still  refuse  to  testify,  and  thus  compel  a  summons 
before  the  bar  of  the  House  of  Representatives,  or  perhaps  the 
exercise  of  punitive  measures  to  bring  forth  his  testimony?  Would 
the  committee  decide  to  proceed  to  these  lengths  to  get  the  truth, 
in  the  event  of  the  witness's  continued  silence? 

THE   STORY   OF    CURTIS    BETTS. 

The  momentary  pause,  when  the  witness,  after  having  been  sworn, 
settled  himself  back  in  his  chair  and  made  ready  for  the  first  in- 
quiry, was  breathless  with  the  anticipated  interest.  This,  indeed, 
may  yet  stand  out  as  among  the  deciding  moments  in  the  lives  of 
men  and  nations,  such  as  the  confession  of  the  writing  of  the 
infamous  "Bordereau"  by  Esterhazy  in  the  Dreyfus  case,  or  the 
confession  of  forgery  by  Pigott  in  the  Parnell  affair.     Almost  as 


324  THE  SIEGE  OF  UNIVERSITY  CITY 

great  was  it,  in  its  way,  as  the  moment  in  which  Washington  decided 
to  fight,  or  Jefferson  to  frame  his  famous  constitution.  At  the 
Hotel  Jefferson,  the  Congress  of  the  United  States  had  determined 
to  obtain  the  truth  as  between  the  postoffice  and  the  People's  Bank. 
A  vital  fact  was  in  the  brain  of  Curtis  Betts;  in  his  memory.  It 
was  on  the  tip  of  his  tongue.  Would  it  come  forth?  Would  he 
disclose  the  real  secret?     On  whom  would  he  fix  the  blame? 

Slowly,  yet  fully,  like  the  first  clear  streak  of  dawn,  after  a  long 
dark  night,  the  light  of  truth  penetrated  into  the  heart  of  this 
much  vexed  controversy,  when,  with  every  appearance  of  frankness 
and  candor,  Betts,  in  a  clear,  controlled  voice  told  the  following 
simple,  yet  amazing  story. 

My  name  is  Curtis  A.  Betts.  I  reside  at  Richmond,  Missouri,  where  I  am 
publisher  of  a  newspaper.  I  was  connected  with  the  Post-Dispatch  for  a 
little  over  seven  years,  and  was  in  its  emplor  when  the  so-called  exposures 
of  the  Lewis  enterprises  came  out.  I  obtained  the  information,  and  wrote 
the  article  which  was  first  published  in  the  Post-Dispatch.  A  newspaper 
man  never  likes  to  tell  how  he  secured  information.  But  I  will  say  that  I 
obtained  what  I  understood  to  be  a  copy  of  the  postoffice  inspectors'  report. 
I  based  the  article  on  that. 

I  first  saw  the  report  in  the  hands  of  Inspector  W.  T.  Sullivan.  I  had 
been  working  on  him  as  well  as  other  inspectors  for  several  days  to  get  a 
copy  of  that  report.  They  had  repeatedly  refused  to  let  me  see  it.  I  was 
doing  everything  in  my  power  to  get  it.  One  day  when  I  went  into  the 
office,  I  was  told  that  Inspector-in-Charge  Fulton  was  out  of  town.  I  then 
asked  Inspector  Stice,  as  I  had  done  before,  to  let  me  see  the  report.  He 
refused.  Inspector  Sullivan  was  temporarily  in  charge.  He  was  sitting  in 
Fulton's  office.  I  went  in  there  and  again  asked  him  for  a  copy  of  the 
report.    Again  he  told  me  he  could  not  let  me  have  it. 

I  then  said,  "Fulton  has  gone  to  Washington  with  the  report,  hasn't  he?" 
Sullivan  replied  that  he  had.  I  said,  "Well,  I  guess  you  have  a  copy  of  it 
here,  haven't  you?"  He  replied,  "Yes."  Then  he  pulled  open  a  drawer  of 
his  desk  and  held  up  a  document.  He  put  it  back  in  the  drawer,  which 
was  closed  about  half  way;  and  then  said,  "Excuse  me,  I  have  to  go  into 
the  other  room  a  moment."  I  did  not  think  I  was  stealing  the  report  when 
I  took  it  out  of  the  drawer,  kept  it  a  few  hours  and  then  returned  it  to  the 
same  place. 

I  think  I  got  that  information  in  an  entirely  proper  way.  If  I  had  not 
thought  that  Colonel  Sullivan  intended  me  to  have  it,  by  his  actions  and  by 
everything  that  occurred  there  that  day,  I  would  not  have  taken  it.  It  was 
my  understanding  that  he  left  the  room  for  that  purpose.  I  could  not  con- 
strue it  in  any  other  way.  My  recollection  is  that  it  was  not  necessary  to 
open  the  drawer.  He  had  not  closed  it.  He  may  have  shoved  the  drawer 
up  a  little.  But  it  was  not  anywhere  near  closed.  I  remember  that.  It  was 
not  necessary  for  me  to  touch  the  drawer  to  get  out  the  report.  Tliis  is  the 
first  time  that  I  have  disclosed  the  facts  to  anybody  who  was  investigating 
this  case.  I  have  told  one  or  two  people.  When  the  postoffice  authorities 
inquired,  I  simply  refused  to  talk. 

I  had  a  number  of  conferences  with  Inspector  Sullivan  after  that,  but  I 
never  mentioned  to  him  that  I  had  got  the  report,  nor  did  he  ever  ask  the 
question.  My  understanding  was  that  he  knew  I  had  taken  it  and  kept  it 
until  the  following  morning,  and  that  it  was  done  with  his  knowledge  and 
consent.  My  interpretation  was  that  when  Sullivan  pulled  it  out  and  showed 
it  to  me,  then  put  it  in  the  drawer  and  said,  "Excuse  me,  I  have  to  go  out 
of  the  room,"  his  action  M'as  intended  as  sufficient  notice.  I  think  he  did 
that  deliberately,  and  left  the  room  for  no  other  purpose  than  to  give  mc 


THE  DREYFUS  CASE  OF  AMERICA  325 

that  opportunity.  I  thought  so  at  that  time,  and  I  think  so  today.  I  had 
told  the  inspectors  frequently  that,  if  I  could  get  the  report,  nobody  should 
ever  know  how  I  got  it.  Sullivan  afterwards  cautioned  me  not  to  divulge 
the  source  of  my  information.  I  thanked  him  for  giving  me  the  opportunity 
to  publish  it,  and  he  said  in  substance,  "I  used  to  be  one  of  the  boys  myself. 
I  am  an  old  newspaper  man.  When  I  can  help  them,  I  am  very  glad  to 
do  it." 

I  immediately  took  the  report  down  to  the  Post-Dispatch  office  and  made 
a  copy  of  it.  I  think  it  was  then  about  2:30  in  the  afternoon.  I  worked  at 
the  typewriter  until  one  or  two  o'clock  in  the  morning.  I  took  my  copy  to 
write  my  story,  by  clipping  from  it  and  pasting  the  clippings  where  I 
wanted  them.  The  following  morning,  as  soon  as  the  inspectors'  oiEce  was 
open,  I  went  in  and  put  the  report  back  in  the  drawer.  No  one  was  present 
at  the  time.  I  then  delivered  my  story  to  Mr.  Bovard,  the  city  editor.  I 
told  him  it  was  a  confidential  secret  report  of  the  postoffice  inspectors.  My 
recollection  is  that  it  was  so  stated  in  the  article.  He  knew  I  had  been 
trying  to  get  it  for  a  long  time. 

Here  occurred  this  colloquy: 

Mr.  I^ewis:  Aside  from  any  news  value,  knowing  that  this  was  a  secret 
and  confidential  report  and  had  been  obtained  consequently  in  some  dubious 
manner,  in  your  judgment,  was  it  his  duty  as  a  matter  of  honor  to  have 
directed  you  to  return  it  where  you  got  it  without  printing  it? 

Mr.  Betts:    I  don't  know. 

Mr.  Lewis:    In  other  words,  it  was  stolen  goods? 

Mr.  Betts:  I  want  to  make  a  statement  to  this  conmiittee.  I  was  con- 
nected with  the  Post-Dispatch  for  a  long  time,  and  Mr.  Lewis  has  pendijig 
against  the  Post-Dispatch  a  damage  suit — 

Mr.  Lewis:    I  am  not  going  to  use  your  evidence. 

Mn.  Betts:    For  a  large  amount  of  money. 

Mr.  McCoy:  Don't  make  any  pledge  about  not  using  it,  Mr.  Lewis;  you 
are  entitled  to  it. 

Mr.  Lewis:    Then,  if  I  am,  I  am  going  after  it,  gentlemen. 
"get  the  stoby." 

Mr.  Betts  then  continued: 

About  the  only  order  there  ever  was  in  the  Post-Dispatch  office  was  "Get 
the  story !"  When  I  told  Mr.  Bovard  that  the  postoffice  inspectors  were  in- 
vestigating these  enterprises,  he  said,  "Get  the  story."  I  couldn't  do  that 
unless  I  got  the  report.  That  was  what  1  was  working  for.  I  told  him  that 
if  I  could  get  a  copy  of  the  report  that  would  be  the  whole  story.  All  he 
said  was,  "Then  get  the  story." 

My  story  was  then  set  in  type.  The  next  day  or  so  I  read  the  proof. 
The  article  stood  in  type  in  the  Post-Dispatch  office  for  something  over  a 
week.  It  came  out,  finally,  as  a  news  article.  My  understanding  of  the  rea- 
son it  was  not  previously  published  is  that  the  office  did  not  consider  it 
proper  for  publication  as  a  news-item  until  some  action  had  been  taken  at 
Washington.  I  was  sent  down  to  Washington  and  remained  about  a  week 
in  an  effort  to  learn  whether  Lewis  had  been  cited  to  show  cause  why  a 
fraud  order  should  not  be  issued.  Mr.  Fulton  was  there.  My  recollection 
is  that  I  found  him  in  the  chief  inspector's  office.  I  asked  if  he  could  step 
back  with  me  into  the  private  room  and  talk  with  me  a  minute,  and  we 
went  back.  I  said,  "Mr.  Fulton,  I  have  seen  a  copy  of  the  Lewis  report. 
It  is  hard  to  find  out  anything.  I  want  to  know  whether  a  citation  has  been 
issued."  He  replied,  "I  can't  tell  you.  You  know  it  would  be  suicidal  for 
me  to  discuss  it."  I  afterwards  told  him  that  we  had  a  copy  of  the  report, 
and  were  going  to  print  it,  but  had  not  yet  done  so. 

Mh.  Lewis:  Did  Mr.  Fulton,  as  the  inspector-in-charge,  knowing  that 
you  had  a  full  copy  of  this  report,  and  that  it  was  a  secret  report,  make 


326  THE  SIEGE  OF  UNIVERSITY  CITY 

iinj  effort  to  prevent  its  publication  by  the  Post-Dispatch,  to  your  knowl- 
edge? 

Mr.  Betts:  As  far  as  I  know,  he  did  not.  I  don't  recall.  I  don't  know 
of  anything  that  he  did. 

Mr.  Lev/is:  Mr.  Fulton  was  inspector-in-charge.  Knowing  that  this  was 
a  secret  report,  and  having  ber?n  informed  br  you  that  you  had  obtained  it, 
dnd  consequently  knowing  that  you  must  have  obtained  it  in  some  round- 
about way — I  don't  know  whether  I  am  making  it  too  broad — knowing,  as 
you  would  know,  being  a  man  of  intelligence,  the  terribly  destructive  power 
that  such  a  report  in  the  hands  of  a  newspaper  would  have  against  perhaps 
an  innocent  party,  if  it  is  published,  and  knowing  the  whole  menace  and 
threat  of  that  thing,  and  being  informed  three  days  before  it  came  out 
that  you  had  it  and  that  it  was  in  the  hands  of  the  Post-Dispatch — yet,  as 
far  as  you  know,  he  made  no  effort  whatsoever  to  prevent  the  Post-Dispatch 
from  publishing  it? 

Mr.  Betts:    I  don't  know  of  any. 

Mr.  Lewis:     You  never  heard  of  any? 

Mb.  Betts:     No. 

My  recollection  is  that  I  got  back  to  St.  Louis  on  a  Sunday  evening.  On 
Monday,  I  told  them  at  the  office  I  was  satisfied  that  a  citation  had  been 
issued,  but  had  not  absolutely  heard  of  it.  I  told  them  Fulton  had  returned, 
and  I  did  not  think  he  would  come  back  unless  a  citation  had  been  issued. 
I  said  that  if  I  was  in  their  place  I  would  go  ahead  and  print  the  story. 
It  was  printed  on  Wednesday,  three  days  after  I  got  back  from  Washing- 
ton. The  citation  had  been  issued  at  that  time,  but  I  didn't  know  it.  I 
supposed  that  they  were  going  on  mv  judgment,  but  I  had  no  knowledge 
at  all. 

'  The  article  came  out  as  a  special  extra.  As  soon  as  it  was  on  the  street 
I  was  given  a  copy  of  the  paper  and  told  to  go  out  and  interview  Lewis 
and  see  if  he  would  make  any  statement.  I  did  so,  and  was  sitting  in 
Lewis'  office  when  Postmaster  Wyman's  secretary  came  in  with  the  citation 
and  gave  it  to  Lewis.  After  that  I  worked  on  the  story  continuously,  but 
only  wrote  parts  of  it.  There  was  a  great  deal  printed.  There  were  several 
of  the  Post-Dispatch  men  busy  on  the  case. 

Let  us  now  see  what  was  this  story,  based  upon  a  secret  report 
obtained,  conveyed,  filched,  purloined,  borrowed  to  replace,  stolen 
for  the  time,  thieved,  provided  by  connivance — whatever  phrase 
one  uses  cannot  be  made  too  strong.  Did  Betts  steal  the  report 
against  the  will  of  the  inspector?  Did  Sullivan  give  the  reporter 
his  chance  to  take  the  paper  out  of  laxity  and  by  way  of  simple 
good  fellowship.''  Or,  as  the  local  rumor  runs,  was  this  part  of  a 
plan  of  the  postoffice  inspectors  at  St.  Louis  to  ensure  that  Wash- 
ington sliould  obey  their  desires,  and  finish  the  job  of  smashing 
Lewis?  What  shall  be  said  as  to  the  nature  of  the  action  of  taking 
this  report  for  publication.  Was  such  a  reporter's  trick  allowable? 
Has  a  newspaper  editor  the  right  to  get  confidential  information 
in  any  way  he  can,  and  publish  it  unmindful  of  consequences?  May 
a  Government  inspector  use  his  own  discretion  as  to  when  he  shall 
allow  a  newspaper  to  take  or  get  a  copy  of  his  report.  Is  it  a  repu- 
table thing  to  accept  and  print  such  a  report,  on  the  part  of  such  a 
newspaper  as  the  Post-Dispatch,  which,  by  its  considerable  circula- 
tion, may  very  well  be  thought  of  as  representing  the  opinions  of 
the  people  of  St.  Louis?  It  might  be  thought  that  such  a  trifling 
affair  as  taking  a  document  out  of  an  inspector's  drawer,  reading 


Equipment  of  the  magazine  plant  ,  ♦   the   Lezeis  l'Hhhsh.ti:g  Company.  Magazine  Press 
Building 

'^Magazine    composing    room     "Engraving    department     ^Electrotyping    department 


Equipment    of    the    Lcuns    Puhlishing    Company,    magazine    plant.    Magazine    Press 
Building 

^Battery   of  Dexter   Folding   Machines     'Battery   of   Kidder  Rotary   Printing   Presses 


THE  DREYFUS  CASE  OF  AMERICA  329 

it,  copying  it,  and  replacing  it  next  morning,  was  entirely  justi- 
fiable under  the  general  order  "Get  the  Story."  It  might  be 
thought  that  an  inspector  is  not  too  careless  when  he  leaves  confi- 
dential reports  in  open  drawers  for  friendly  reporters  to  take  out. 
It  might  be  further  thought  that  the  publication,  under  such  circum- 
stances, of  a  story  that  would  discredit  a  man's  reputation,  destroy 
his  business  and  eventually  involve  losses  running  into  the  millions 
of  dollars,  was  entirely  allowable  on  the  part  of  such  an  editor, 
reporter,  inspector,  and  their  superiors,  or  whoever  was  responsible 
for  tlie  issuance  of  the  secret  report. 

But  what  do  the  members  of  Congress,  who  are  accustomed  to 
deal  with  matters  of  confidential  nature,  and  with  reporters  who 
seek  information,  think  of  such  an  action.^  Betts,  asked  if  he  did 
not  know  that  the  publication  of  his  story  would  bring  disaster 
upon  the  bank,  replied  that  neither  he  nor  the  managing  editor 
gave  that  question  any  consideration.  Congressman  Alexander 
then  uttered  these  words  which  would  seem  caustic  enough  to  bite 
through  even  the  callous  hide  of  yellow  journalism  and  burn  down 
deeply  enough  to  reach  the  editorial  conscience  underneath.  "If 
the  Washington  correspondents  of  newspajDers  used  such  methods," 
said  he,  "their  necks  would  be  broken,  and  they  would  be  thrown 
bodily  from  the  Capitol  Building." 

THE    CITATION    IS    RECEIVED. 

What  did  this  editor  and  reporter  next  do?  Having  set  fire  to 
a  man's  house,  they  went  out  to  ask  him  how  he  liked  it.  Betts 
testifies  that  as  soon  as  the  Post-Dispatch  article  was  on  the 
street,  his  editor  handed  him  a  copy  and  instructed  him  to  go  out 
to  University  City  to  interview  Lewis,  and  get  his  story,  presumably 
for  the  later  evening  issue.  Betts  states,  dramatically  enough,  that 
the  citation  (to  appear  at  a  future  hearing),  which  had  been  sent 
on  from  Washington,  was  actually  delivered  into  Lewis'  hands  by 
the  messenger  of  the  St.  Louis  postmaster,  while  he  was  present  in 
Lewis'  office.  The  news  that  the  citation  was  issued  thus  became 
public  and  flew  all  over  the  country.  Mark,  not  the  news  of  a 
fraud  order,  but  only  of  a  citation  to  appear  to  show  good  cause 
why  such  an  order  should  not  be  issued.  But  people  did  not  dis- 
tinguish between  them.  Citation,  fraud  order;  the  two  words  pro- 
duce much  the  same  effect  on  the  common  mind,  though  there  is  all 
the  difference  in  the  world  between  investigating  a  man  and  pub- 
licly stigmatizing  him  as  a  fraud.  -  The  fact,  however,  that  a  cita- 
tion had  been  issued  was  now  made  known  by  Betts.  It  was  men- 
tioned in  the  St.  Louis  papers  of  June  1,  1905.  It  was  public 
property.  It  was  telegraphed  all  over  the  country,  "Citation  issued 
to  Lewis  to  appear  at  Washington." 

The  combined  effect  of  all  this  publicity  was  instantaneous. 
Whoever  it  was  that  desired  to  force  the  issue  certainly  succeeded. 
For  the  whole  superstructure  of  modern  business  rests  upon  a  basis 
of  confidence.     When  confidence  is  lost,  all  is  lost.     The  reputation 


330  THE  SIEGE  OF  UNIVERSITY  CITY 

of  a  bankj  and  all  banking  credit  either  of  men  or  of  corporations 
is  most  sensitive.  One  breath  of  scandal  is  as  fatal  to  credit  as 
the  first  chilling  frosts  of  autumn  are  to  grass  and  flowers.  The 
credit  which  Lewis  had  built  up,  by  incredible  exertion,  careful 
experiment  and  sagacious  forethought,  within  the  preceding  few 
years  to  a  total  over  a  million  dollars,  disappeared,  like  the  wonder- 
ful palace  of  Aladdin,  in  a  single  night.  If  his  loans  had  not  been 
consolidated  in  the  People's  Bank,  they  would  have  been  called  in, 
and  he  helpless.  All  negotiations  connected  with  his  various  pro- 
jects were  abruptly  broken  off.  Fair  weather  friends  deserted  him. 
Even  those  who  were  most  loyal  and  confident  of  his  honest  intent 
and  personal  integrity,  found  it  expedient  to  dissemble  and  to  make 
their  appointments  so  as  to  see  him  at  his  home  after  business  hours. 

DETAILS   OF   REPORT  ASKING  FRAUD  ORDER. 

The  reader  of  this  story  of  the  Siege  is  now  in  a  position,  just 
as  were  the  people  of  St.  Louis  in  1905,  to  realize  to  the  full  the 
exact  significance  and  probable  actual  effect  of  this  celebrated 
"Extra."  The  charges  against  Lewis,  upon  which  the  fraud  order 
was  afterwards  issued,  have  nowhere  been  set  forth  more  clearly 
or  in  briefer  compass  than  when  they  were  first  published  to  the 
world  by  Betts  when  he  was  told  to  "get  the  story."  The  main 
part  of  this  article  is  given  below.  It  was  taken  from  a  copy  of  the 
Post-Dispatch  of  that  date,  now  yellowing  with  years,  but  not  half 
so  yellow  as  the  original,  jaundiced  with  sensationalism,  with  envy, 
with  greed  for  gain,  and  with  fear  of  an  ambitious  and  powerful 
rival. 

This  article  was  the  basis  of  the  libel  suit  brought  by  Lewis 
against  the  Post-Dispatch  for  damages  to  the  extent  of  $750,000. 
This  suit  was  held  up  three  years,  in  the  hands  of  Judge  Smith 
McPherson  (of  whom  more  hereafter)  on  a  question  of 
jurisdiction.  On  the  very  eve  of  the  Ashbrook  Congressional  in- 
quiry it  was  remanded  for  trial  in  the  State  Courts  of  Missouri. 
Betts  was  not  examined  at  this  trial.  The  management  of  the 
Post-Dispatch  was  evidently  fearful  of  the  effect  of  his  story  upon 
the  jury.  The  court  instructed  the  jury  that  a  newspaper  has  a 
right  to  print  the  news  regardless  of  its  effects.  The  jury  there- 
upon found  in  favor  of  the  defendant  newspaper.  We  will  now 
introduce,  in  large  part,  the  story  itself,  so  that  the  reader  may 
judge  for  himself  as  to  its  character  and  the  propriety  of  its  publi- 
cation. 

A  reproduction  of  pages  one  and  four  of  this  issue  of  the  Post- 
Dispatch  appears  elsewhere  in  this  book,  reduced  in  size,  and  on  this 
the  main  headings  can  be  deciphered.     The  principal  article,  save 
for  unnecessary  details  and  repetitions  omitted,  is  as  follows: 
Detaiis  of  Report  Askixo  Fraud  Order. 
Br  Curtis  A.  Betts, 
A  Staff  Correspondent  of  the  Post-Dispatch. 

Washington,  May  31. — Assistant  Attorney-General  Goodwin  has  under 
consideration  a  voluminous  report  from  the  Postoffice  Department,  which 


THE  DREYFUS  CASE  OF  AMERICA  331 

recommends  that  a  fraud  order  be  issued  against  the  People's  United  States 
Bank  of  St.  Louis,  prohibitirig  it  from  using  the  mails.  The  bank  was 
organized  by  Edward  G.  Lewis,  who  is  its  president,  and  who  is  also  presi- 
dent of  the  Woman's  Magazine  of  St.  Louis.  No  action  has  yet  been  taken 
by  the  attorney-general's  office.  The  report  was  received  from  Chief  Pobt- 
ofBce  Inspector  W.  J.  Vickery,  to  whom  it  was  sent  by  Inspectors  Fulton, 
Sullivan  and  Stice  of  St.  Louis,  the  inspectors  who  made  the  investigation 
of  the  bank.  The  report  also  states  that  the  case  will  be  laid  before  United 
States  District  Attorney  Dyer  at  St.  Louis  for  presentation  to  the  Federal 
Grand  Jury. 

The  inspectors  say  in  their  reports  that  some  of  the  other  companies  or- 
ganized by  Lewis  were  in  debt;  hence,  the  necessity  of  organizing  a  bank, 
in  order  to  have  ready  cash  from  which  to  supply  the  needs  of  these  com- 
panies. The  bank  has  been  under  investigation  by  R.  M.  Fulton,  post- 
office  inspector-in-charge  at  St.  Louis  and  Inspectors  W.  T.  Sullivan  and 
J.  L.  Stice  since  March  1.  While  this  investigation  has  not  yet  been  finally 
closed,  the  inspectors  have  submitted  to  the  assistant  attorney-general  for 
the  Postoffice  Department  here  a  report,  on  which  tliey  ask  that  Lewis  be 
cited  to  appear  and  show  cause  why  a  fraud  order  should  not  be  issued 
against  him. 

As  reasons  for  the  issuance  of  a  fraud  order,  the  inspectors  allege  that 
Lewis  "obtained  money  and  subscriptions  for  stock  in  the  bank  by  exag- 
geration and  misrepresentation  of  the  security,  safety  and  profits  to  accrue 
to  the  subscribers  of  stock,  promising  to  put  in  his  own  funds,  dollar  for 
dollar  for  every  subscriber,  and  then  organized  the  bank  so  that  Edward 
G.  Lewis  could  and  would  control  it  without  the  voice  of  the  stockholders, 
and  use  the  funds  subscribed,  or  a  large  portion  of  them,  for  his  own 
purposes  and  benefits." 

It  is  alleged  that  Lewis  drew  salary  from  the  bank  as  its  president 
from  July,  1904,  while  the  bank  was  not  legally  in  existence,  until  No- 
vember 14,  1904,  and  that  he  had  no  right  to  draw  salary  until  that  time. 

That  Lewis'  representations  that  the  capital  stock  of  the  bank  would  be 
worth  several  times  par  the  day  the  bank  opened  were  untrue. 

That  it  is  not  true  that  the  profits  of  this  bank  are  so  much  greater  and 
the  expense  of  operating  so  much  less  than  other  banks,  as  Lewis  repre- 
sented. 

That  Lewis  represented  that  the  profits  from  a  certain  certified  check 
system  alone  would  amount  to  nearly  a  quarter  of  a  million  dollars  a  year, 
and  that  this  is  not  true. 

That  it  is  not  true  that  Lewis  subscribed  for  and  took  dollar  for  dollar 
of  capital  stock  with  other  subscribers,  or  that  he  took  a  million  dollars 
in  stock  in  his  own  name;  or  that  he  paid  in  a  single  dollar  out  of  his  own 
funds  for  capital  stock;  or  that  his  capital  stock  would  go  to  increase  the 
reserve  of  the  bank  and,  in  consequence,  enhance  the  value  of  the  stock 
of  other  subscribers,  as  it  is  alleged  he  represented. 

That  it  is  not  true  that  the  officers  and  directors  of  the  bank  are  pre- 
vented from  loaning  or  borrowing  the  funds  of  the  bank,  but  that  they 
had  loaned  and  borrowed  5(411,203.18  up  to  March  15,  1905,  when  the  capi- 
tal stock  amounted  to  only  half  a  million. 

That  it  is  not  true  that  the  capital  stock  of  the  bank  was  intended  to 
be  invested  in  Government  or  State  bonds  or  gilt-edged  securities. 

That  it  is  not  true  that  the  loans  of  the  bank  were  passed  on  or  guar- 
anteed by  any  other  bank. 

That  it  is  not  true  that  the  Woman's  Magazine  and  Woman's  Farm 
Journal  were  built  up  on  a  capital  of  $1.25,  and  that  it  is  also  not  true  that 
the  Woman's  Magazine  building  was  built  at  a  cost  of  a  half  million  dol- 
lars "without  mortgage,  lien  or  loan,"  and  the  advertisement  of  the  suc- 
cess of  those  two  papers  as  evidence  that  the  bank  would  prove  successful, 
is  misleading  and  a  misrepresentation  of  existing  facts. 


332  THE  SIEGE  OF  UNIVERSITY  CITY 

That  it  is  not  true  that  the  board  of  directors  is  composed  of  men 
selected  because  they  had  demonstrated  ability,  built  up  large  enterprises 
and  amassed  comfortable  fortunes;  that  the  board  of  directors  was  not 
elected  according  to  the  laws  of  Missouri,  but  was  and  is  the  sole  selectioa 
of  E.  G.  Lewis  out  of  bis  employees  of  the  Lewis  Publishing  Company. 

That  the  voice  of  the  stockliolder  is  silenced  and  has  no  part  in  the  con- 
duct, control  or  management  of  the  bank. 

That  it  is  not  true  that  the  great  profits  which  Lewis  described  in  lit- 
erature sent  through  the  mails,  would  accrue  to  the  bank,  or  could  possibly 
accrue,  and  that  Lewis  knew  this  to  be  a  fact. 

Regarding  the  allegation  that  Lewis  and  concerns  in  which  he  is  fman- 
cially  interested,  borrowed  money  from  the  bank  in  excess  of  the  amount 
permitted  bv  law,  it  is  alleged  tiiat  his  books  show  such  loans  amtjunting 
to  $411,203.18. 

At  the  time  this  money  was  borrowed,  it  is  alleged,  the  paid  in  capital 
stock  of  the  bank  was  only  five  hundred  thousand  dollars,  and  that  the 
amount  alleged  to  ha\'e  been  borrowed,  $411,203.18,  is  greatly  in  excess 
of  the  State  law,  which  provides: 

"No  ofbcer  or  director  of  the  bank  shall  be  permitted  to  borrow  of  the 
bank  in  excess  of  ten  per  cent  of  the  capital  and  surplus,  without  the  con- 
sent of  a  majority  of  the  other  directors  being  first  obtained  at  a  regular 
meeting  and  made  a  matter  of  record  *  *  *  and  no  bank  shall  lend 
its  money  to  any  individual  or  company,  directly  or  indirectly,  or  permit 
them  to  become  indebted  or  liable  to  it  to  an  amount  exceeding  twenty-five 
per  cent  of  its  capital  stock  actually  paid  in." 

The  note  for  $146,375.63  for  expenses  of  promotion  and  advertising,  is 
signed  by  E.  G.  Lewis,  E.  W.  Thompson,  F.  J.  Cabot,  A.  L.  Coakley  and 
G.  A.  Arbogast,  the  five  directors  of  the  People's  United  States  Bank. 

That  Lewis  stated  the  bank  stock  would  be  worth  several  times  par  the 
day  the  bank  opened  is  seen  in  the  May,  1904,  edition  of  the  Woman's  Mag- 
azine, in  which  was  stated: 

"Subscriptions  to  stock  have  poured  in  by  tens  of  thousands  of  dollars. 
*  *  *  Our  bank  will  open  with  over  one  hundred  thousand  stockholders 
and  depositors.  *  *  *  Stock  will  advance  to  several  times  par  the  day 
the  charter  is  granted."     *     *     * 

Regarding  the  profits  to  accrue  from  the  certified  check  system,  Lewis 
says  in  the  July,  1904,  issue  of  the  Woman's  Magazine,  in  an  article  cov- 
ering two  pages:  "From  certified  check  system  the  earnings  will  be  nearly 
a  quarter  of  a  million  dollars  per  year  without  having  to  pay  any  interest 
on  it." 

Regarding  his  agreement  to  put  in  dollar  for  dollar  with  the  other  sub- 
scribers to  the  stock,  Lewis  said  in  the  May,  1904,  issue  of  the  Woman's 
Magazine:  "I  ask  you  to  join  me  with  from  one  dollar  to  five  hundred 
dollars.  I  have  pledged  to  put  up  dollar  for  dollar  with  you  to  the  utmost 
limits  of  my  private  fortune.  I  would  rather  be  president  of  the  Woman's 
Magazine  and  the  Postal  Bank  than  president  of  the  United  States." 

Regarding  his  subscriptions  to  stock  and  his  profits  going  into  the  re- 
serve fund,  Lewis  stated  in  the  July,  1904,  Woman's  Magazine:  "I  am 
arranging  to  turn  nearly  everything  I  have  into  cash,  outside  of  my  stock- 
holdings in  my  present  publishing  business,  and  expect  to  subscribe  for 
at  least  one  million  dollars  of  the  stock  of  our  bank.  I  must  pay  cash,  ex- 
actly the  same  as  you  do  for  my  stock,  as  there  is  no  "promoter's  stock"  in 
this  bank,  but  when  it  opens  its  doors  there  will  be  a  dollar  in  cash  in  the 
vaults  for  every  dollar  of  capital  stock,  and  every  dollar  of  my  profit  will 
go  to  increase  the  reserve  in  the  bank  each  year." 

As  to  the  privilege  of  officers  and  directors  borrowing  from  the  bank. 
Lewis  said  in  the  July,  1904,  Woman's  Magazine:  "Our  bank  will  not  be 
a  private  bank,  but  a  State  or  National  bank.  Its  stockholders  cannot  be 
assessed  or  become  liable.    The  officers  and  directors  cannot  borrow  or  use 


Transportation  equipment  of  the  Le-duis  Publishing  Company  during  the  prosperous 
years  of  IQ04  and  igo^ 

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Alhlclic  organicatwns  of  employes  and  equipment  provided  by   the  Lewis  Publishing 
Company    during   its   period  of  prosperity 

^Senior  base-ball  team     'Base-hall  park,   built  in  the  spring  of  190$     ^Junior  team 


THE  DREYFUS  CASE  OF  AMERICA  385 

a  dollar  of  its  funds.  I,  who  am  arranging  my  personal  affairs  so  as  to 
take  and  paj  for  a  million  dollars  of  the  stock  myself,  and  who  will  be  its 
president,  could  not  lend  myself  a  single  dollar  of  the  bank's  funds.  In 
addition  to  this,  I  am  pledging  my  own  great  stockholdings  to  you  for  your 
additional  safety  and  profit.  Every  dollar  that  my  stock  earns  goes  into 
the  reserve  of  the  bank,  adding  to  the  value  of  your  stock." 

Regarding  the  investment  of  the  capital  stock  of  the  bank  in  Government 
or  State  bonds,  or  gilt-edged  securities,  Lewis  said,  on  page  11  of  "Bank- 
ing by  Mail":  "The  entire  capital  of  this  bank  will  be  invested  in  Gov- 
ernment bonds  or  other  gilt-edged  securities." 

Regarding  his  plan  of  having  other  banks  pass  upon  and  guarantee  all 
loans,  Lewis  said,  in  the  September,  1904,  Woman's  Magazine:  "By  our 
system  its  loans  are  passed  on  and  the  greatest  part  of  them,  as  I  will 
explain,  are  guaranteed  and  secured  by  other  banks  with  the  best  collat- 
eral." 

Concerning  the  success  of  his  publication,  Lewis,  under  a  picture  of  the 
Woman's  Magazine  Building  on  the  cover  of  "Banking  by  Mail,"  said: 
"Great  office  building  of  the  Woman's  Magazine  and  Woman's  Farm  Jour- 
nal (Lewis  Publishing  Company)  erected  for  cash,  without  mortgage  or 
lien,  at  a  cost  of  over  a  half  million  dollars,  in  five  years,  from  the  start  of 
$1.25,  showing  what  can  be  done  if  enough  people  combine  to  do  it  even 
at  10  cents  per  year,  each." 

Regarding  his  selection  of  a  board  of  directors,  Lewis  said,  on  page  11 
of  "Banking  by  Mail":  "I  shall  have  associated  with  me  on  the  board  of 
directors  seven  of  the  strongest,  ablest  men  that  I  can  get.  These  men  I 
have  selected  because,  while  they  have  made  independent  fortunes — -have 
made  them  legitimately  and  honestly  by  a  life's  labor — they  are  so  situated 
that  they  are  free  from  the  pull  and  intrigue  that  their  position  would 
naturally  bring  against  them,  but  have  a  life  record  of  honesty  and  fair 
dealing  which  makes  their  standing  in  the  community  one  that  cannot  be 
questioned." 

On  the  same  subject  Ltwis  said,  in  the  July,  1904,  Woman's  Magazine: 
"The  board  of  directors  will  be  composed  of  men  selected,  not  because  of 
their  banking  experience  or  their  connection  witli  other  banks  or  trust  com- 
panies, but  largely  because  they  have  no  such  experience  or  entanglements. 
I  am  selecting  seven  strong  men  who  have  demonstrated  abilities,  built  up 
large  enterprises,  amassed  considerable  fortunes,  etc." 

Postoffice  inspectors  allege  that  the  men  composing  the  board  of  direc- 
tors are  as  follows:  Edward  G.  Lewis,  ]iresident  of  Woman's  Magazine, 
or  Lewis  Publishing  Company,  salary  $15,000  a  year;  Frank  J.  Cabot, 
editor  of  Woman's  Magazine,  salary  $4,000  a  year,  and  editor  of  Woman's 
Farm  Journal,  at  salary  of  $3,000  a  year;  Augustine  P.  Coakley,  adver- 
tising manager  of  Lewis  Publishing  Company;  Eugene  W.  Thompson  and 
Guy  A.  Arbogast,  employees  of  Lewis  Publishing  Company. 

As  evidence  that  the  voice  of  the  stockholder  is  silent  and  has  no  part 
in  the  management  of  the  bank,  the  inspectors  incorporated  in  their  report 
the  following  contract  of  waiver  and  proxy,  which,  it  is  stated,  every  stock- 
holder signed: 

"This  memorandum  witnesseth  that,  in  consideration  of  the  transfer  to 
the  undersigned  by  Edward  G.  Lewis,  president  of  the  People's  United 
States  Bank  of  *  *  *  shares  of  the  capital  stock  of  said  bank  (amount- 
ing to  the  par  value  of  $ ),  I  hereby  authorize  him  to  receipt  for  me 

and  in  my  name  on  the  books  of  said  bank  for  the  certificates  for  my  said 
shares;  and  in  consideration  of  his  services  in  the  organization  of  said  bank 
and  of  his  acceptance  hereof,  I  hereby  request  and  appoint  said  E.  G.  Lewis 
to  act  as  proxy  to  vote  and  represent  my  said  stock  at  all  meetings  of 
stockholders  of  said  bank  in  event  I  be  not  personally  present;  and  upon 
his  acceptance  of  this  proxy  the  same  shall  remain  in  force  imtil  revoked 
by  me  after  three  years  from  this  date,  by  written  notice  to  said  bank,  but 


336  THE  SIEGE  OF  UNIVERSITY  CITY 

before  any  revocation  it  is  agreed  that  said  Lewis  shall  first  have  the 
option  (upon  ten  days'  written  notice  to  him)  to  purchase  said  stock  of 
me  or  my  legal  representatives,  at  its  fair  market  value  at  the  time,  and 
I  hereby  ratify  the  proceedings  taken  for  incorporation  and  operation  of 
said  bank,  and  for  the  increase  of  its  stock,  and  hereby  waive  any  right  to 
subscribe  for  any  increase  of  stock,  unless  with  the  written  assent  of  said 
Lewis,  and  I  request  said  Lewis  to  cause  to  be  forwarded  to  me  tiie  official 
certificate  for  my  said  stock,  and  upon  his  acceptance  of  the  duties  of  proxy 
as  aforesaid,  and  due  consignment  of  said  certificate  by  mail  to  me,  this 
memorandum  shall  become  effective,  and  not  otherwise.  In  attestation, 
witness  my  signature,  the  date  first  aforesaid." 

In  the  December,  lOOi,  number  of  the  Woman's  Magazine  Lewis  gave  as 
the  five  means  by  which  the  bank  would  make  money:  (1)  The  certified 
check  system;  (2)  the  profit-sharing  time  certificates;  (3)  the  legal  de- 
partment, by  which  all  patrons  get  advice  for  two  dollars;  (4)  safety  de- 
posit vaults  at  two  dollars  per  year;  (5)  trust  department,  whereby  the 
bank  acts  as  trustee  and  executor  for  wills  and  estates. 

According  to  the  postoffice  inspectors'  examination,  the  books  show  the 
subscriptions  to  the  capital  stock  on  March  15,  1905,  to  have  been  $i?,114,- 
926.67.  In  the  February,  1905,  issue  of  the  Woman's  Magazine,  under  date 
of  January  3,  Lewis  said:  "Today,  ten  days  after  the  closing  of  the  sub- 
scription books  (December  24)  I  am  just  staggering  out  from  under  an 
avalanche  of  subscriptions,  by  mail  and  telegraph,  that  came  in  the  last 
few  days  before  closing  the  books.  Already  over  ninety  thousand  individ- 
ual subscriptions  to  the  capital  stock  of  the  bank  have  been  recorded.  The 
entire  five  million  is  subscribed,  and  what  the  total  subscription  will  amount 
to,  I  cannot  yet  tell. 

"The  legal  advisers  of  the  bank  have  advised  us  that  the  regular  legal 
notice  of  the  increase  of  the  capital  to  the  five  million  dollars  be  advertised 
in  the  local  papers  for  sixty  days,  instead  of  incorporating  a  waiver  of 
notice  as  was  originally  planned.  This  delays  the  delivery  of  the  stock 
certificates  until  after  March  4,  although  they  are  now  being  made  out. 
*  *  *  On  March  4,  the  meeting  is  to  be  held  to  formally  increase  the 
capital.  In  the  meantime,  as  fast  as  they  can  be  handled,  the  formal  re- 
ceipts will  be  called  in  and  the  stock  certificates  made  out  in  their  place. 
All  stock  certificates  will  bear  the  same  date. 

"I  beg  of  those  of  you  who  receive  tliis  stock  to  hold  it  tight.  I  believe 
in  a  few  years  it  will  have  become  the  most  sought  after  and  highest  priced 
stock  in  America.  Already  premiums  of  two  for  one  (two  dollars  for  one 
dollar)  have  been  freely  offered  for  large  blocks  of  it.  Shortly  after 
March  4,  it  will  be  regularly  listed  in  the  Stock  Exchange.  Remember,  all 
this  stock  is  in  your  hands.  No  man  or  woman  will  have  over  five  hun- 
dred dollars'  worth  of  it  unless  they  obtain  it  by  deliberate  falsehood.  I 
have  pledged  my  fortune,  my  great  publishing  business,  and  the  best  years 
of  my  life  to  come,  to  the  success  of  this  bank.  It  is  in  your  hands.  No 
man  could  read  the  thousands  upon  thousands  of  letters  breathing  confi- 
dence and  good  wishes  that  I  have  received  from  you  and  not  be  a  bigger, 
broader  and  better  man  for  it.  That  is  my  profit  and  the  only  profit  I 
want. 

"On  December  24,  the  subscription  books  closed  with  about  ninety  thou- 
sand subscribers  to  the  stock  in  my  hands.  Be  patient.  I  have  carried 
through  in  the  past  few  months  the  organization  of  one  of  the  greatest  cor- 
porations in  the  world.  I  have  sent  out  over  three  million  letters.  I  have 
personally  answered  tens  of  thousands  more.  *  *  *  I  do  not  think  there 
is  any  doul)t  l)ut  that  we  will  have  nearly,  if  not  fully,  one  hundred  thou- 
sand stockholders  when  the  mail  is  all  opened. 

"I  have  subscribed  for  two  million  dollars  of  the  stock  of  our  bank  my- 
self, instead  of  alloting  it  on  the  large  lists  of  whole  wealthy  families.  One 
million  dollars  of  the  stock  I  intend  to  retain  and  so  trustee  it  that  its 


THE  DREYFUS  CASE  OF  AMERICA  337 

earnings  shall  go  into  the  reserve  of  the  bank  each  year,  in  order  to  more 
rapidly  double  the  value  of  the  stock  of  other  stockholders,  and  so  that  it 
■will  forever  remain  as  a  barrier  to  any  man  or  body  of  men  who,  attracted 
by  the  wealth  and  prosperity  of  our  bank  at  some  future  day,  should  try 
to  buy  up  enough  of  the  stock  to  give  them  a  large  vote  in  its  affairs. 
*  *  *  With  my  million  dollars  of  the  stock  trusteed,  and  in  the  event  of 
my  death,  voted  by  the  other  stockholders,  that  would  be  practically  impos- 
sible. Now,  the  other  million  dollars  of  my  subscription,  I  have  divided 
into  two  parts  of  a  half  million  dollars  each.  One  part  I  shall  allot  and 
sell  at  par  to  those  of  you  who  could  not  subscribe  for  and  pay  for  it  all 
at  once.  *  ♦  *  The  other  half  million  dollars  I  shall  hold  to  be  placed 
exclusively  with  the  officers  of  other  Ijanks  and  with  strong  men  who  can 
be  a  source  of  assistance,  counsel  and  mutual  benefit  to  our  bank." 

THE   SIEGE   BEGINS. 

Betts'  story  was  in  the  nature  of  a  bombshell  thrown  into  a  be- 
sieged city.  Its  devastating  eifect  upon  the  growing  industries, 
whose  development,  filled  with  hopeful  enthusiasm,  makes  this 
story  of  the  Siege  one  of  absorbing,  practical  interest,  may  now 
be  realized.  The  condition  of  public  alarm  was,  it  is  true,  not  yet 
as  pronounced  in  St.  Louis  and  all  over  the  country  as  it  finally 
became  after  the  actual  issuance  of  the  fraud  order,  which  was  to 
the  Siege  as  the  final  cutting  off  of  all  communications  by  the 
closure  of  the  enemy's  lines. 

But  the  air  was  thick  with  rumors.  Suspicion  was  so  strong  that 
bankers  and  responsible  business  men  felt  it  incumbent  on  them 
in  justice  to  tlieir  own  stockholders  and  creditors,  not  to  have  any- 
thing further  to  do  with  the  notorious  E.  G.  Lewis.  They  could  no 
longer,  as  they  had  been  formerly  glad  to  do,  allow  their  names 
to  be  associated  with  the  ncAvly  formed  People's  Bank,  or  Lewis' 
other  enterprises.  In  cafes  and  clubs,  on  the  street  corners,  and  in 
bank  parlors,  men  read  this  article  with  absolute  amazement  and 
horror.  News  of  an  actual  war  could  hardly  have  stirred  them 
more,  and  the  effect  was  similar.  Those  dealing  with  him  stopped. 
Among  the  numerous  projects  which  he  had  undertaken  and  partly 
carried  out,  and  which  fell  through  at  this  juncture,  were  these: 
The  purchase  of  the  St.  Louis  Star,  which  was  to  have  been  con- 
summated the  very  next  day,  June  1,  was  frustrated;  a  loan  of  trwo 
hundred  thousand  dollars  that  had  actually  been  passed  to  the 
credit  of  Lewis  by  the  Missouri-Lincoln  Trust  Company,  was 
refused.  The  proposed  bond  issue  of  seven  hundred  and  fifty 
thousand  dollars,  by  whicli  Lewis  was  intending  to  consolidate  his 
entire  real-estate  interests  and  pay  part  of  his  million  dollars  to 
the  capital  of  the  bank,  could  not  be  consummated.  A  further 
loan  of  one  hundred  thousand  dollars  from  the  Royal  Trust  Com- 
pany of  Chicago  fell  through.  All  the  negotiations  looking  to  the 
co-operation  of  the  banks  and  bankers  of  St.  Louis  in  the  forma- 
tion of  an  advisory  board  of  fifteen  for  the  People's  Bank  were 
stopped.  The  further  co-operation  of  bankers  in  the  smaller  cities 
could  be  had  no  longer.  The  manufacture  of  children's  steel  safes 
and  many  similar  details  of  business  were  abruptly  interrupted.   All 


338  THE  SIEGE  OF  UNIVERSITY  CITY 

these  and  many  similar  effects  resulted  from  the  terrific  scandal  of 
Betts'  article. 

It  is  perfectly  true  to  say  that  a  similar  interruption  to  business 
■would  have  occurred  anyhow  on  the  issuance  of  the  fraud  order. 
But  a  fraud  order  is  not  ordinarily  issued  until  after  a  hearing 
following  a  citation  to  appear.  Lewis  had  no  chance  to  appear. 
The  report  was  published.  The  disaster  to  his  credit  occurred. 
All  this  took  place  without  warning.  The  whole  was  caused  by  the 
public  issue  of  a  confidential  Government  report  through  the  care- 
lessness or  connivance  of  a  postoffice  inspector. 

The  scenes  attending  the  investigation  of  University  City  by  the 
Federal  and  State  authorities,  and  the  interplay  of  personalities  in 
the  numerous  skirmishes  and  legal  battles  that  next  followed,  still 
live  in  the  memories  of  many  St.  Louisans,  and  in  the  great  scrap- 
books  of  clippings  from  the  St.  Louis  newspapers  of  those  days 
that  have  been  stowed  away  in  Lewis'  private  vault.  The  story 
was  a  spectacular  one.  The  interests  involved  were  enormous, 
nation-wide.  A  fight  was  on  in  which  great  personalities  were 
engaged.  The  air  was  thick  with  rumors  as  to  further  govern- 
mental action.  Nobody  seemed  to  know  just  what  was  behind  the 
thunderous  attack  on  Lewis  and  his  enterprises,  but  everybody  be- 
lieved that  it  must  be  something  which  did  not  appear  upon  the 
surface.  Fraud !  the  word  itself  was  a  mystery.  The  case  was 
a  mystery.  The  public  loves  a  mystery.  So  the  newspapers  made 
much  mystery  about  it.  Talk  about  Lewis  and  the  People's  Bank 
was  in  every  mouth. 

THE   P-D     FOLLOW-UP     CAMPAIGN. 

The  Post-Dispatch,  evidently  animated  by  the  same  motives  which 
prompted  its  first  publication,  now  strengthened  by  the  necessity  for 
self-justification,  followed  up  its  "scoop"  with  a  vigorous  and  insist- 
ent campaign  of  denunciation.  The  St.  Louis  Star-Chronicle,  which 
was  to  have  passed  into  Lewis'  entire  control  with  a  view  to  its 
development  as  a  strong  rival  of  the  great  St.  Louis  paper,  sprang 
to  his  defense.  The  other  local  newspapers  strove  to  keep  a  neu- 
tral impartiality.  Among  weekly  publications,  the  Mirror,  rejoicing 
at  the  destruction  it  had  helped  to  cause,  joined  the  hue  and  cry 
of  the  Post-Dispatch.  The  Censor  came  out  vigorously  in  Lewis' 
behalf.  Wetmore's  Weeklj'-  also  took  up  the  cudgels  for  Lewis,  par- 
ticularly against  Swanger  and  the  State  administration.  AU  these 
publications  will  hereafter  be  drawn  upon  for  picturesque  incident 
and  local  color  which  will  assist  the  imagination  to  reconstruct  the 
state  of  public  sentiment  and  opinion. 

The  Post-Dispatch  of  June  1,  1905,  ran  a  four-column  story,  ac- 
companied by  a  five-column  "panoramic"  view  of  University  Heights, 
with  heading  thus:  "State  to  Name  Temporary  Cashier  for  Lewis' 
Bank:  President  of  $2,500,000  Mail  Order  Institution  Proposes 
Such  Course  Pending  Investigation :  Conferences  with  Secretary 
Swanger  and  Others  On,  to  Determine  Further  Course  of  Action: 


THE  DREYFUS  CASE  OF  AMERICA  339 

Other  Bankers  Expected  Are  Not  Present:  Cited  to  Show  Why- 
Fraud  Order  Should  Not  Issue."  The  opening  paragraphs  read 
thus: 

President  E.  G.  Lewis,  of  the  five  million  dollar  People's  United  States 
Bank,  today  proposed  to  Secretary  of  State  Swanger  and  State  Bank- 
Examiner  Cooli  that  they  name  a  temporary  cashier  to  look  after  the 
finances  of  the  bank  until  the  investigation  is  concluded  by  the  State  De- 
partment. The  proposition  was  made  by  Lewis  at  a  conference  of  the  State 
officials  at  the  Southern  Hotel,  beginning  at  12:15  p.  m.  today.  Certain 
bankers  who  were  expected  to  be  present  could  not  come  and  it  was  feared 
that  the  meeting  would  fall  through. 

At  noon,  Lewis  himself  arrived  and  met  Swanger  and  Cook  in  the  lobby. 
They  proceeded  to  Swanger's  room.  It  would  seem  by  the  requirements 
laid  down  for  President  Lewis  in  the  letter  of  the  secretary  of  state  of 
May  1,  that  Lewis  must  raise  about  half  a  million  dollars.  Loans  aggregat- 
ing $411,000  by  the  bank  to  Lewis,  endorsed  by  officials,  directors  and  cor- 
porations controlled  by  him,  now  classed  as  cash  assets  of  the  bank,  must 
be  taken  up  and  paid  at  once  by  requirement  of  Secretary  Swanger.  Mr. 
Swanger  said  later  that  he  had  taken  charge  of  all  of  the  assets  of  the  bank 
and  that  he  held  the  keys  to  the  safe  where  all  the  bank's  money  and  cer- 
tificates are  kept. 

While  the  State  of  Missouri  was  acting  through  Secretary  of  State 
Swanger,  the  U.  S.  Government  moved  also.  Late  Wednesday  afternoon, 
a  citation  to  appear,  either  by  mail  or  in  person,  on  June  16,  and  show 
cause,  to  the  assistant  attorney-general,  why  the  fraud  order  should  not 
be  issued  against  him  prohibiting  the  use  of  the  mails  to  his  bank,  was 
served  on  Mr.  Lewis. 

Apparently  at  the  time  of  writing  this  article  the  fact  that  instead 
of  complying  with  the  requirements  of  the  secretary  of  state  and 
attempting  to  raise  half  a  million  dollars  in  the  face  of  the  "con- 
certed action"  against  him,  Lewis  had  picked  up  the  gage  of  battle 
and  increased  the  loans  of  the  People's  United  States  Bank  to  him- 
self and  his  enterprises  to  the  amount  of  nearly  half  a  million  dol- 
lars additional,  was  still  unknown  in  the  office  of  the  Post-Dispatch. 

Under  the  caption — "Prominent  St.  Louisans  Withdraw  from 
Bank,"  the  Post-Dispatch  proceeds  to  recite  alleged  interviews  with 
certain  of  the  incorporators  purporting  to  be  a  repudiation  of  all 
responsibility  in  the  premises.  Under  the  caption,"  Further  De- 
tails of  Postoffice  Investigation  of  Lewis'  Bank,"  dated  "Special  to 
the  Post-Dispatch,  Washington,  June  1,"  but  obviously  drawn  from 
the  inspectors'  report  procured  by  Betts  from  Sullivan,  emphasis 
is  laid  upon  an  alleged  fraudulent  dividend  of  two  per  cent.  This 
was  based  upon  the  circumstance  that  Miss  F.  Ellen  Ayars  of  New 
Richmond,  Minn.,  subscribed  $1.00  for  the  stock  of  the  bank  on 
September  17,  1904,  and  received  on  March  2,  1905,  a  passbook 
with  a  credit  of  one  cent  dividend  upon  one  dollar  remittance  for 
stock.     From  this  fact,  the  following  conclusion  was  drawn: 

He  was,  therefore,  paying  a  dividend  of  about  two  per  cent  per  annum 
at  a  time  when  the  bank  had  not  earned  a  dividend  and  was  practically 
insolvent  from  the  misuse  of  funds  from  capital  stock. 

Under  the  caption,  "Says  He  Drew  Salary,"  this  occurs: 
In  support  of  the  inspectors'  statement  that  Lewis  drew  a  salary  from 
the  bank  at  a  time  when  the  bank  was  not  in  existence,  and  when  it  was 


340  THE  SIEGE  OF  UNIVERSITY  CITY 

alleged  he  had  no  riglit  to  draw  salary  as  president,  the  report  enumerates 
amounts  alleged  to  have  been  drawn  by  hun  for  the  different  months, 
totaling  $16,598.55. 

swanger's  famous  demands. 

Under  the  heading,  "Proxies  Create  Suspicion  and  Constitute 
Dangerous  Power/'  is  printed  a  letter  which  certainly  was  not  pub- 
lic proi^erty,  and  which  could  hardly  have  fallen  into  the  hands  of 
the  Post-Dispatch  for  publication,  except  by  the  authority  of  one 
of  the  public  functionaries  concerned.  The  publication  of  this  and 
other  official  documents  in  the  Post-Dispatch,  without  protest  by 
either  the  State  or  Federal  authorities,  would  seem  to  admit  that 
newspaper  definitely  to  the  rank  of  their  semi-official  organ.  As 
this  letter  occupies  a  prominent  place  among  the  official  allegations 
of  misconduct  ujion  Lewis'  part,  this  entire  article  will  be  quoted: 

Following  is  the  letter,  under  date  of  May  19,  received  by  Lewis  from 
Secretary  of  State  Swanger,  following  the  examination  of  the  People's 
United  States  Bank  by  State  Bank-Examiners  Cook  and  Nichols: 

The  examination  of  your  bank,  commenced  on  April  3,  has  progressed 
sufficiently  to  justify  me  in  making  the  following  observations:  Subscrip- 
tions to  the  capital  stock  of  your  bank  were  secured  largely  through  ad- 
vertisements made  in  the  Woman's  Magazine  and  Woman's  Farm  Journal, 
two  journals  under  your  control,  over  your  signature.  The  plans  of  or- 
ganization and  the  manner  of  conducting  the  business  were  fully  set  out 
in  these  communications.  On  account  of  the  large  number  of  your  stock- 
holders, located  in  almost  every  state  of  the  Union,  and  their  small  hold- 
ings, this  department  insists  that  all  these  promises  be  made  good  and 
believes  absolute  good  faith  on  your  part  is  necessary  for  the  success  of 
the  bank.  We  believe  some  of  these  promises  have  been  openly  violated 
and  other  implied  promises  have  not  been  kept.  In  so  far  as  these  promises 
are  not  at  variance  with  good  banking,  this  department  will  insist  that 
they  be  kept,  even  though  the  banking  laws  of  our  State  are  not  being  vio- 
lated. 

Fairness  dictates  that  the  allotment  of  stock  to  subscribers  be  made  in 
the  order  in  which  their  subscriptions  were  received;  and,  furthermore,  that 
those  taking  stock  on  the  installment  plan  are  as  nmch  entitled  to  their 
allotment  of  stock,  and  in  the  order  their  subscriptions  were  received,  as 
are  those  that  paid  in  cash;  and,  above  all,  no  discrimination  should  be 
made  in  the  allotment  on  account  of  the  signing  or  not  signing  of  the  proxies 
sent  out  by  you  at  the  time  you  advised  the  subscribers  that  the  stock  had 
been  alloted  to  them.  These  proxies  contain  provisions  which  look  very 
suspicious  and  caused  a  number  of  subscribers  to  complain  to  this  depart- 
ment. Proxies  were  intended  to  subserve  the  interests  of  the  stockholders. 
When  sought  by  an  officer  of  the  corporation  they  create  a  suspicion,  and 
when  largelj''  obtained,  they  place  in  his  hands  a  very  dangerous  power. 
The  obtaining  of  these  proxies  in  large  numbers  in  their  present  form  we 
believe  to  be  against  public  policy,  and  if  the  wishes  of  this  department 
were  consulted,  these  proxies  would  all  be  returned  to  the  stockholders. 

The  manner  of  organization  puts  into  your  hands  the  selection  of  the 
officers  and  board  of  directors.  The  law  places  the  management  of  the 
bank's  affairs  in  the  hands  of  the  board  of  directors.  The  present  board  is 
composed  of  the  officers  of  tlie  Lewis  Publishing  Company,  employees  of 
your's,  thus  j)lacing  the  entire  management  virtually  in  you.  These  gentle- 
men were  to  ha\e  been  the  executive  officers;  and  seven  other  men,  whose 
qualifications  were  fully  set  out  in  your  literature,  were  to  be  selected  as 
the  board  of  directors.  Your  bank  has  now  i)ecn  in  operation  six  months 
and  this  board  lias  not  been  named.    The  interests  of  stockholders  and  de- 


THE  DREYFUS  CASE  OF  AMERICA  3<tl 

positors  demand  that  these  directors  be  named  and  the  management  of 
the  affairs  of  the  bank  vested  in  them.  The  success  of  the  bank  depends 
so  largely  upon  the  character  of  men  selected  to  be  directors,  that  I  ask 
that  the  list  of  gentlemen  so  selected  be  submitted  to  this  department  be- 
fore their  appointments  are  made. 

You  set  out  to  the  general  public  in  your  literature  the  lines  along 
which  the  business  of  the  bank  would  be  conducted.  I  will  not  imdertake 
to  pass  upon  these  features,  but  will  leave  them  for  further  consideration, 
and  to  be  worked  out  by  your  officers  and  directors.  But  you  made  pledges 
to  the  people  that  certain  things  would  not  be  done,  that  I  hold  should  now 
be  kept.  They  are  within  your  power  to  keep,  and  the  keeping  of  them 
would  in  no  way  affect  the  solvency  of  the  bank.  On  the  contrary,  these 
pledges  no  doubt  gave  the  people  confidence  in  your  plans,  and  are  known 
to  the  general  public  to  point  to  the  rocks  against  which  nine-tenths  of 
our  banks  have  been  wrecked. 

I  have  especially  in  mind  your  loans  to  officers  and  directors  and  to  firms 
and  corporations  in  which  officers  and  directors  are  interested.  Of  the 
$321,000  of  loans  held  by  your  bank  on  the  day  of  examination  a  large 
portion  were  of  this  class  of  loans.  These  loans  may  all  be  good,  but  are 
in  such  gross  violation  of  your  pledges  to  the  people  that  I  insist  they 
should  be  taken  up  with  as  little  delay  as  possible. 

You  exceeded  your  charter  rights  when  you  invested  the  funds  of  the 
bank  in  the  various  stocks  of  other  corporations.  Such  stocks  as  you  now 
hold  should  be  disposed  of  without  exception,  as  soon  as  it  can  be  done. 
I  might  say  in  this  connection  that  it  is  outside  of  the  banking  business 
and  your  charter  powers  to  deal  in  stocks.  I  speak  of  this  because  I  no- 
ticed a  tendency  on  the  part  of  yourself  and  associates  to  be  promoters 
and  use  the  funds  and  good  offices  of  the  bank  in  that  direction.  This 
business  must  be  kept  separate  and  apart  from  the  banking  business.  In 
fact,  your  connection  with  this  bank  and  the  connection  of  any  of  your 
associates  in  the  management  of  this  bank,  demand  that  each  of  you  sever 
your  connection  with  all  outside  enterprises  that  are  in  the  least  specu- 
lative. 

I  found  in  checking  over  the  cash  account,  $5,945.95  in  drafts  on  the 
Missouri-Lincoln  Trust  Company,  made  by  the  Development  and  Invest- 
ment Company,  of  which  E.  G.  Lewis  is  president.  L^pon  inquiry  at  the 
Missouri-Lincoln  Trust  Company,  I  found  that  the  Development  and  In- 
vestment Company  had  but  §98t.38  to  its  credit.  The  carrying  of  these 
drafts  is  irregular. 

I  am  not  readj^  to  take  up  with  you  the  large  promotion  expenses  which 
are  now  carried  in  the  note  of  $146,375.68,  but  will  leave  this  also  for  fur- 
ther consideration  and  to  be  taken  up  in  person  with  you  and  your  board 
of  directors.  I  am  satisfied  a  large  part  of  this  cannot  be  charged  up 
against  the  bank. 

I  want  to  know  definitely  who  the  stockholders  of  the  People's  United 
States  Bank  are,  where  they  reside,  and  the  amount  of  stock  held  by  each. 
The  books  of  the  bank  should  show  these  facts  and  this  department  is  en- 
titled to  the  information.  I  do  not  wish  to  impose  upon  you  the  labor 
necessary  to  prepare  this  list  of  stockholders.  But  I  do  want  the  books 
of  the  bank  to  show  definitely  and  specifically  who  the  stockholders  are, 
their  residence,  and  the  amount  of  stock  held  by  each,  so  that  my  exam- 
iners may  check  this  account.  If  the  bank's  books  do  not  show  these  facts, 
I  would  thank  you  to  have  such  information  properly  set  out  upon  the 
books  of  the  bank  and  with  as  little  delay  as  possible.  When  the  above 
is  done  and  you  have  completed  your  issuance  of  certificates  of  stock  to 
those  to  whom  was  alloted  the  $1,500,000  increase,  I  will  thank  you  to 
advise  this  department. 

My  examination  discloses  the  fact  that  you,  for  yourself,  took  only  a 
small  part  of  the  original  stock,  but  took  it  largely  for  others.  This  ori- 
ginal stock  is  only  half-paid,  and  those  for  whom  you  took  the  stock  under- 


342  THE  SIEGE  OF  UNIVERSITY  CITY 

stood  it  was  to  be  fully  paid  and  nonassessable.  The  original  stock  not 
being  fully  paid,  is  subject  to  assessment,  and  for  this  reason  the  State  is 
entitled  to  know  who  the  original  stockholders  are.  The  facts  are,  how- 
ever, that  at  the  time  you  took  out  the  original  charter  of  $1,000,000,  you 
had  received  from  subscribers,  and  should  have  had  on  hands,  suflScient 
funds  to  have  paid  this  original  stock  in  full.  These  being  the  facts,  this 
department  insists  that  this  original  stock  be  paid  in  full  and  the  stock  be 
alloted  to  those  who  were  subscribers  at  the  time  the  charter  was  taken 
out.  I  will,  however,  concede  to  you  your  right  to  take  for  yourself  such 
part  of  this  original  stock  as  you  may  choose  to  take,  or  may  have  taken, 
and  concede  to  you  your  privilege  to  pay  in  full  or  one-half,  but  I  do  in- 
sist that  the  funds  placed  in  your  hands  by  subscribers  be  used  to  purchase 
only   fully-paid  stock. 

You  may  think  I  assume  too  much  in  this  matter,  but  I  assure  you  it 
is  only  my  desire  to  see  that  everybody  interested  gets  a  "square  deal." 
Those  whom  you  represent  are  so  scattered,  their  interests  so  small,  and 
their  means  of  knowing  the  facts  so  hampered,  that,  the  responsibility 
being  placed  on  this  department  by  yourself,  I  assume  to  take  notice 
of  facts  and  conditions  that  are  ordinarily  left  to  be  worked  out  between 
the  parties  themselves. 

Please  have  prepared  and  send  me  a  copy  of  your  daily  statement 
at  close  of  business  May  18,  and  a  list  of  your  notes,  stocks  and  bonds, 
also  the  amount  to  the  credit  of  E.  G.  Lewis  special  and  E.  G.  Lewis  col- 
lection. I  will  visit  your  institution  again  in  the  near  future  with  a 
view  of  completing  this  examination. 

THE     FIRST    WAR    NEWS. 

The  following  highly  significant  paragraph  occurs  in  a  special 
dispatch  to  the  Globe-Democrat  from  its  Washington  correspondent 
under  date  of  May  31: 

It  was  learned  at  the  treasury  department  that  repeated  efforts  have 
been  made  by  interested  persons  to  start  an  investigation  of  the  People's 
United  States  Bank  through  that  department.  The  matter  was  placed 
before  Mr.  Ridgeley,  comptroller  of  the  currency,  and  later  reached  the 
secretary  of  the  treasury.  Mr.  Lewis  sent  on  copies  of  all  literature  he 
had  circulated  in  connection  with  the  banking  enterprises,  and  the 
comptroller  said  he  could  see  nothing  that  was  not  legitimate  about  the 
representations  made.  The  documents  and  papers  of  the  treasury  depart- 
ment are  always  available  for  the  Postoffice  Department  and  the  Lewis 
papers  might  have  been  sent  over  to  the  latter  on  request. 

That  department  of  the  Administration,  in  other  words,  best  qual- 
ified to  give  judgment  on  all  matters  pertaining  to  banks  and  bank- 
ing could  see  no  grounds  for  action  against  the  People's  Bank. 

The  front  page  of  the  regular  edition  of  the  Post-Dispatch  of 
Jiine  2,  1905,  was  graced  by  the  cartoon  shown  elsewhere,  depicting 
Lewis  and  Cabot,  wherein  it  will  appear  that  the  cartoonist  was  not 
insensible  to  editorial  suggestion.  The  principal  news  item  runs  as 
follows : 

E.  G.  Lewis,  President  of  the  People's  United  States  Bank,  on  leaving 
a  conference  with  Secretary  of  State  Swanger,  Assistant  Attorney-General 
Kennish  and  State  Bank-Examiner  Cook,  which  began  at  the  South- 
ern Hotel  at  10:45  this  morning,  stated  to  a  Post-Dispatch  reporter  that 
8  new  board  of  directors  for  the  bank  would  be  elected.  Lewis  was 
accompanied  by  H.  S.  Priest  and  Shepard  Barclay,  his  attorneys. 

Attorney-General  Iladley  has  been  called  in  by  the  secretary  of  state 
who  telegraphed  him  immediately  after  the  conference  closed.  It  is  un- 
derstood that  Lewis  opposed  Swanger'a  demand  that  he  take  up  the  loans 


THE  DREYFUS  CASE  OF  AMERICA  3i3 

made  by  the  bank  to  himself  and  raised  questions  of  law.  This  drew  the 
attorney-general  into  the  conference.  From  another  source  it  was  learned 
that  a  formal  meeting  of  the  board  of  directors,  attended  by  the  state 
officials,  will  be  held  Friday  afternoon  at  the  Woman's  Magazine  Building. 
A  new  board  containing  at  least  three  representative  St.  Louis  business 
men  approved  by  the  secretary  of  state  will  then  be  elected.  Asked  if  he 
had  submitted  a  list  of  names  for  the  secretary  of  state's  approval,  Lewis 
said  he  had.  Asked  regarding  Swanger's  requirements,  he  said  the  new 
board  of  directors  would  attend  to  that. 

ALIGNMENT    FOR    BATTLE. 

The  remainder  of  the  story  was  taken  up  chiefly  by  alleged  in- 
terviews with  St.  Louis  bankers  purporting  to  criticise  the  People's 
United  States  Bank,  and,  with  few  exceptions,  repudiating  all  re- 
sponsibility for  and  relations  with  that  institution.  Among  the 
critics  of  the  bank  were  mentioned  August  Schlafly,  president,  and 
Dr.  Pinckney  French,  vice-president  and  treasurer  of  the  Missouri- 
Lincoln  Trust  Company.  This  institution  had  previously  passed  a 
loan  of  two  hundred  thousand  dollars  to  Lewis'  credit.  It  had 
agreed  to  purchase  his  proposed  bond  issue  of  seven  hundred  and 
fiftj""  thousand  dollars.  At  that  time  approximately  seven  hundred 
thousand  dollars  of  the  bank's  funds  were  on  deposit  in  its  vaults. 
Both  Schlafly  and  French  had  been  incorporators  of  the  bank.  Both 
were  personally  friendly  to  Lewis.  But  in  the  then  existing  state 
of  public  opinion  neither  could  afford  to  disregard  the  interests  of 
the  institution  for  which  they  were  primarily  responsible. 

H.  A.  Forman,  president  of  the  Fourth  National  Bank,  volun- 
teered a  statement  that  he  had  been  asked  to  become  a  director  of 
the  People's  United  States  Bank,  but  had  declined.  John  D.  Davis, 
president  of  the  Mississippi  Valley  Trust  Company,  said  that  none 
of  the  officers  or  directors  of  that  institution  had  any  connection 
with  the  People's  United  States  Bank.  Four  other  downtown  banks 
and  trust  companies  refused  to  make  any  statement  upon  the  prin- 
ciple that  the  names  of  depositors  could  not  be  disclosed.  George 
H.  Augustine,  vice-president  of  the  Carleton  Dry  Goods  Company; 
Theodore  F.  IMeyer,  vice-president  of  the  Meyer  Brothers  Drug 
Company,  and  Porter  White,  declined  to  express  any  opinions.  James 
F.  Coyle,  of  Coyle  &  Sargeant,  who  afterwards  with  Mr.  Meyer 
became  a  member  of  the  reorganized  board  of  directors  was  quoted 
thus: 

I  have  been  in  Chicago  three  days.  I  know  practically  nothing  about 
the  matter,  except  what  I  saw  in  this  morning's  papers.  I  am  a  stock- 
holder in  the  bank,  however,  and  expect  to  remain  one.  I  was  one  of  the 
original  signers  of  the  charter  and  took  five  hundred  dollars'  worth  of 
stock,  which  is  the  full  limit  that  anyone  could  sign  for.  I  do  not  believe 
anything  is  wrong  about  the  bank.  I  think  when  the  investigation  is 
through  everything  will  be  found  all  right.  I  have  great  faith  in  Lewis. 
I  think  he  is  an  honest  man  and  that  he  will  do  whatever  the  State  advises. 

With  this  clash  of  conflicting  voices  amid  the  confusion  and 
smoke  of  battle  and  one  man's  voice  vigorously  lifted  to  vouch  for 
Lewis'  honor  and  integrity,  this  chapter  may  fitly  close.  The  battle, 
however,  had  only  just  begun. 


CHAPTER  XV. 

INVESTIGATION  BY  YELLOW  JOURNALISM. 

The  Post-Dispatch  vs.  Swanger — A  Hitch  in  the  "Concerted 
Action"  Program — Forcing  Swanger's  Hand — The  Re- 
organized Directorate — The  Attorney-General's  Opin- 
ion. 

St.  Louis,  May  31,  1905. 
Chief  Postoffice  Inspector, 
Washington,  D.  C. 
Secretary  of  State  Swanger  here  today.  Greatly  exercised  over  Lewis 
matter.  He  has  been  criticised  for  failure  to  act,  and  recently  ordered 
Lewis  to  restore  the  .$400,000  withdrawn  from  bank,  to  cancel  forged* 
proxies,  to  account  for  all  suliscriptions  received,  to  make  good  all  ma- 
terial representations,  and  to  select  representative  body  of  directors  sub- 
ject to  approval  secretary  of  state.  Should  money  not  be  returned  today 
Swanger  may  take  charge  of  bank.  At  secretary's  request  I  have  asked 
postmaster  to  withhold  delivery  of  citation  imtil  4  o'clock  this  afternoon 
sharp,  purpose  of  facilitating  collection  of  shortage.  Situation  quite 
acute  on  account  of  its  importance  and  liecause  Woman's  Magazine  now 
receiving  second-class  privileges  largely  by  sufferance  of  Department  Is, 
and  has  been,  the  vehicle  for  promotion  of  bank  and  for  Lewis  schemes. 
I  suggest  concerted  action  part  of  assistant  attorney  and  third  assistant 
on  reports  of  IGth  instant.     Please  take  up  with  proper  officers. 

Fulton,  Inspector-in-Charge. 

Such  is  the  famous  "concerted  action"  telegram  dispatched  by 
Robert  M.  Fulton,  inspector-in-charge  at  St.  Louis,  to  Chief  Post- 
office  Inspector  Vickery  at  Washington  the  very  day  that  the  Post- 
Dispatch  published  its  celebrated  extra.  Its  purpose  was  to  hurry 
action  by  the  Department.  It  closes  with  the  suggestion  for  con- 
certed action  by  Goodwin  and  Madden  on  both  the  postoffice  in- 
spectors' reports,  recommending  a  fraud  order  against  the  bank 
and  the  withdrawal  of  the  second-class  privilege  from  the  two  mag- 
azines.    Commenting  on  this  telegram.  Madden  remarks: 

Observe  its  air  of  assurance.  Plainly  the  man  who  composed  and 
signed  it  had  little  doubt  that  the  recommendations  in  the  two  reports 
which  he  referred  to  would  be  adopted. 

The  policy  of  "concerted  action"  thus  plainly  avowed  by  Fulton 
brings  up  tlie  question  as  to  wliat  part  his  personality  and  opinions 
played,  both  in  the  inception  and  during  the  continuance  of  the 
Siege.  On  the  Kansas-Bristow-Anti-Dice  theory,  Fulton  was  the 
arch-conspirator.  It  was  he  whose  name  was  associated  with  that 
of  Vickery  in  tlic  report  quoted  by  Bristow  when  Lewis  was  pilloried 
as  a  "get-ricli-quick"  man  and  violator  of  tlie  law.  It  was  F'ulton 
who  was  said  bv  the  friends  of  Dice  to  have  been  associated  with 


'Evidently   an   error   in   transmission.     The  word  intended  is  presumably  "forced." 

344 


THE  DREYFUS  CASE  OF  AMERICA  845 

him  by  Bristow  as  the  latter's  confidential  representative.  It  was 
Fulton  who  was  advanced  by  Bristow  over  the  heads  of  experienced 
and  capable  inspectors  preceding  him  by  long  years  of  faithful  and 
efficient  service.  It  was  Fulton  who  was  placed  by  Bristow  in 
charge  of  important  special  investigations,  and  who  was  associated 
with  Bristow,  himself,  in  the  investigation  of  the  Postoffice  Depart- 
ment in  Washington.  And,  upon  the  death  of  Dice,  it  was  Fulton 
who  succeeded  to  the  vacant  place  and  thus  inherited  the  complaints 
against  Lewis  and  his  enterprises,  which  had  been  made  up  in 
Washington  and  submitted  to  Dice  for  examination  during  the  pe- 
riod when  the  latter  and  some  of  his  associates  were  investors  in 
the  Lewis  enteriorises.  Fulton,  therefore,  did  not  take  up  the  Lewis 
case  with  an  open  mind.  He  came  to  it  as  part  and  parcel  of  an 
old  and  bitter  feud  between  the  friends  of  Dice  and  those  of  Bris- 
tow. Let  us  see  whether  or  not  his  official  conduct  bears  any  evi- 
dence of  bias  or  prejudice  against  Lewis. 

The  "concerted  action"  telegram  was,  of  course,  a  confidential  and 
privileged  communication.  Neither  the  fact  that  it  had  been  sent  nor 
its  contents  were  known  to  Lewis  or  the  public  at  the  time.  The  full 
story  of  this  most  remai-kable  message  belongs  more  properly  to  the 
attack  on  the  Woman's  Magazine.  For  Third  Assistant  Madden  testi- 
fies that  it  was  this  which  first  suggested  to  him  the  possibility  of  a 
conspiracy  within  the  Postoffice  Department  to  put  Lewis  out  of  busi- 
ness. Just  now  our  attention  must  be  confined  to  what  was  known  to 
the  public  at  St.  Louis.  We  are  especially  concerned  with  the  cam- 
paign of  the  Post-Dispatch  to  bring  about  official  action  by  Secretary 
of  State  Swanger.  Observe  from  this  point  of  view,  that  Fulton's 
policy  of  concerted  action  embraced  the  banking  dei^artment  of  the 
State  of  Missouri  as  well  as  the  bureaus  of  the  assistant  attorney  and 
third  assistant  at  Washington.  Note  the  intimacy  of  Fulton's  work- 
ing relation  with  Swanger.  "Swanger  has  been  criticized,"  says 
Fulton,  "for  failure  to  act."  By  whom.''  Evidently  by  the  Post- 
Dispatch.  "At  the  secretary's  request,"  says  Fulton,  "I  have  asked 
postmaster  to  withhold  delivery  of  citation  until  4  o'clock  this  after- 
noon sharp,  purpose  of  facilitating  collection  of  shortage."  What 
shortage?  Evidently  the  Carlisle  note,  which  was  then  in  process 
of  collection,  as  this  was  the  only  shortage  which  the  secretary  of 
state  is  known  to  have  made  any  effort  to  collect  as  of  this  date.  This 
single  message  thus  links  the  name  of  Fulton  with  those  of  Swanger, 
Wyman  (postmaster  at  St.  Louis),  Vickery,  Goodwin  and  Madden. 
It  reveals  him  as  the  central  spider,  industriously  weaving  the  net  in 
which  Lewis  and  his  affairs  were  afterward  entangled. 

Nor  is  Fulton's  concerted  action  telegram  more  significant  in  what 
it  says  than  in  what  it  omits  to  say.  Not  one  word  does  it  contain 
as  to  the  Post-Dispatch  extra.  Not  one  word  as  to  the  purchase  of 
the  St.  Louis  Star.  Not  one  word  as  to  the  Carlisle  check,  the  collec- 
tion of  which  the  secretary  of  state  was  so  desirous  of  preventing. 
A  conspiracy  consists  in  two  or  more  persons  getting  their  heads 


346  THE  SIEGE  OF  UNIVERSITY  CITY 

together  to  commit  a  legal  wrong.  Was  this  telegram  dispatched 
from  St.  Louis  before  or  after  the  Post-Dispatch  extra  appeared 
upon  the  streets.^  Did  Fulton  know  that  the  inspectors'  report  had 
been  or  would  be  published  that  same  day.''  Must  we  account  for 
the  "concerted  action"  telegram  having  been  flashed  to  Washington 
just  as  the  Post-Dispatch  extra  was  flung  upon  the  streets  and  when 
Swanger  was  in  town  greatly  exercised  on  account  of  criticisms  by 
that  newspaper,  as  a  mere  coincidence?  Or  would  such  a  theory 
strain  credulity  to  the  breaking  point.''  Did  Fulton,  Swanger,  Betts, 
Bovard,  Dunlop  or  Johns  (the  last  four  all  of  the  Post-Dispatch),  or 
any  of  them,  have  their  heads  together  on  the  morning  of  May  31 
to  prevent  the  consummation  by  Lewis  of  the  purchase  of  the  St. 
Louis  Star,  and  if  necessar}"^  to  that  end  to  wreck  the  People's  Bank? 
Was  such  activity  and  agreement  among  them,  if  any  such  took  place, 
designed  to  further  an  act  wrongful  in  morals  or  in  law?  And,  if 
so,  did  the  conspirators  accomplish  their  design?  Such  are  the  ques- 
tions which  we  are  to  consider  in  the  present  chapter. 

THE     POST-DISPATCH     VS.     SWANGER, 

A  public  assault  on  a  solvent  bank,  like  that  made  by  the  Post-Dis- 
patch in  its  "great  scoop,"  set  forth  in  the  preceding  chapter,  is  a 
serious  business.  That  newspaper  had  felt  itself  forced  to  strike 
on  May  31,  because  Lewis'  deal  for  the  purchase  of  the  St.  Louis 
Star  was  to  have  been  consummated  next  day.  Betts  says  frankly 
that  tliis  action  was  taken  before  he  even  knew  with  certainty  that 
a  citation  would  be  issued.  Hard  upon  the  heels  of  the  story,  the 
citation  came.  But  this  was  not  in  itself  enough  to  justify  an  attack 
upon  a  solvent  institution.  Outraged  public  sentiment  and  a  suit  for 
libel  in  heavy  damages  confronted  the  management  unless  their  on- 
slaught was  followed  by  some  official  action.  Hence,  the  manage- 
ment of  the  Post-Dispatch  now  unlimbered  its  guns  and  followed  its 
flrst  charge  with  an  insistent  and  persistent  campaign  of  denuncia- 
tion. 

The  strategic  point  of  attack  at  the  moment  was  the  State  banking 
department  of  which  Secretary  of  State  Swanger  w^as  the  head.  The 
Post-Dispatch  probably  expected  to  find  him  a  willing  ally.  They 
had  lent  him  powerful  support  during  the  campaign  by  which  he  had 
been  newly  elected  to  his  office.  Indeed,  in  the  opinion  of  well  in- 
formed political  observers,  they  had  decisively  influenced  his  elec- 
tion. Not  only  a  natural  sense  of  gratitude  for  past  favors,  but  an 
equally  lively  expectation  of  favors  to  come,  might  well  have  been 
thought  by  the  managers  of  that  newspaper  to  promise  them  almost 
an}'^  sort  of  aid  that  the  secretary  of  state  could  give. 

A  totally  unexpected  obstacle  was  interposed,  however,  when  it  be- 
came known  that  the  cash  assets  of  the  bank  were  several  times  the 
total  amount  of  its  deposits  and  that  its  loans  were  abundantly  se- 
cured. The  Post-Dispatch  and  its  allies  were  thrown  into  a  quan- 
dary.   The  secretary  of  state  was  forced  to  admit  that  the  bank  was 


THE  DREYFUS  CASE  OF  AMERICA  347 

solvent  and  that,  therefore,  under  the  State  law  he  had  no  legal  right 
to  force  a  receivership.  His  power  was  strictly  limited.  He  had  the 
right  to  make  certain  demands  upon  the  bank  as  to  the  details  of 
its  practical  oj^erations.  But  should  its  officers  and  directors  refuse 
to  comply,  his  only  recourse  was  to  advise  the  attorney-general  of  all 
the  circumstances  in  order  that  the  latter  might  bring  the  matter  into 
court.  Thus,  however  willing  Swanger  might  have  been  to  co-oper- 
ate with  the  Federal  authorities,  to  repay  the  political  friendship  of 
an  influential  newspaper,  or  to  secure  for  a  personal  friend  a  fat  re- 
ceivership, there  were  no  tenable  legal  grounds  upon  which  the  seiz- 
ure of  the  bank  could  be  sustained. 

The  position  of  the  State  authorities  of  Missouri  during  the  period 
prior  to  the  issuance  of  the  fraud  order  was  thus  a  most  uncomfort- 
able one.  The  examination  of  the  bank's  affairs  proved  that  it  was 
solvent,  and  that  there  had  been  no  serious  violation  of  the  State 
banking  laws.  The  conference  of  the  secretary  of  state  and  the  at- 
torney-general with  Lewis  and  his  counsel  on  June  1,  showed  clearly 
that  there  was  no  good  reason  why  the  demands  of  the  banking  de- 
partment could  not  be  complied  with,  or  why  in  that  case  it  should 
be  interfered  with  further. 

This  natural  and  easy  solution  of  the  problem,  however,  did  not 
suit  the  necessities  of  the  Post-Dispatch.  The  People's  Bank  as  a 
going  concern,  backed  by  the  approval  of  the  State  banking  depart- 
ment and  with  assets  of  some  three  million  dollars,  would  be  in  a 
position  to  exact  and  enforce  heavy  damages  if  it  should  turn  out 
that  the  recommendations  of  the  postoffice  inspectors  could  not  be 
sustained  at  Washington,  and  if  no  fraud  order  was  issued.  Hence, 
the  urgency  of  the  Post-Dispatch  to  force  from  the  State  authorities 
an  official  seizure  of  the  bank  which  would  afford  them  some  color  of 
justification.  With  Lewis  and  his  counsel,  upon  the  one  hand,  sup- 
ported by  an  influential  section  of  the  press,  and,  upon  the  other, 
the  Post-Dispatch,  to  which  he  was  so  deeply  indebted,  the  secretary 
of  state  felt  himself  forced  to  temporize.  In  the  end  he  sought  to 
shift  the  responsibility  to  the  Federal  authorities,  by  saying  that  he 
could  take  no  action  unless  a  fraud  order  was  issued  at  Washington. 
The  contest  between  the  officers  of  the  bank  and  the  Post-Dispatch 
over  the  action  of  the  secretary  of  state,  was  as  we  shall  see,  a  drawn 
battle.  The  utmost  point  to  which  Swanger  could  be  driven  was  a 
definite  promise  that,  in  the  event  of  a  fraud  order  the  State  depart- 
ment would  seize  the  bank. 

A  HITCH  IN  THE  ^CONCERTED  ACTION^  PROGRAM. 

No  one  in  the  light  of  what  followed  can  reasonably  doubt  that  at 
this  time  Fulton  and  the  inspectors  associated  with  him  in  St.  Louis 
had  definitely  made  up  their  minds  that  Lewis  must  be  smashed  and 
put  entirely  out  of  business.  The  Post-Dispatch  was  bringing  to 
bear  its  influence  in  their  support.  All  that  seemed  lacking  to  Ful- 
ton's policy  of  "concerted  action"  to  wipe  out  Lewis  and  his  enter- 
prises, was  the  whole-hearted  co-operation  of  the  secretary  of  state 


348  THE  SIEGE  OF  UNIVERSITY  CITY 

and  favorable  action  on  the  inspectors'  recommendations  at  Wash- 
ington. 

The  first  hitch  in  the  "concerted  action"  program  was  the  appar- 
ent willingness  of  the  secretary  of  state  to  negotiate  for  an  armistice 
under  a  flag  of  truce.  For  the  St.  Louis  Republic  on  June  2  indi- 
cated that  the  conference,  which  had  been  held  between  the  State 
authorities  and  the  officers  of  the  bank  on  June  1  promised  to  result 
in  its  continued  operation.  Judge  Selden  P.  Spencer  was  said  to 
have  been  present  as  an  associate  of  the  secretary  of  state.  Major 
H.  L.  Kramer,  vice-president  of  the  People's  Bank,  had  accom- 
panied Lewis.  It  was  asserted  that  the  conference  had  no  relations  to 
the  investigation  and  citation  of  the  bank's  president  by  the  Federal 
authorities.  The  two  examinations  were  said  to  be  entirely  indepen- 
dent. The  investigation  of  the  banking  department,  it  was  said, 
would  doubtless  be  closed  by  the  agreement  on  the  part  of  the  bank 
to  comply  with  the  directions  of  the  secretary  of  state.  In  this  case 
the  latter  would  interpose  no  bar  to  the  bank's  future  operations. 
It  would  seem,  therefore,  that  at  this  time  the  secretary  of  state 
could  find  no  grounds  for  the  drastic  course  of  action  he  afterward 
adopted.  Let  us  see  what  pressure  was  brought  to  bear  upon  him  to 
force  his  hand.  The  final  edition  of  the  Post-Dispatch  on  June  2 
contains  the  following  news  item: 

After  a  three  hours'  conference  concluded  at  1:4'5  p.  m.  Friday,  it  was 
announced  by  the  secretary  of  state  that  he  had  accepted  three  new 
directors  of  the  bank  named  by  Lewis  and  these  men  would  probably  be 
elected.  Mr.  Swanger  said:  "I  have  accepted  three  names  among  those 
submitted  to  me  by  Mr.  Lev/is  as  men  who  would  be  satisfactory  directors 
of  the  People's  United  States  Bank.  I  can  not  identify  them  for  the 
reason  that  they  ha%e  not  yet  notified  me  of  their  acceptance,  although 
they  have  been  informed  of  their  selection.  As  soon  as  we  hear  from  them, 
provided  they  are  willing  to  serve,  we  will  proceed  to  the  Woman's  Maga- 
zine and  hold  the  formal  election. 

The  State  has  not  receded  from  any  of  the  demands  made  of  Mr.  Lewis. 
What  we  regard  as  the  most  important  thing  has  been  accomplished.  That 
is  the  installment  of  a  board  of  directors,  a  majority  of  whom  possess  busi- 
ness qualifications  sufficienT  to  assure  the  safe  and  sound  operation  of  a 
bank.  These  directors  will  be  expected  by  the  department  to  carry  out 
the  requirements  lieretofore  laid  down.  It  will  require,  probably,  two  or 
three  weeks  to  reorganize  the  bank.  The  state  department  will  continue  to 
observe  its  affairs  so  that  the  interest  of  each  stockholder  will  be  safely- 
guarded. 

The  St.  Louis  World  of  the  same  date  ran  an  article  under  the  fol- 
lowing headlines:  "People's  Bank  Reorganization  Complete:  Sec- 
retary of  State  Swanger  Withdraws  All  Objection  to  the  Continu- 
ance in  Business  of  the  Lewis  Financial  Institution:  Say  All  Re- 
quirements Have  Been  Met:  Assets  Are  Returned  to  the  Bank: 
James  F.  Coyle  and  Theodore  F.  Meyer  Are  the  Newly  Elected 
directors."  The  World  states  that  the  above  result  was  arrived  at 
after  a  final  meeting  in  the  Woman's  Magazine  Building,  during 
which  the  reorganization  was  effected.  This  article  is  further  headed 
by  the  famous  letter  of  June  2  from  the  secretary  of  state  to  the 


THE  DREYFUS  CASE  OF  AMERICA  349 

directors  of  the  bank,  of  which  we  shall  hear  much  hereafter.  Swan- 
ger  then  wrote: 

The  steps  you  have  taken  in  the  reorganization  of  the  directorate  of 
the  People's  United  States  Bank  by  the  election  of  Theodore  F.  Meyer  and 
James  F.  Coyle  as  members  of  the  board,  give  me  assurance  that  the  direc- 
torate of  this  bank  will  be  composed  of  men  who  will  be  a  guarantee  for 
the  safe  conduct  of  its  business  and  who  are  satisfactory  to  this  depart- 
ment. Your  agreement  to  conform  with  all  the  requirements  of  the  de- 
partment justifies  me  in  withdrawing  any  objection  to  the  bank's  operation 
at  this  time  and  I  am  glad  to  say  that  the  bank  is  now  in  operation  for 
the  conduct  of  all  its  business,  and  that  I  have  full  confidence  that  the  sug- 
gestions of  the  department  will  be  fully  complied  with. 

There  was  some  appearance  here  that  the  structure  of  the  bank 
would  be  saved.  But  Swanger  did  not  yet  realize  how  far  the  attack 
had  gone,  nor  the  lengths  to  which  the  opponents  of  the  bank  were 
prepared  to  go.  For  the  moment,  all  seemed  well.  Three  of  the 
members  of  the  old  board  of  directors  were  said  to  have  submitted 
their  resignations.  Two  successors,  Messrs.  Coyle  and  Meyer,  had 
been  elected.  Messrs.  Lewis  and  Cabot  held  over.  The  four  direc- 
tors were  to  elect  a  fifth.  They  had  agreed  upon  Jackson  Johnson, 
president  of  the  Roberts- Johnson  '^t  Rand  Shoe  Company,  who  had 
the  acceptance  of  the  office  under  consideration.  The  same  journal 
contains  the  following  editorial  entitled  "Banks  and  Yellow  Jour- 
nalism": 

Partly  as  a  result  of  the  rivalry  between  two  evening  papers,  St.  Louis 
just  now  is  experiencing  a  miniature  banking  sensation. 

Whatever  may  be  the  merits  or  demerits  of  the  People's  United  States 
Bank  scheme,  Mr.  Lewis'  institution  would  have  received  little  more  than 
passing  mention  had  not  the  report  become  current  that  he  was  negotiat- 
ing for  the  purchase  of  the  St.  Louis  Star  and  intended  to  spend  consider- 
able money  with  a  view  to  placing  it  ahead  of  the  Post-Dispatch  as  a  lead- 
ing evening  paper.  When  this  rumor  reached  the  ears  of  the  gentlemen 
in  control  of  the  Post-Dispatch,  they  forthwith  proceeded  to  do  every- 
thing in  their  power  to  discredit  Mr.  Lewis  and  all  his  enterprises.  That 
they  have  in  part  succeeded  in  their  design  is  obvious. 

The  fact  that  the  Post-Dispatch  has  seen  fit  to  relegate  the  news  of 
the  Spanish  war  to  its  market  page  while  it  fills  its  first  page  and  four  or 
five  other  pages  with  a  highly  colored  account  of  the  Lewis  bank  and  its 
developments,  tells  its  own  story.  It  shows  that,  irrespective  of  the  news 
value  of  the  item,  the  Post-Dispatch  is  determined,  if  possible,  to  create  a 
financial  furore  that  will  wreck  the  People's  United  States  Bank  and  put  E. 
G.  Lewis  in  a  position  where  he  will  hardly  be  able  to  negotiate  for  the 
purchase  of  a  rival  evening  newspaper. 

Further  evidence  of  the  enmity  of  the  Post-Dispatch  is  found  in 
the  manner  in  which  the  news  of  the  adjustment  of  the  bank's  af- 
fairs above  narrated  was  handled  in  their  June  3  issue.  The  first 
column  of  page  one  is  headed  as  follows: 

Sues  Lewis  Company  for  Guessing  Contest  Prize:  M.  Logan  Guthrie  of 
Fulton,  Claims  to  Have  Correctly  Estimated  World's  Fair  Attendance: 
Asks  $30,500  and  Injunction:  Indictments  Against  Officers  Quashed:  Secre- 
tary of  State  Swanger  Says  That  All  Conditions  He  Named  Will  Be  Met: 
Directors  Promise  to  Carry  Out  His  Instructions. 

The  casual  reader  would  be  left  in  doubt  by  the  above  headlines 
as  to  whether  the  officers  of  the  bank  had  been  indicted  or  whether 


360  THE  SIEGE  OF  UNIVERSITY  CITY 

tlie  approval  of  the  secretary  of  state  was  predicated  of  the  guess- 
ing contest.  The  circumstances  of  this  suit  and  these  indictments 
have  been  already  narrated  in  connection  with  the  World's  Fair  Con- 
test Company.  The  Guthrie  suit  (a  controversy  over  one  of  the 
prizes),  chanced  to  occur  at  this  moment.  It  was  thus  given  a  leading 
position  in  the  Post-Dispatch  wholly  disproportionate  to  its  news 
value.  The  indictments  voted  by  the  St.  Louis  grand  jury  in  the 
previous  December  on  a  charge  of  setting  up  and  maintaining  a  lot- 
tery, were  then  "played  up"  for  nearly  half  a  column.  Next  in 
order  came  a  sharp  jab  at  the  bank  headed,  "Johnson  Says  He 
Probably  Will  Not  Serve  As  Director."     The  story  opens  thus: 

Jackson  Johnson  of  the  Roberts,  Johnson  &  Rand  Shoe  Company,  last 
night  elected  a  director  of  the  Lewis  Bank,  today  said  to  a  Post-Dispatch 
reporter:  "I  have  reached  a  decision  that  I  will  probably  not  become  a 
director  of  the  bank."  He  said  further:  "I  do  not  understand  what  au- 
thority any  one  had  for  mixing  my  name  up  with  the  People's  United  States 
Bank.  I  am  not  a  stockholder  in  it,  never  was  a  stockholder  in  it  and  had 
no  interest  in  it  whatever.  I  positively  will  not  have  anything  to  do  with 
the  concern." 

Then  came  the  real  news  of  the  day,  namely,  the  reorganization 
of  the  bank.  Last  of  all  was  tucked  away  the  letter  of  the  secretary 
of  state  expressing  his  approval,  together  with  an  interview  with  Mr. 
Swanger  at  Jefferson  City,  containing,  hidden  at  its  very  end,  the 
following  significant  statement: 

The  bank's  statement  shows  certified  checks  for  more  than  a  million  dol- 
lars, greatly  exceeding  the  deposits  and  proving  that  it  is  completely  solvent. 

The  Post-Dispatch,  in  other  words,  deliberately  gave  priority  to 
the  suit  of  the  World's  Fair  Contest  Company.  The  indictments 
which  had  been  dismissed  many  months  previously  as  not  being  based 
on  any  law,  were  dragged  in  by  the  ears.  The  news  of  the  adjust- 
ment of  the  bank's  affairs  to  the  satisfaction  of  the  state  authori- 
ties was  wholly  subordinated.  A  reporter  was  then  dispatched  hot 
foot  to  Jefferson  City  to  demand  of  Secretary  Swanger  an  explana- 
tion for  his  leniency. 

FORCING    SWANGEr's    HAND. 

Meantime  Lewis  himself  had  not  been  idle.  To  offset  in  some 
slight  degree  the  damaging  effect  of  the  inflammatory  hot  shot  of 
publicity  which  the  bank  had  sustained,  he  reprinted  the  June  2  let- 
ter of  the  secretary  of  state,  giving  the  bank  a  clean  bill  of  health, 
in  the  course  of  an  advertisement  in  the  St.  Louis  daily  papers.  The 
effect  of  tliis  upon  the  Post-Dispatch  was  similar  to  that  of  waving  a 
red  rag  before  a  bull.  The  odds  and  ends  of  Betts'  copy  of  the  in- 
spectors' report,  left  over  from  previous  issues  were  hurriedly  gath- 
ered together  and  "played  up"  as  injurious  news  items.  Reporters 
were  rushed  hither  and  thither  to  interview  persons  formerly  con- 
nected with  Lewis  and  offer  them  a  chance  to  repudiate  him.  The 
secretary  of  state,  the  United  States  Attorney,  and  the  postoffice  in- 
spectors were  all  interviewed,  as  to  the  prospects  of  further  official 
action.     The  guns  of  publicity  were  double  shotted  with  the  ammu- 


>. 


:Ai  'Oi  'fl'  'S 


tm  m  m  M  m 

i 

-      r* H 

^First  Press  Room,  erected  in  190^,  shovjn  in  relation  to  the  Woman's  Maga~ine 
Building 

-Same  building  remodeled  in  the  year  igog.  The  upper  story  was  added  while  th? 
presses  upon  the  lower  floor  were  engaged  in  printing  the  Woman's  Magazine 


-  >J 
1'  t^ 


THE  DREYFUS  CASE  OF  AMERICA  S53 

nition  thus  amassed  and  broadside  after  broadside  was  poured 
through  the  columns  of  the  Post-Dispatch  upon  the  devoted  institu- 
tion. A  complete  account  of  this  campaign  of  vilification  would 
greatly  exceed  the  limits  of  this  chapter.  The  folloAving  extracts  will 
give  some  faint  notion  of  its  scope  and  virulence.  A  front  page 
column  article  in  the  Tuesday  evening,  June  6,  edition  is  headed 
"Swanger  Letter  is  Used  by  Lewis  as  Advertisement."  After  calling 
attention  to  Lewis'  statement,  it  proceeds: 

A  telegram  from  Jefferson  Citr  to  the  Post-Dispatch  Tuesday  stated 
that  Secretary  Swanger  had  completed  another  letter  to  Lewis,  but  did 
not  make  public  its  contents.  It  was  also  said  that  Secretary  Swanger 
and  Bank-Examiner  Cook  would  leave  Jefferson  City  Tuesday  afternoon 
for  St.  Louis  to  present  this  letter  in  person. 

It  is  understood  to  make  the  same  demands  as  were  made  in  the  now 
famous  letter  of  the  secretary  of  state  of  May  19,  which  was  not  under 
seal,  and  which  Lewis  contended  was  therefore  not  oflScial.  The  letter 
which  Secretary  Swanger  brings  to  St.  Louis  Tuesday  night,  is  under  the 
official  seal  of  the  secretary  of  state.  It  is  understood  to  be  couched  in 
such  terms  that  there  can  be  no  further  misunderstanding.  The  investi- 
gation instituted  by  postolBce  inspectors  in  St.  Louis  will  be  resumed  June 
16,  the  date  set  for  the  hearing  at  Washington  on  the  recommendation  of 
St.  Ivouis  inspectors  that  a  fraud  order  be  issued  to  stop  the  PeopIe*s 
United  States  Bank  from  using  the  mails. 

The  front  page  of  the  Post-Dispatch  of  Wednesday  evening,  June 
7,  carried  a  news  item,  the  purport  of  which  is  conveyed  in  the  fol- 
lowing headings:  "Dyer  Has  Rejjort  of  Investigation  of  Lewis 
Bank:  Postal  Inspectors  Furnish  P'ederal  District  Attorney  Their 
Findings  in  Two  and  a  Half  Million  Dollar  Mail  Order  Institution, 
as  Published  in  Post-Dispatch:  They  Suggest  Laying  It  Before  Fed- 
eral Grand  Jury:  Pending  Review  of  the  Papers,  Col.  Dyer  Has  Not 
Decided  What  Course  to  Pursue." 

The  day  following,  the  other  St.  Louis  newspapers  still  remain- 
ing silent,  the  Post-Dispatch  published  the  cartoon  shown  elsewhere, 
showing  the  face  of  the  secretary  of  state  surrounded  by  a  question 
mark  containing  the  lettering  "What  Is  He  Going  To  Do  About 
the  Lewis  Bank.''"  Upon  either  side,  under  the  caption  "Swanger's 
Demands  Now  Twenty  Days  Old,"  occurs  the  following  summary  of 
what  it  was  alleged  Lewis  had  to  do : 

Make  good  advertised  promises.  Allot  stock  in  order  of  receipt  of  sub- 
scriptions regardless  of  whether  proxies  are  given  Lewis.  Select  board  of 
directors  approved  by  secretary  of  state.  Take  up  loans  of  bank  with 
officers  and  directors  and  concerns  they  are  In.  Dispose  of  stock  bought 
with  bank  funds  and  keep  bank  officers'  stock  dealings  separate  from  bank's 
business.  Stop  overdrafts  by  Lewis  Development  and  Investment  Company 
on  cash  account.  Furnish  the  State  names  and  addresses  of  all  stockhold- 
ers and  amount  of  stock  held  by  each. 

Three-fourths  of  a  column  was  devoted  to  a  news  item  entitled 
"Most  of  Loans  of  Lewis'  Bank  Were  to  Lewis."  Swanger  is  quoted 
to  the  effect,  in  substance,  that  at  a  conference  with  the  directors 
the  preceding  evening  an  agreement  had  been  reached  to  appoint 
additional  members  of  the  board,  and  that  he  Avould  remain  in  town 
until  the  directorate  was  completed  to  his  satisfaction.     The  follow- 


354  THE  SIEGE  OF  UNIVERSITY  CITY 

ing  statement,  attributed  to  the  secretary  of  state,  must  have  been 
peculiarly  gratifying  to  the  management  of  the  Post-Dispatch.  This 
loan  was  a  portion  of  the  purchase  price  of  the  St.  Louis  Star: 

Frank  J.  Carlisle  made  arrangements  early  last  week  to  borrow  over 
sixty  thousand  dollars  from  tlie  bank.  This  fact  we  learned  after  he  had 
received  about  twenty  thousand  dollars  of  the  money.  There  was  still  re- 
maining over  forty  thousand  dollars  of  this  loan  in  the  bank.  We  stopped 
this  money  going  out  and  insisted  on  the  return  of  the  twenty  thousand. 
All  the  money  was  returned.  No,  I  can't  say  anything  about  the  security 
for  this  loan. 

An  interview  with  the  secretary  of  state  published  on  Friday  even- 
ing, June  9,  under  the  heading  "Men  Asked  Won't  Serve  as  Lewis 
Bank  Directors"  clearly  shows  his  attitude  of  indecision.  The  fol- 
lowing statement  is  attributed  to  Swanger: 

Diflaculty  is  being  experienced  by  the  present  directors  in  inducing  the 
bankers  or  business  men  wanted,  to  serve  on  the  board.  *  *  *  It  seems 
to  be  the  opinion  of  some  persons  that  I  am  proceeding  too  slowly  in  this 
matter,  but  it  should  be  remembered  that  this  is  a  serious  question.  It 
can  not  be  considered  in  a  day.  I  do  not  want  it  to  be  said,  even  if  I 
should  finally  be  compelled  to  take  vigorous  action,  that  I  have  taken  snap 
judgment  on  the  bank  or  Mr.  Lewis.  After  this  board  of  directors  is  com- 
plete my  bank-examiner,  Mr.  Cook,  will  make  an  examination  of  every  de- 
tail of  the  bank's  business.  We  will  then  be  in  possession  of  all  facts  and 
will  make  our  positive  demands. 

REORGANIZED    DIRECTORATE. 

A  new  phase  was  placed  upon  the  matter  when  the  Post-Dispatch 
on  Sunday,  June  11,  published  an  interview  with  one  of  the  newly 
elected  directors,  James  F.  Coyle,  to  the  effect  that  the  secretary  of 
state  had  withdrawn  every  vital  objection  to  the  operation  of  the 
bank.  Coyle  stated  specifically  that  within  the  last  day  or  two  Swang- 
er had  become  convinced  that  the  loans  to  the  Lewis  enterprises 
were  protected  by  gilt-edged  securities  and  would  not  be  disturbed. 
A  reporter  was  immediately  dispatched  to  Jefferson  City.  A  col- 
umn interview  with  the  secretary  of  state  was  secured  and  published 
on  June  12,  1905,  purporting  to  repudiate  Coyle's  understanding. 
This  alleged  interview  notes  the  progress  then  made  as  follows: 

Two  new  directors  remain  to  be  chosen,  but  still  that  is  a  matter  which, 
of  course,  concerns  the  stockholders.  The  question  of  approving  the  direc- 
tors rests  with  me.  That  is  to  say,  I  am  exercising  that  privilege  in  the 
present  case.  *  *  *  Since  the  election  of  Messrs.  Coyle  and  Meyer, 
changes  are  being  made  to  comply  with  our  requirements.  Stock  certifi- 
cates are  being  issued  to  those  who  subscribed  for  stock.  A  record  of  them 
is  being  kept  on  the  bank  books.  The  capital  stock  of  the  bank  has  now 
been  paid  in  full. 

Despite  the  utmost  exertions  of  the  Post-Dispatch  the  campaign 
now  seemed  about  to  go  decisively  against  them. 

The  Tuesday  evening  issue  of  June  13,  made  the  first  announce- 
ment of  the  final  reorganization  of  the  board  of  directors  of  the  bank 
with  the  approval  of  the  secretary  of  state.  The  headlines  were, 
'■'Lon  V.  Stephens,  Director  of  Lewis  Bank:  Former  Governor  and 
Attorney  W.  F.  Carter  Named  and  Approved  to  Complete  Board  by 


THE  DREYFUS  CASE  OF  AMERICA  355 

Secretary  of  State  Swanger:  Stephens  Interested  in  Other  Lewis 
Concerns:  Announcement  that  Investigation  Directed  by  Bank-Ex- 
aminer Cook  Will  Begin  At  Once :  Postal  Hearing  This  Week."  At 
the  head  of  this  article,  under  the  caption,  "How  Lewis  Used  Steph- 
ens' Letter  as  Bank  Advertisement,"  the  letter  of  Governor  Steph- 
ens published  in  "Banking  by  Mail"  was  reprinted.  The  article 
proceeds,  in  an  evident  attempt  to  discredit  the  new  appointees  as 
follows : 

Former  Governor  Stephens  was  one  of  the  judges  in  Lewis'  World's  Fair 
Guessing  Contest.  This  resulted  in  indictments  against  the  operators,  al- 
though the  indictments  were  later  quashed  on  a  technicality.  Stephens 
has  also  been  interested  in  Lewis'  publishing  enterprises.  He  is  third  vice- 
president  of  the  Missouri-Lincoln  Trust  Company.  W.  F.  Carter  is  a  di- 
rector in  the  same  concern. 

A  conference  was  held  Monday  night  between  President  E.  G.  Lewis, 
Coyle,  Meyer,  Cabot,  Carter,  Judge  Shepard  Barclay  and  former  Governor 
Stephens  at  the  Woman's  Magazine  Building  and  this  continued  several 
hours.  Lewis  and  Coyle  remained  with  the  secretary  of  state  after  the 
others  had  departed,  for  the  purpose  of  preparing  an  answer  to  a  letter 
from  Postoffice  Inspector  Fulton,  who  asked  a  number  of  questions  regard- 
ing the  banlt's  condition. 

We  here  catch  a  further  glimpse  of  Fulton  still  tenaciously  pursu- 
ing the  policy  of  "concerted  action."  The  utmost  pressure  of  the 
State  authorities  having  been  withstood  by  the  bank,  the  power  of 
the  Federal  Government  was  now  about  to  be  deiinitely  invoked. 

The  St.  l/ouis  Daily  News  commenting  editorially  on  the  appoint- 
ment of  Governor  Stephens  reflected  unprejudiced  public  opinion 
in  St.  Louis,  as  follows: 

Lon  V.  Stephens,  formerly  governor  of  Missouri,  is  one  of  those  men 
who  are  not  influenced  for  or  against  a  man  or  a  movement  because  of 
praise  or  of  condemnation.  When  the  business  world  looked  very  dark 
for  E.  G.  Lewis,  Governor  Stephens  came  forward  to  aid  him  in  meeting  his 
burdens.  *  *  *  With  the  name  of  Lon  V.  Stephens  on  his  directorate, 
Lewis  can  do  what  he  has  advertised  to  do.  It  is  well  that  all  men  are 
not  afraid  of  rumor. 

A  superficial  impression  of  the  posture  of  affairs  at  this  juncture 
may  be  had  from  the  following  editorial  in  the  issue  of  June  13  of 
Wetmore's  Weekly,  a  local  publication  in  St.  Louis  of  no  particular 
influence,  but  edited  by  a  former  newspaper  man  and  fed  from  the 
gossip  of  the  streets : 

On  the  morning  of  May  31  this  was  the  situation:  The  Post-Dispatch, 
acting  for  itself  and  other  interests,  had  secured  copies  of  the  reports  made 
by  the  postoffice  inspectors  and  the  State  bank-examiner.  They  had  caused 
these  to  be  put  in  type,  ready  to  be  used  at  the  opportune  moment.  The 
secretary  of  state  for  Missouri  had  been  summoned  on  the  scene  and  was 
supposed  to  be  ready  to  use  the  mailed  hand  and  close  up  the  affairs  of 
the  bank  that  had  become  so  obnoxious  to  "vested  interests."  Frank  J. 
Carlisle  stood  ready  to  march  over  to  the  Star  office  and  take  with  him  the 
best  talent  on  the  Chronicle.  Nathan  Frank,  who  controlled  the  majority 
of  stock  in  the  Star,  stood  ready  to  "deliver  the  goods." 

As  the  morning  hours  lengthened  the  Post-Dispatch  forces  learned  that 
the  dreaded  Lewis  would  be  in  the  daily  publishing  business  before  night- 
fall, unless  they  headed  him  off.    A  hurried  council  was  called.    It  was  de- 


366  THE  SIEGE  OF  UNIVERSITY  CITY 

cided  to  at  once  "spring  the  story,"  and  demand  that  Secretary  of  State 
Swanger  act  forthwith,  to  wind  up  the  affairs  of  the  People's  Bank.  Right 
here  is  a  little  chapter  that  is  shady  and  which  will  probably  be  cleared  up 
in  the  courts.  It  is  said  that  Lewis,  as  president  of  the  bank,  and  au- 
thorized thereto  by  the  board  of  directors,  had  given  Mr.  Carlisle  a  check 
for  part  of  the  loan  on  Star  stock  which  had  been  put  up  as  collateral. 
This  check  was  either  paid  over  to  Nathan  Frank  or  was  about  to  be  paid. 
During  the  momentous  morning,  some  person  unfriendly  to  Lewis  carried 
word  to  the  bank  on  which  the  check  was  drawn,  to  the  effect  that  the 
secretary  of  state  had  taken  possession  of  the  People's  Bank  and  that  it 
would  be  unwise  and  probably  illegal  to  honor  the  paper.  The  bankers 
who  were  so  informed  acted  on  the  advice.  The  check  was  dishonored.  The 
deal  for  the  Star  "fell  through."  Why  that  "paper"  was  dishonored  is 
going  to  be  another  story. 

At  3  o'clock  that  afternoon  the  Post-Dispatch  printed  a  broadside 
"roast"  of  the  People's  Mail  Order  Bank  and  President  E.  G.  Lewis.  It 
published  verbatim  copies  of  reports  made  by  Federal  inspectors  to  the 
Washington  office,  which  reports  are  supposed  to  be  secret  until  brought 
to  public  notice  in  a  public  trial.  It  also  published  a  letter  signed  bj 
Secretary  of  State  Swanger,  in  which  several  ultimatums  were  served  on 
the  banker-publisher.  Later  editions  told  that  the  secretary  of  state  was 
in  charge  of  the  property  and  the  general  impression  was  given  that  the 
People's  Bank  had  been  placed  in  the  hands  of  a  receiver  and  that  the 
brilliant  career  of  E.  G.  Lewis  had  been  brought  to  an  end.  "We  did  this 
in  the  nick  of  time,"  they  shouted.  "Another  day  and  Lewis  would  have 
been  in  the  daily  newspaper  business.  Then  he  could  have  charged  us  with 
jealousy.  He  could  have  replied  'a  la  Lawson'  with  page  advertisements 
and  many  people  would  have  believed  them.  But  now  he  is  dead.  He  is  a 
'has  been.'  There  is  no  longer  fear  of  a  powerful  rival  in  the  newspaper 
field." 

The  men  now  associated  with  Lewis  on  the  directorate  of  the 
People's  Bank  were  all  well-known  business  men  and  bankers  of  St. 
Louis.  They  could  out-vote  Lewis  four  to  one.  Hence  there  could 
be  no  question  but  that  they  were  in  full  control.  Any  further  attack 
upon  the  bank  meant  an  attack  upon  these  individuals.  Popular  in- 
terest now  centred  in  them  and  they  became  the  target  of  tlie  news- 
paper interviewers.  The  statements  given  to  the  press  by  ex-Gov- 
ernor Stephens  and  Attorney  W.  F,  Carter  will  serve  to  show  the 
motives  with  which  these  men  took  charge  of  the  People's  Bank  and 
to  make  clear  their  policies  and  purposes  at  the  time.  The  Post- 
Dispatch  of  June  15,  under  the  caption  "Stephens  Talks  of  Lewis' 
Bank/'  publislied  this  statement: 

I  have  been  criticized  in  some  quarters  for  accepting  a  directorship  on 
the  board  of  directors  of  the  People's  United  States  Bank,  while  in  many 
more  quarters  I  liave  been  congratulated  and  thanked  for  accepting  this 
position.  I  have  done  so  with  a  desire  simply  to  help  save  the  value  of 
property  which  Mr.  Lewis  has  built  up,  and  be  of  service  to  the  one  hun- 
dred thousand  or  more  persons  wlio  have  subscrilied  for  stock  to  this  bank. 
*  *  *  Mr.  Lewis  has  assured  me  that  he  is  willing  to  be  governed  by  the 
recommendations  of  the  lioard  and  that  he  will  meet  our  wishes  at  every 
point.     We  could  ask  nothing  more  than  this,  nor  could  he  promise  more. 

It  seems  to  me  that  in  bringing  to  St.  Louis,  as  Mr.  Lewis  has  done, 
millions  of  dollars  of  investments  and  in  helping  to  develop  this  great 
Southwestern  territory,  he  is  entitled  to  the  good-will  of  our  people  and  our 
co-operation  in  his  every  honorable  movement  to  promote  our  best  inter- 
ests.    Mr.  Lewis  is  not  a  practical  bunker.     He  has  incurred  expenses  in 


^Temporary  hanking  room  of  the  Pcotles'  United  States  Dank  in  the  banquet  hall 
on   the  tifth  floor  of  the   Woman's  Magazine  Building 

'Express  shipment  of  $400.00  in  gold  coin,  wrapped  in  a  flannel  shirt  and  old  news- 
papers and  tied  with  a  pair  of  suspenders.  Received  for  deposit  by  the  Peoples' 
United  States  Bank 


i  irn";  taken  nil  the  Woman's  National  Daily  Building,  originally  designed  by  Mr. 
Lewis  for  the  Peoples  United  States  Bank,  and  modeled  after  an  Egyttian  temple. 
The  artist  Ralph  Cliesle\  Ott,  zvas  sent  to  Egypt  to  copy  the  ancient  decorations. 
Mr.  Lewis'  "Sanctum"-  is  modeled  closely  after  the  queen's  room  of  the  temple 

^Mr.  Lewis'  editorial  sanctum  in  the  north  pylon     ^ypostylc  hall,  interior  main  floor 


THE  DREYFUS  CASE  OF  AMERICA  359 

promoting  the  bank,  has  shown  more  or  less  extravagance  in  its  conduct,  and 
has  made  loans  which  perhaps  he  should  not  have  made.  But  I  find  no 
evidence  of  dishonesty  on  his  part,  I  believe  he  has  organized  an  institu- 
tion in  our  midst  which  in  course  of  time,  if  conservatively  and  economi- 
cally managed,  will  prove  helpful  to  the  city,  to  our  people,  and  may  prove 
a  good  investment  to  the  stockholders. 

Mr.  Lewis  had  only  about  two  hundred  and  fifty  thousand  dollars  of 
deposits.  He  has  over  one  million  dollars  of  cash  on  hand.  The  deposits 
therefore  could  be  paid  in  full  within  a  few  moments. 

The  Globe-Democrat  of  Thursday  morning,  June  15,  prints  the 
following  interview  attributed  to  Attorney  W.  F.  Carter: 

Regarding  the  loans  to  other  enterprises  with  which  Mr.  Lewis  is  asso- 
ciated, we  found  one  of  $436,000  to  the  University  Heights  Realty  and 
Development  Company,  and  one  of  $390,000  to  the  Lewis  Publishing  Com- 
pany. Both  of  these  loans,  however,  are  secured  by  first  deeds  of  trust 
upon  the  property  of  the  two  companies,  the  value  of  which  is  undoubtedly 
greater  than  the  amount  of  the  loans.  As  to  the  item  of  $146,000  promo- 
tion expenses,  we  found  this  represented  by  Mr.  Lewis'  note  which  also 
bears  the  signature  of  four  other  well-known  and  responsible  parties. 
Furthermore,  the  note  is  secured  by  ample  collateral.  Secretary  of  State 
Swanger  has  told  us  that  certain  items  of  expense  were  |}ermissible.  We 
will  settle  the  whole  matter  as  soon  as  Mr.  Lewis  returns  from  Washington. 
You  may  state  that  Mr.  Lon  V.  Stephens  and  I  have  personally  gone  aver 
the  assets  of  the  bank.    We  find  it  solvent  and  all  its  loans  amply  secured. 

The  St.  Louis  Republic  of  the  same  date  says : 

Former  Governor  Lon  V.  Stephens  and  Attorney  W.  F.  Carter,  recently 
elected  directors  of  the  People's  United  States  Bank,  after  going  over  the 
affairs  of  the  institution  declared,  last  night,  that  the  condition  of  the 
bank  is  satisfactory.  State  Bank-Examiner  R.  M.  Cook  immediately  after 
the  investigation  departed  for  Jefi'erson  City.  He  said  that  nothing  could 
be  done  until  it  was  learned  what  action  the  Federal  authorities  would 
take. 

Both  publications  draw  attention  to  the  fact  that  Mr.  Lewis,  ac- 
companied by  attorneys,  Gen.  George  H.  Shields  and  Judge  Shep- 
ard  Barclay,  left  St.  Louis  at  noon  on  Wednesday,  June  14,  to  at- 
tend the  hearing  at  Washington  upon  the  citation  to  show  cause  why 
a  fi'aud  order  should  not  be  issued.  Postoffice  Inspector-in-Charge 
Robert  Fulton,  accompanied  by  Inspectors  J.  L.  Stice  and  W.  T. 
Sullivan,  were  also  said  to  have  departed  upon  the  same  mission. 
The  centre  of  interest  as  to  the  bank  affairs  was  thus  shifted  to 
Washington,  whither  the  officers  of  the  bank  and  their  counsel  had 
gone  to  fight  the  decisive  battle.  The  battle  ground  was  to  be  the 
office  of  Assistant  Attorney-General  R.  P.  Goodwin.  Here  the  in- 
spectors were  lining  up  with  Inspector-in-Charge  Fulton  at  their 
head.  Here  was  Goodwin  nominally  to  act  as  umpire,  but  with 
what  lack  of  judicial  fitness  will  be  seen  when  it  is  stated  that  his 
own  assistant,  E.  W.  Lawrence,  was  scheduled  to  appear  in  behalf  of 
the  Government  as  the  captain-general  of  the  prosecuting  forces. 

On  the  arrival  of  Lewis  and  his  party  at  Washington  the  corre- 
spondents of  the  St.  Louis  dailies  and  the  Associated  Press,  needless 
to  say,  were  on  the  ground  eager  to  get  the  story  of  the  hearing. 
But  after  Lewis  at  the  head  of  his  little  band  of  friends  and  allies 


360  THE  SIEGE  OF  UNIVERSITY  CITY 

had  filed  into  Goodwin's  room,  the  doors  were  closed.  The  public 
and  representatives  of  the  press  were  excluded.  The  total  inability 
of  the  newspaper  men  to  obtain  information  about  the  hearing  proves 
that  if  Betts  had  not  obtained  the  copy  of  the  inspectors'  report  from 
Sullivan,  the  nature  of  the  charges  against  Lewis,  or  even  the  ex- 
istence of  such  charges,  would  not  have  become  known  until  some 
six  weeks  later  than  they  did.  Great  injury  to  Lewis  and  the  bank 
would  have  been  spared.  It  is  possible  that  without  the  powerful 
influence  of  the  Post-Dispatch  backed  by  Joseph  Pulitzer  and  the 
New  York  World,  to  afford  them  moral  support,  the  authorities  at 
Washington  might  have  hesitated  to  take  a  course  so  drastic.  The 
fraud  order  itself  might  have  been  withheld. 

The  following  events  culled  from  the  news  items  of  that  time  trace 
briefly  the  sequence  of  events  at  Washington.  The  Post-Dispatch  of 
Friday  evening,  .June  16,  under  the  title  "Hearing  Begun  on  Lewis 
Bank  Fraud  Order,"  published  a  short  news  item  as  follows: 

Hearing  on  the  report  of  postoffice  inspectors,  recommending  issuance 
of  fraud  order  against  the  People's  United  States  Bank  of  St.  Louis,  was 
begun  at  10  a.  m.  todaj'^  before  Assistant  Attorney-General  Goodwin  in  his 
private  office.  Besides  President  Lewis  of  the  bank,  H.  L.  Kramer,  vice- 
president,  accompanied  by  Congressman  Landis  of  Indiana,  F.  J.  Cabot, 
secretary,  and  Judge  Shepard  Barclay  and  Gen.  George  H.  Shields,  at- 
torneys, appeared  for  the  bank.  The  hearing  is  in  secret.  Congressman 
Landis  is  the  only  outsider  present. 

Before  the  beginning  of  the  hearing  this  morning  Lewis  refused  to  make 
a  statement  of  his  defense,  saying  "I  think  I  have  had  publicity  enough. 
I  must  refuse  to  discuss  my  defense,  but  at  a  later  date  I  will  make  a 
statement  over  my  own  signature."  Judge  Barclay  said  the  only  defense 
he  would  discuss  was  as  to  the  charge  that  Lewis  had  received  salary  as 
president  of  the  bank.  He  said  Lewis  did  not  draw  a  cent  of  money.  "We 
have  vouchers,"  he  said,  "to  show  that  the  money  claimed  to  have  been 
paid  Lewis  as  salary  was  paid  to  employees."  The  hearing  will  be  com- 
pleted Saturday. 

Next  day,  Saturday,  June  17,  the  Post-Dispatch  published  a  front 
page  column  article  entitled  "Lewis  Fraud  Order  Under  Advise- 
ment."    This  read  in  part  as  follows: 

The  hearing  in  the  case  of  the  People's  United  States  Bank  of  St.  Louis 
was  closed  at  1  o'clock  Saturday  afternoon  by  the  arguments  of  General 
Shields,  attorney  for  the  defense.  Assistant  Attorney-General  Goodwin 
has  taken  the  case  under  advisement.  All  possible  avenues  to  the  escape 
of  information  to  the  hearing  have  been  closed  by  Goodwin's  strict  in- 
structions. 

The  remainder  of  this  story  contains  speculations  so  wide  of  the 
mark  as  to  prove  that  there  was  no  actual  "leak"  of  information.  The 
same  news  item  under  the  caption,  "Letter  from  Swanger"  contained 
the  following  significant  paragraph: 

Acting  Postmaster-General  Hitchcock  admits  that  a  letter  from  Secre- 
tary of  State  Swanger  from  Missouri  was  delivered  to  postoffice  officials 
one  day  this  week  by  a  St.  Louisa n,  but  refuses  to  give  the  name  of  the 
bearer.  Hitchcock  says  the  letter  only  inquired  regarding  the  hearing  now 
in  progress,  and  contained  no  statements  or  recommendations  on  the 
part  of  Swanger.  Hitchcock  refuses,  however,  to  give  the  contents  of 
the  letter. 


THE  DREYFUS  CASE  OF  AMERICA  361 

Judge  Selden  P.  Spencer  (appointed  receiver  of  the  bank  by 
recommendation  of  Swanger  a  few  weeks  later  under  circumstances 
which  will  appear),  acknowledges  having  been  the  bearer  of  a  com- 
munication from  the  State  authorities  of  Missouri  to  the  Federal 
authorities  at  Washington.  This  may  have  been  the  letter  above  re- 
ferred to.  What  verbal  messages  or  representations  were  conveyed 
by  the  St.  Louisan  in  question  are  not  of  record.  We  know  that 
Swanger,  after  repeated  conferences  with  P'ulton,  and  under  the 
urging  of  the  Post-Dispatch,  had  publicly  announced  at  St.  Louis 
that  if  a  fraud  order  was  issued  by  the  postal  authorities  he  would 
throw  the  bank  into  the  hands  of  a  receiver.  If,  therefore,  Spencer, 
a  prominent  Republican  politician,  the  intimate  friend  and  asso- 
ciate of  Swanger,  was  the  accredited  messenger  who  appeared  at 
Washington,  upon  the  eve  of  the  hearing  with  a  letter  of  inquiry 
from  the  State  authorities  of  ]\Iissouri  to  the  Federal  authorities  at 
Washington,  the  theory  "concerted  action"  is  immeasurably  strength- 
ened. 

Wetmore's  Weekly  of  June  27,  1905,  with  the  cheerful  audacity 
of  an  irresponsible  local  publication,  summarizes  the  situation  and 
makes  the  assertion,  "upon  the  authority  of  a  Washington  correspon- 
dent" that  "a  damnable  outrage  has  been  perpetrated  in  this  mat- 
ter and  circumstantial  evidence  includes  Federal  officials  in  the  con- 
spiracy— a  conspiracy  to  wreck  a  bank."    This  article  proceeds : 

Government  Inspectors  were  sent  to  St.  Louis  and  began  work  on  Lewis' 
books.  State  banking  examiners  did  likewise.  The  Post-Dispatch,  elected 
as  a  medium  for  influencing  public  opinion,  cleared  its  decks  for  action. 
Right  here  is  where  the  dirtiest  work  of  all  was  done.  The  report  of  the 
Federal  officials,  supposed  to  be  of  a  confidential  nature  and  meant  only 
for  the  eyes  of  the  Department  chiefs  in  Washington,  was  given  to  the 
Post-Dispatcii  in  full.  That  newspaper  published  to  the  world  this  one- 
sided testimony,  which  alleged  fraud  of  the  rankest  kind,  without  giving 
Mr.  Lewis  a  chance  to  reply.  The  blow  was  a  terrific  one.  A  similar 
attack  on  any  downtown  bank  in  St.  Louis  would  have  caused  a  panic  and 
a  suspension  of  business,  probably  a  failure.  *  *  *  Those  who  had 
Mr.  Lewis'  undoing  at  heart  were  certain  that  the  onslaught  would  over- 
whelm him.  They  had  even  agreed  on  a  receiver  to  take  charge  of  his 
University  Heights  property,  another  to  take  charge  of  the  Woman's  Maga- 
zine, and  had  even  planned  what  to  do  with  the  magnificent  Woman's 
Magazine  Building.  There  is  a  man  walking  the  streets  of  St.  Louis  today 
who,  a  month  ago,  pictured  himself  sitting  in  Lewis'  chair  and  transacting 
the  business  of  the  several  corporations  at  Lewis'  handsome  desk. 

After  commenting  upon  the  fact  that  the  inspectors'  reports,  which 
had  been  given  in  full  to  the  Post-Dispatch,  were  not  disclosed  dur- 
ing the  hearing  at  Washington,  the  editorial  continues: 

Why  does  not  some  daily  newspaper  take  up  the  case  and  paint  it  in 
all  of  its  black  colors?  You  can  imagine  the  pages  of  "red  hot  stuff"  which 
would  be  published  were  a  similar  attack  made  on  the  National  Bank  of 
Commerce,  or  any  downtown  institution.  I'll  tell  you  why  the  daily  papers 
are  silent  (except  when  they  can  aid  in  the  opposite  direction)  ;  they  still 
fear  that  Lewis  will  start  a  real  live  newspaper  in  this  city  and  punch  holes 
in  their  bank  accounts. 


362  THE  SIEGE  OF  UNIVERSITY  CITY 

The  storm  of  publicity  which  had  beaten  fiercely  upon  the  devoted 
bank  during  the  first  three  weeks  of  June,  now  seemed  to  have 
passed  away.  The  skies  were  clear  once  more,  except  for  the  cloud 
of  uncertainty  still  lowering  upon  the  horizon  over  toward  Washing- 
ton. Certain  mutterings  as  of  distant  thunder  there  were,  in  the 
form  of  rumors  of  activity  upon  the  part  of  the  State  and  Federal 
authorities  and  of  certain  influential  politicians  and  spoilsmen,  which 
gave  presage  of  yet  another  storm.  The  friends  of  the  bank,  how- 
ever, were  of  opinion  that  tlie  tempest  was  over.  At  the  worst  they 
felt  that  the  reorganized  directorate  would  afford  an  adequate  shel- 
ter. Thc}'^  believed  that  any  further  bad  weather  the  bank  might 
experience,  would  soon  blow  over.  The  charges  upon  which  the 
citation  was  issued  were  thought  to  have  been  adequately  defended. 
Upon  the  Avhole  there  seemed  to  be  no  present  occasion  for  anxiety 
as  to  the  bank's  affairs. 

THE  attorney-general's  OPINION. 

The  first  lightning  flashes  from  the  clouds  at  Washington  took 
the  form  of  press  dispatches  on  the  evening  of  July  8  to  the  effect 
that  the  attorney-general's  office  had  filed  with  the  postmaster- 
general  a  report  that  a  fraud  order  against  the  People's  United 
States  Bank  and  E.  G.  Lewis,  if  issued,  would  have  the  sanction  of 
legality.  The  St.  Louis  Chronicle  of  tliat  date  carried  a  brief  news 
item  dated  by  Scrijaps-McRae  Press  Association,  Washington,  July 
8,  to  that  e fleet.  This  was  forked  lightning,  with  a  vengeance.  But 
it  was  not  yet  ready  to  strike. 

The  Globe-Democrat  next  morning  in  a  column  article  headed 
"Cortelyou  Gets  Legal  Opinion  in  tlie  E.  G.  Lewis  Case"  clearly 
foreshadowed  the  event.  Tlie  lightning  was  coming  nearer.  The 
article  ran: 

Signs  indicate  toniglit  that  a  fraud  order  will  be  issued  by  the  post- 
master-general denying  the  use  of  the  mails  to  the  People's  United  States 
Bank  of  St.  Louis,  of  which  E.  G.  Lewis  is  president.  The  only  man 
who  can  say  positively  whether  or  not  it  is  to  be  put  under  the  ban  is 
Postmaster-General  Cortelyou.  Mr.  Cortelyou,  at  midnight,  after  waiting 
for  hours  for  reply  from  St.  Louis  to  a  telegram  sent  during  the  after- 
noon, said  he  could  as  yet  say  nothing.  He  ]>romiscd  a  full  statement  of 
the  case  by  Monday,  if  not  tomorrow.  But  what  that  will  be  no  one  but 
himself  knows  toniglit.  Possibly,  he  does  not  know  himself,  unless  he  has 
heard  from  St.  Louis.  The  fact  that  the  opinion  of  the  attorney-general's 
office  had  been  adverse  to  the  bank  was  confirmed  by  Mr.  Hoyt,  acting 
attorney-general  in  the  absence  of  Mr.  Moody.  He  would,  however,  make 
no  further   comments. 

Assistant  Postmaster  Henry  Wyman  and  Postoffiee  Inspector  Fulton 
met  Secretary  of  State  Swangcr  at  the  Southern  Hotel  last  night.  Mr. 
Fwlton  and  Mr.  Swanger  were  closeted  for  some  time.  I\Ir.  Wyman  de- 
clared he  had  received  no  information  from  the  Postoffice  Department  at 
Washington  with  regard  to  the  Lewis  bank.  It  is  said  tliat  in  case  a  fraud 
order  is  issued  refusing  delivery  through  the  mails  of  letters  to  the  People's 
Bank,  Lewis  will  at  once  apjily  to  the  Federal  court  for  an  injunction. 

The  Post-Dispatch  of  tlie  same  date  publislies  a  front  page  news 
item  of  similar  purport  containing  these  significant  comments: 

R.   P.   Goodwin,    assistant    attorney-general    for   the    Postoffice    Depart- 


THE  DREYFUS  CASE  OF  AMERICA  3G3 

ment,  decided  that  there  was  basis  for  issuing  the  order,  but  upon  advice 
from  superiors,  submitted  the  case  to  Assistant  Attorney-General  Hoyt  of 
the  Department  of  Justice,  who  said  that  it  was  within  the  legal  rights  of 
the  Postoffice  Department  to  cause  the  order  to  be  issued.  Hoyt  did  not 
go  into  the  merits  of  the  case,  simply  giving  an  abstract  opinion.  This  was 
all  he  was  asked  for.  Postmaster-General  Cortelyou  has  communicated 
witii  the  postmaster  at  St.  I-ouis  and  R.  M.  Fulton,  postoffice  inspector-in- 
charge.    He  is  now  waiting  their  reply  before  he  gives  out  his  statement. 

Under  the  caption,  "Lewis  Had  No  News  From  Washington," 
occurred  the  following: 

E.  G.  Lewis,  president  of  the  People's  United  States  Bank,  when  seen 
at  the  Woman's  Magazine  Building  yesterdaj^  declared  he  knew  nothing 
whatever  of  any  action  against  the  bank  by  the  postal  authorities  at  Wash- 
ington. "Secretary  of  State  Swanger  was  not  at  the  building  at  any  time 
during  the  day,"  Lewis  said.  "Bank-Examiner  R.  M.  Cook  was  here; 
but  his  visit  seemed  to  be  merely  a  friendly  call.  In  an  incidental  way  he 
asked  me  whether  I  had  heard  anything  from  Washington.    I  answered  no." 

"Did  he  say  anything  during  his  visit  about  taking  charge  of  the  bank?" 
was  asked.  "Not  on  your  life,"  answered  Lewis.  "When  did  you  heal 
from  Washington  last  in  any  regard?"  was  asked.  "I  have  not  heard  a 
word  since  I  left  there,  about  the  middle  of  June,  after  answering  the  cita- 
tion to  show  cause  why  a  fraud  order  should  not  be  issued." 

Under  the  caption,  "Swanger  Awaits  Official  Notice,"  the  follow- 
ing statement  was  made: 

The  secretary  of  state,  asked  concerning  the  matter,  replied  that  he  had 
received  no  official  information  from  Washington  and  had  not  been  ad- 
vised of  the  action  by  anybody  in  Jefferson  City.  He  said  that  he  was  with- 
out a  hint  of  the  alleged  action  when  he  left  Jefferson  City  the  previous 
night.  "In  case  I  find  that  the  information  is  authoritative,"  he  said, 
"there  is  but  one  thing  for  me  to  do.  I  will  take  charge  of  the  bank  and 
close  it.  Since  this  is  a  mail  bank,  its  being  denied  the  use  of  the  mails 
would  compel  it  to  stop  business.  I  can  not  say  just  what  action  I  shall 
take  other  than  to  say  I  shall  assume  charge  of  the  bank." 

Such,  then,  was  the  strained  position  of  affairs  on  the  evening  of 
Saturday,  July  8,  1905,  pending  the  memorable  Sunday  which  the 
evidence  discloses  to  have  been  a  day  of  plot  and  counterplot.  On 
Monday  morning,  July  10,  the  long  threatened  "concerted  action" 
was  finally  had.  The  fraud  order  which  had  actually  been  signed 
the  preceding  Thursday,  then  arrived  in  St.  Louis  by  mail  and  be- 
came effective.  The  Federal  authorities  impounded  the  bank's  in- 
coming mail.  The  State  authorities  at  the  same  moment  seized  the 
bank  itself  and  threw  it  into  the  hands  of  a  receiver. 

We  must  now  suspend  for  the  moment  the  further  reconstruction 
of  those  exciting  days,  as  depicted  in  the  columns  of  the  local  press. 
We  must  postpone  the  portrayal  of  the  cyclone  of  publicity  which 
struck  the  bank  upon  the  notice  of  the  fraud  order,  as  given  to  the 
press  through  the  medium  of  the  postmaster-general's  celebrated 
memorandum  of  July  9.  For  at  this  point  it  becomes  necessary  to 
retrace  our  steps  and  develop  the  true  story  of  the  fraud  order 
itself  from  documentary  sources  not  at  that  time  available  to  the 
public.  The  next  chapters  will  therefore  undertake  to  set  forth  the 
circumstances  under  which  the  famous  fraud  order  was  actually 
considered,  passed  upon,  and  enacted. 


CHAPTER  XVI. 

IS  ROOSEVELT  RESPONSIBLE? 

Nichols,    the    Informer — Nichols^    Letter    to    Loeb — Reedy'b 
First    Article — "The    President    Directs    Me"- — Enter 
Postmaster-General  Wynne — The  Investigation  is  Or- 
dered— Second   Article    in    The    Mirror — The    Eve    of 
THE  Inquiry. 
Did  a  letter  by  Howard  Nichols  cause  President  Roosevelt  to  or- 
der  an   investigation   of  the   People's   United   States   Bank?      The 
supposition  would  seem  to  be  unthinkable.     Yet  the  inspectors  at- 
tempt to  draw  about  them  the  mantle  of  presidential  authority.  They 
seek  to  shift  upon  Roosevelt's  broad  shoulders  the  onus  of  the  ruin 
which    followed   from   their   own   acts.      Their   contention   rests   on 
slender  foundation,  if,  indeed,  it  is  not  wholly  disingenuous. 

Roosevelt  never  shirked  the  consequences  of  an  investigation  which 
he  desired.  He  fathered  Bristow's  examination  of  the  postoffice  after 
face-to-face  conference  with  William  Allen  White  and  other  reputa- 
ble men.  Can  he  be  compelled  to  adopt,  at  this  late  da}'^,  the  illegiti- 
mate offspring  of  Ploward  Nichols,  the  informer?  Hardly,  while 
Roosevelt  is  his  usual  aggressive  and  vigorous  self !  For  nothing  now 
fastens  the  burden  of  this  affair  upon  Roosevelt  personally,  unless  it 
be  the  conventional  phrase,  "the  President  directs  me,"  used  in  a 
letter  of  transmittal  by  his  secretary.  This  inquiry  was  repeatedly 
brought  to  his  attention;  but  there  is  nothing  to  show  that  he  took 
any  special  interest  in  it,  much  less  that  it  was  instigated  by  his 
personal  command.  He  appears,  indeed,  to  have  consistently  main- 
tained the  attitude  that  the  Lewis  case  was  none  of  his  affair,  but 
Cortelyou's. 

NICHOLS,  THE  INFORMER. 

The  records  in  the  office  of  the  postoffice  inspectors  at  St.  Louis 
show  sundry  complaints  against  Lewis'  enterprises.  Such  is  the  case 
with  all  large  mail  order  firms.  But  there  does  not  appear  to  have 
been  among  these,  prior  to  February,  1905,  anything  to  justify  the 
drastic  investigation  which  was  then  undertaken.  The  jackets  or 
dockets  in  which  these  cases  were  made  up,  were  only  in  the  nature 
of  fuses  as  yet  unconnected  with  the  powerful  explosives  that  shat- 
tered the  People's  Bank.  The  cause  of  the  explosion  which  later 
opened  the  first  breach  in  the  defenses  of  University  City,  was  a 
firebrand  thrown  by  the  hand  of  Howard  Nichols.  Let  us  see  whether 
the  nature  of  Nichols'  information  was  such  that  a  President  of  the 
United  States,  particularly  Tlieodore  Roosevelt,  would  be  likely  to 

364 


THE  DREYFUS  CASE  OF  AMERICA  8S5 

dignify  it  by  deliberately  making  it  the  occasion  of  an  exhaustive  de- 
partmental inquiry. 

Nichols,  as  we  have  said,  having  been  associated  with  Lewis  as 
secretary  and  treasurer  of  the  Mail  Order  Publishing  Company,  had 
been  bought  out  by  Lewis  and  dismissed.  He  then  went  into  the  hair 
dye  trade  at  St.  Louis.  Lewis,  at  the  close  of  the  year  1904,  after 
the  World's  Fair,  was  at  the  high  tide  of  his  fortunes.  On  Christ- 
mas Eve  of  that  year,  Nichols,  the  dismissed  treasurer,  was  making 
hair  dye  in  a  cellar.  He  was  in  straightened  circumstances.  He 
himself  has  said: 

I  began  to  lose  my  health.  The  more  I  thought  of  the  way  Lewis  Tiad 
treated  me,  the  more  bitter  I  became.  The  night  before  Christmas,  1904, 
I  went  home  with  twenty-five  cents  in  my  pocket.  I  crept  up  the  stairs, 
hoping  nobody  would  hear  me  coming  in  that  late  at  night.  But  my  wife 
and  mother  were  in  the  hall.  They  had  a  sheet  thrown  over  a  Morris  chair. 
They  had  been  doing  the  washing  for  three  or  four  months,  and  had  paid 
for  this  chair,  sixteen  dollars,  which  they  had  saved  while  they  were  doing 
the  washfng  of  the  clothes — that  is,  the  laundry.  I  hadn't  brought  a  thing 
home  for  Christmas,  because  I  did  not  have  but  twenty-five  cents,  and  I 
didn't  figure  on  spending  any  of  that  even  for  candy  for  the  children. 

I  wrote  the  letter  to  Mr.  Loeb,  secretary  to  the  President,  in  relation 
to  Mr.  Lewis'  enterprises,  on  February  5,  1905,  of  my  own  accord.  I  was 
inspired  by  fear  of  the  consequences  if  Mr.  Lewis  ever  got  into  trouble  on 
account  of  his  De\elopment  and  Investment  Company.  I  had  been  its 
secretary.  I  concluded,  when  the  first  article  in  the  Mirror  came  out, 
that  something  might  be  stirred  up,  and  I  might  be  directly  concerned.  I 
feared  I  would  be  obliged  to  pay  the  penalty  along  with  Mr.  Lewis  if  he 
were  convicted  of  doing  wrong.  That  was  the  article  headed,  "How  About 
the  People's  United  States  Banlt?'* 

Mr.  Reedy's  office  was  across  the  hall  from  mine.  We  usually  left  the 
doors  open  when  it  was  very  warm,  to  allow  the  circulation  of  air.  From  his 
private  office  he  could  see  me  and  I  him.  I  don't  remember  that  Mr.  Reedy 
was  ever  in  my  office  in  his  life,  or  that  I  was  ever  in  his  private  office  but 
once  or  twice.  Mr.  Reedy  knew  that  Lewis  and  I  had  been  partners.  He 
used  to  make  remarks  about  my  former  partner  and  how  he  was  getting 
along.  We  would  meet  in  the  halls.  He  was  generally  the  one  to  open  up 
on  Lewis. 

Mr.  Reedy  met  me  one  morning  in  the  hall — I  am  not  positive  about 
the  time — and  remarked, — voluntarily,  as  I  remember  it,  because  he  gave 
me  some  new  slang  that  I  did  not  understand, — "I  was  out  with  your 
partner  in  his  new  electric  car.  It  is  right  easy."  I  said:  "Is  that  so?" 
"Yes,"  he  replied,  "but  his  whiskey  is  bad.  He  treated  me  to  a  lot  of 
Hannis  whiskey.  That  is  the  toughest  stuff  I  ever  drank.  But  his  place 
is  the  finest  I  ever  saw.  Say,  do  you  think  he  can  stand  the  gaff?"  I  said: 
"Yes."  He  replied:  "I  don't."  I  said:  "Why  don't  you?  What  is  wrong 
about  it?"  He  said:  "I  don't  like  the  looks  of  things  out  there.  It  isn't 
connected  up  right.  It's  going  to  bust,  and  a  whole  lot  of  things  are  going 
to  bust  with  it.  I  am  going  to  look  further."  That  is  the  way  he  would 
acquire  information  from  me.  I  didn't  know  what  "to  stand  the  gaff" 
might  mean. 

When  asked  if  he  gave  Reedy  any  of  the  information  which  ap- 
peared in  the  Mirror,  Nichols  replied:  "I  cannot  swear  to  that." 
Later,  he  volunteered  the  following  statement:  "In  fairness  to  the 
postoffice  people,  I  wish  to  say  that  they,  in  no  way,  shape  or  form. 


366  THE  SIEGE  OF  UNIVERSITY  CITY 

influenced  me  to  write  the  letter  wliich  apparently  started  all  the 
trouble."     Whereupon,  ensued  the  following  colloquy: 

The  Chairman:  Mr.  Nichols,  is  it  not  true  that  it  was  not  so  much  that 
you  wanted  to  ease  your  conscience  as  it  was  envy  and  jealousy  of  Mr. 
Lewis,  who  was  then  prospering,  while  you  were  on  your  "uppers,"  that 
prompted  you  to  write  this  letter? 

Mr.  Nichols:     I  was  mortally  afraid  of  those  steel  bars. 

The  Chair.max:    Answer  my  question. 

Mr.  Nichols:  No,  sir.  I  do  not  believe  I  have  ever  envied  Mr.  Lewis. 
I  do  not  believe  you  will  find  anybody — 

The  Chair3ian:  Why,  you  said  that  on  a  certain  Christmas  Eve,  you 
had  only  twenty-five  cents  in  your  pocket.  You  had  learned  that  Mr.  Lewis 
had  bought  a  new  automobile;  and  that  he  was  rolling  in  luxury  and  wealth, 
and  you  did  not  have  means  to  buy  presents  for  your  children.  Did  you  not 
want  this  committee  to  infer  that  the  feelings  that  overcame  you  then 
prompted  you  to  write  that  letter? 

Mr.  Nichols:  No;  I  said  I  thought  I  was  a  fool  for  not  taking  his  sev- 
enty-five dollars  a  week  that  he  offered  me  to  work  for  him. 

The  Chairman:    And  shortly  after  that  you  wrote  that  letter? 

Mr.  Nichols:    Yes;  I  believe  that  letter  was  written. 

Nichols'  letter  to  loeb. 
Nichols'  shifty  and  evasive  answers  were  evidently  not  responsive 
to  the  chairman's  questions,  and  the  former  closed  his  testimony  at 
this  point,  leaving  upon  record  the  obvious  inference  that  the  follow- 
ing communication  was  penned  with  malice  and  in  a  spirit  of  re- 
venge : 

THE  pacific  trading  CO. — INCORPORATED  UNDER  THE  LAWS  OF   MISSOURI TOILET 

specialties. HOWARD    E.    NICHOLS,    PRESIDENT   AND   TREASURER. 

NICHOLS    BUILDING, 

St.  Louis,  Mo.,  February  4,  1905. 
Mr.  Loeb,  Secretary  to  the  President, 

Washington,  D.  C. 

Dear  Sir:  Inclosed  please  find  a  clipping  from  a  St.  Louis  paper  which 
really  merits  attention,  not  only  from  the  local  authorities,  but  from  the 
national  authorities  as  well. 

Read  it  over  at  your  leisure,  and  you  will  possibly  know  to  what  depart- 
ment it  ought  to  be  referred. 

In  support  of  what  I  say,  will  remark  that  although  this  clipping  seems 
to  be  couched  in  a  rather  uncouth  manner,  yet  in  the  main  it  is  pretty 
nearly  perfect  in  detail. 

There  is  a  deep,  well-laid  plan  here  to  get  a  lot  of  people  to  buy  stock 
in  several  enterprises,  then  in  deposits  in  this  bank(?)  get  their  own  money 
back — maybe. 

The  inside  of  the  thing  is  very  well  known  to  myself,  but  I  am  too  small 
a  fish  in  the  financial  game  to  even  cause  a  ripple,  so  have  had  sense 
cnougli  to  mind  my  own  business  and  keep  still. 

Now,  that  the  case  seems  to  have  excited  comment  on  the  outside  though, 
I  can  add  my  say-so,  no  matter  whether  it  does  any  good  or  not. 

In  order  to  carry  any  point  in  the  exploitation  of  the  several  schemes — • 
the  promoters  do  not  spare  money — large  sums  are  paid  for  seemingly 
trivial  things,  and  when  it  comes  to  advertising,  money  is  laid  out  lavishly. 

Think  of  a  magazine  selling  at  ten  cents  a  year,  advertising  for  subscrip- 
tions, and  spending  an  average  of  fifty  or  sixty  cents  each  to  get  a  ten- 
cent   subscriber. 

While  there  is  a  price  of  six  dollars  a  line  quoted  for  advertising  in  the 
same   sheet,  yet,  the   advertising   agencies   quote   the   same  space   in   some 


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THE  DREYFUS  CASE  OF  AMERICA  369 

cases  as  low  as  four  dollars  and  seventy-five  cents — and  they  make  some 
profit,  too. 

We  have  had  repeated  requests  regarding  the  United  States  People's 
Bank,  Fibre  Stopper  Company,  Development  and  Investment  Company, 
who  oflered  forty  per  cent  dividends  last  year,  and  about  three  or  four 
other  things,  that  are  all  run  by  the  Woman's  Magazine  management. 

They  all  seem  to  have  some  kind  of  stock  that  they  can't  seem  to  real- 
ize on.  The  most  recent  thing  is  that  old  World's  Fair  Contest  Company. 
It  has  really  hurt  the  city  of  St.  Louis,  as  people  write  in  and  say  that  they 
will  buy  from  even  us  if  we  will  send  them  the  goods  and  let  them  pay  for 
them  when  they  get  them,  giving  as  an  excuse  that  they  are  out  on  account 
of  sending  money  to  that  company  which  sold  guesses  and  never  heard  a 
thing  more  from  them. 

The  magazine  runs  all  kinds  of  mail-order  plans  of  their  own  in  the 
paper,  in  the  names  of  their  wives,  and  corporations  that  they  control  and 
pay  the  bills  for. 

This  clipping  speaks  of  Postmaster  Baumhoff,  Mr.  Dice,  the  inspector — ■ 
now  dead — and  Mr.  W'ynne,  in  a  manner  that  connects  them  with  it  by 
inference. 

I  do  know  i^ersonally  that  presents  of  one  kind  or  another  have  passed 
between  Mr.  BaumhoflP — in  the  shape  of  flowers — and  the  magazine,  know 
that  Mr.  Dice's  son  was  hired  at  a  salary  of  seventy-five  dollars  per  month 
to  take  the  place  of  a  little  girl  who  used  to  clip  ads  and  paste  them  on 
cards  so  as  to  send  circulars  to  all  advertisers— the  girl  got  six  dollars 
a  week. 

I  do  know  that  a  real  fancy  inkwell  was  sent  to  Superintendent  Machem 
in  February  of  1903. 

I  do  know  that  a  watch  was  sent  to  Mr.  Harrison  Barrett  in  1899,  and 
do  know  that  as  late  as  1901,  any  report  that  was  sent  from  the  inspectors' 
office  at  St.  Louis  was  read  or  told  verbally  before  it  started  for  Washing- 
ton, in  regard  to  the  magazine. 

I  know  that  a  Mr.  Travers  in  the  third  assistant's  office  wrote  some  sup- 
posed lessons  in  shorthand  for  the  shorthand  column  in  the  magazine,  and 
that  he  was  paid  for  that.  The  same  lessons  are  easily  found  in  any  text- 
book on  shorthand  that  you  pick  up. 

Enormous  quantities  of  papers  are  mailed,  to  be  sure,  yet  it  takes  a 
thousand  thousand  to  make  a  million,  and  then  half  as  many  more  to  make 
a  million  and  a  half;  yet,  they  are  now  claiming  more  than  that  and  say 
that  they  are  all  fresh  and  paid  for.  There  was  a  time  in  1901  when  the 
Postoffice  Department  sent  special  inspectors  to  investigate  the  subscription 
files  of  the  Winner  (now  Woman's)  Magazine,  and  the  trouble  was  to  show 
them  that  the  paper  had  the  number  of  subscriptions  it  claimed. 

This  was  done  by  juggling  them  through  the  offices  and  finally  bringing 
them  before  cases  which  they  had  counted  once,  but  being  in  a  new  posi- 
tion, they  counted  again,  so  "the  subscription  list  made  good;"  but  they  re- 
ported adversely  on  the  thing,  anyway,  so  it  didn't  help  out  much,  and  had 
not  Mr.  Madden  been  stopped  in  his  work  of  cleansing  the  second-class 
privileges  he  would  have  had  the  Winner  clear  out  of  the  mails  in  a  hurry. 

Now  comes  the  "bank  plan."  In  theory  it  is  beautiful,  but  in  practice 
it  don't  look  as  if  it  was  going  to  do  much  more  good  than  to  provide 
money  to  help  the  W^oman's  Magazine  along,  the  same  as  all  of  the  other 
schemes  have  done,  and  that  thing  is  a  losing  proposition  and  always  will  be. 

We  now  have  an  inspector  in  St.  Louis  who  is  strictly  business  and  can 
not  be  fooled.  It  is  to  be  hoped  that  he  will  look  closer  into  the  thing,  for 
he  has  about  the  smoothest  and  most  resourceful  gentleman  in  St.  Louis  to 
deal  with  in  that  proposition. 

I  have  copies  of  some  of  the  inspectors'  reports  at  my  home.  I  have  an 
autograph  letter,  written  by  Mr.  Barrett  about  the  watch,  at  home.  You 
can  find  the  article  written  by  Mr.  Machem,  for  which  the  inkwell  was 


370  THE  SIEGE  OF  UNIVERSITY  CITY 

sent,  in  the  May  or  June  issue  of  the  Winner,  1902.    The  lessons  written 
about  shorthand  are  in  a  later  issue  of  the  paper. 

If  you  think  it  worth  the  trouble,  and  can  make  a  summary  of  these 
things,  I  do  not  think  you  will  be  reprimanded,  for  calling  his,  the  Presi- 
dent's, attention  to  the  matter. 

As  stated  in  the  clipping,  the  names  of  the  supposed  backers  in  the  sev- 
eral enterprises  are  well  and  favorably  known;  in  fact,  the  best  money 
interests  in  the  city  have  been  drawn  in,  and  yet  they  cannot  get  a  good 
look  at  any  of  the  books  when  they  want  to  do  so. 

Mr.  Holden  was  the  inspector — from  Philadelphia — who  counted  the  sub- 
scription list  twice  and  didn't  know  it,  and  as  confession  is  good  for  the 
soul,  will  say  that  the  writer  is  the  one  who  arranged  things  so  that  he 
would  do  so.  But  it  is  a  thing  I  am  ashamed  of;  like  hitting  a  man  in 
the  dark. 

Was  personally  connected  with  the  thing  until  May,  1902,  when  the 
Development  and  Investment  Company  got  so  raw  that  I  was  afraid  that  I 
and  the  rest  of  the  concern  in  the  Winner  would  land  behind  the  bars.  It 
was  a  case  of  rob  Peter  to  pay  Paul,  and  as  I  argued  a  little  too  much  for 
a  clean  slate  I  was  gently  put  out  of  the  concern  and  must  say,  in  a  nice, 
pleasant  manner,  put  out  in  a  perfectly  legal  way,  and  in  a  supposedly 
satisfactory  arrangement.  Later,  I  found  that  I  was  in  the  fix  of  Mr. 
Hayseed  who  had  a  good  brick,  but  had  signed  a  receipt  for  it,  and  couldn't 
find  grounds  to  get  action  on. 

This,  of  course,  may  be  a  big  bore  to  you,  but  I  place  such  information 
as  I  have  at  your  agent's  disposal,  and  if  it  is  not  worth  considering,  shall 
feel  that,  at  least,  if  something  does  go  wrong,  and  a  lot  of  people  are 
minus  their  savings  of  years,  none  of  the  mud  will  splatter  on  me,  and  I 
shall  have  done  my  part  in  trying  to  help  clear  the  matter  up. 

Assuring  you  of  best  wishes,  I  am. 

Yours  truly, 

Howard  E.  Nichols, 
203  North  Tenth  street,  St.  Louis,  Mo. 

Subscribed  and  sworn  to  before  me,  at  St.  Louis,  Mo.,  this  28th  day  of 
March,  1905.  R.  M.  Fultox, 

Postoffice  Inspector-in-Charge. 

reedy's  first  article. 
The  article  clipped  from  the  Mirror  of  February  2,  1905,  was  en- 
titled: "How  About  the  People's  United  States  Bank.-^"  It  bore  the 
signature  of  William  Marion  Reedy.  This  was  the  first  public  attack 
upon  the  bank.  It  was  immediately  called  to  the  attention  of  Secre- 
tary Locb  by  Nichols ;  of  the  postmaster-general  by  W.  C.  Taylor  of 
4111  West  Belle  Place,  St.  Louis,  and  of  Inspector-in-Charge  Ful- 
ton at  St.  Louis.  It  thus  set  in  motion  the  investigation  which  fol- 
lowed. These  facts  seem  to  demand  that  it  be  reprinted  in  its 
entirety : 

HOW  ABOUT  THE   PEOPLe's   UNITED    STATES  BANK? 

By  William  Marion  Reedy. 

From  various  parts  of  the  country  the  Mirror  has  received  inquiries  con- 
cerning a  People's  Mail  Bank,  recently  started  here  under  the  laws  of  the 
State  of  Missouri. 

The  institution  is  projected  by  E.  G.  Lewis,  who  runs  the  Woman's  Maga- 
zine, a  ten-cents-a-year  mail  order  publication  that  claims  two  million 
readers.  It  was  this  Mr.  Lewis  who  ran  the  great  and  widely  advertised 
guessing  contest  on  the  World's  Fair  attendance.  H.  I^.  Kramer,  who 
makes  a  tablet  that  works  while  you  sleep  and  runs  a  big  mud  bath  in 
Indiana,  is  also  in  tlie  scheme.  There  are  some  others,  known  and  un- 
known, dead  and  living. 


THE  DREYFUS  CASE  OF  AMERICA  871 

There  were,  on  December  3,  eighty-five  thousand  individual  subscriptions 
to  the  stock.  The  charter  was  granted  November  14  to  the  People's  United 
States  Bank.  The  name  of  the  enterprise  has  been  changed  several  times 
in  the  course  of  its  literary  development.  A  great  and  characteristic  fea- 
ture of  this  literary  development  is  Mr.  Lewis'  frequent  pledge  of  his  own 
personal  fortune  to  the  bank,  and  at  one  time  he  offered  to  put  up  for 
stock  one  dollar  for  every  doUar  any  subscriber  miglit  send  in.  It  is  but 
fair  to  say  that  the  literature  presents  many  proposed  arrangements 
whereby  the  stockholders  and  depositors  are  to  be  protected,  although  some 
of  them  are  rather  confused  in  phraseology.  There  are  numerous  apparent 
contradictions  in  the  different  statements  of  the  project,  which  Mr.  Lewis 
probably  can  fully  harmonize,  and,  of  course,  there  is  a  presumption  in 
favor  of  the  bank  in  its  receipt  of  a  charter  from  the  State. 

I  have  looked  at  a  great  deal  of  the  concern's  literature.  It  is  volumin- 
ous, involved.  It  is  printed  "con"  talk.  It  reads  very  much  like  a  get- 
rich-quick  scheme.  The  literature  promises  a  bank  greater  than  all  the 
banks  of  Chicago  and  St.  Louis  together,  offers  stock  to  all  and  sundry  of 
the  two  million  ten-cents-a-year  subscribers  to  the  Woman's  Magazine. 
This  is  not  to  be  a  rich  man's  bank.  It  is  going  to  make  money  "in  many 
ways  that  no  other  bank  can."  I  should  like  to  quote  a  lot  of  Mr.  Lewis' 
dope,  but  it  is  gotten  up  in  such  verbose  shape  that  it  is  practically  unin- 
telligible. It  resembles  the  "patter"  of  fortune-tellers  more  than  anything 
else  of  which  I  can  think.  It  is  full  of  philanthropic  palaver.  The* pro- 
moter is  full  of  love  for  the  dear  public.  It  is  also  a  sure  winner.  He 
can't  lose.  He  is  making  more  money  than  he  wants.  Therefore,  he  will 
take  the  people  in — that's  what  he  says. 

This  bank  "should  be  the  most  powerful  and  prosperous  bank  in  the 
world,  and  can  dictate  terms  to  the  great  railroads  and  corporations  who 
must  sell  their  bonds.  Some  very  kind  friends,  men  of  wealth,  who  are 
joining  me  hand  in  hand  in  the  labor  of  creating  our  great  bank,  have  of- 
fered to  help  me  help  you  secure  more  of  the  stock  than  you  could  pay  for 
at  one  time.  They  receive  no  interest  or  profit  for  doing  this,  but  are 
placing  at  my  disposal  a  vast  sum  of  money  in  order  to  help  each  of 
thousands  of  you  at  least  a  little."  Now,  if  the  sentences  just  quoted  are 
not  the  very  essence  of  the  "bull  con"  and  "the  green  goods  game,"  I  must 
have  put  in  ten  or  fifteen  years  as  criminal  reporter  for  no  profit  of  mine 
whatever. 

Here's  more  of  the  patter: 

"If  you  wish  to  increase  your  subscription,  fill  in  the  inclosed  blank,  tell- 
ing me  how  much  more  of  the  stock  you  wish  to  secure  and  just  how  you 
can  pay  for  it  up  to  December  1,  and  I  will  advance  the  money  to  hold  it 
for  you.  You  must  pledge  me  that  you  are  not  speculating  in  the  stock, 
but  that  you  want  this  increase  for  yourself  or  family.  I  cannot  ask  my 
friends  to  advance  this  money  longer  than  December  1,  and  you  must  act 
promptly,  as  the  books  will  be  closed  and  the  charter  granted  in  a  very 
short  time  now,  and  never  in  your  life  again  will  you  have  the  opportunity 
that  is  now  open  to  you.  A  year  from  now  the  possessor  of  five  hundred 
dollars  of  the  stock  of  this  bank  will  be  practically  independent.  It  is  a 
security  that  you  can  borrow  money  on  at  any  time  or  place,  at  the  lowest 
rate  of  interest,  and  it  will  be  a  security  that  will  double  in  value  from  year 
to  year  and  pay  a  constantly  increasing  income.  I  want  you  to  have  as 
much  of  the  stock  as  you  can,  and  when  I  receive  the  blank  back  I  shall 
deduct  the  amount  you  want  from  the  subscription  of  some  of  those  who 
I  feel  are  not  entitled  to  as  much  as  they  have  subscribed  for,  advance  the 
money  to  pay  for  it  for  you,  and  hold  it  for  you  until  you  have  paid  me  for 
it  in  the  installments  that  you  have  promised.  You  must  treat  me  fairly 
and  not  subscribe  for  more  than  you  honestly  know  you  can  pay  for,  because 
if  I  advance  the  money  for  you  and  hold  the  stock,  it  prevents  someone 


372  THE  SIEGE  OF  UNIVERSITY  CITY 

else  from  having  it,  and  makes  me  and  my  friends  advance  money  need- 
lessly to  help  you. 

"Tell  your  friends  who  are  thinking  of  joining  me  in  our  great  bank 
to  send  in  their  subscriptions  at  once  if  they  do  not  wish  to  be  too  late. 
Fill  in  the  blank.  If  possible,  increase  your  subscription  or  that  of  your 
family  to  the  limit  and  I  will  help  you  all  I  can." 

If  that  isn't  the  epistolary  razzle-dazzle  for  the  yap  yearning  to  be  done 
good  and  brown,  I  don't  know  what  is.  What  it  seems  to  say  is  quite  over- 
powering in  its  promise.  What  it  does  say  is  nothing  at  all  that  anyone 
can  lay  hold  of.  Mr.  Lewis  appears  to  be  just  dying  to  make  money  for 
other  people.  All  he  asks  is  that  they  turn  their  money  over  to  him  to  start 
this  bank.  1  understand  that  the  money  is  coming  in  upon  him  by  the 
basketful.  He  has  the  plans  drawn  for  a  bankbuilding  that  shall  resemble 
an  Egyptian  temple.  It  will  be  on  an  elevation.  An  avenue  of  sphinxes 
will  lead  up  to  it.  This  building  will  be  just  across  the  road  from  the 
beautiful  octagonal  officebuilding  of  the  Woman's  Magazine,  out  in  St.  Louis 
county,  an  institution  that  really  made  itself  almost  a  rival  for  the  World's 
Fair  last  summer  in  the  number  of  visitors.  Mr.  Lewis  is  a  pleasant-man- 
nered gentleman,  a  little  nervous,  with  a  mind  that  is  miraculously  nim- 
ble. He  deals  with  millions  as  if  they  were  pennies.  He  is  the  ideal 
promoter,  and  his  spiel  is  the  most  persuasive  that  I  have  ever  heard,  and 
I've  met  the  best  confidence  crooks  in  the  country  in  my  day. 

The  People's  Mail  Bank  is  to  issue  its  own  currency;  that  is,  its  receipts 
are  to  pass  current  all  over  the  country.  Other  banks  will  take  them  as  if 
they  were  National-bank  notes.  The  People's  Mail  Bank  is  going  to  rival 
the  Bank  of  England.  Just  how  it  is  going  to  make  money  upon  its  mil- 
lions of  stock,  IMr.  Lewis  does  not  make  plain  in  his  literature.  He  says 
he  has  some  big  St.  Louis  bankers  with  him,  and  he  talks  of  syndicates  of 
wealthy  men  in  San  Francisco,  and  elsewhere,  taking  large  blocks  of 
stock;  it's  such  a  dead-cinch  good  thing.  Oh!  'tis  a  beautiful  spiel,  but  it  is 
all  characterized  by  the  most  rarified  ethereality. 

I  have  before  me  an  "installment  subscription"  blank  that  is  a  "bird"  for 
phraseology.  The  subscriber  promises  to  pay  a  certain  amount  to  be  used 
by  Mr.  Lewis,  according  to  his  best  judgment,  towards  the  organization  of 
such  a  bank  in  consideration  of  his  best  efforts  in  effecting  such  an  organi- 
zation, and  of  the  other  subscriptions  thereto,  and  Mr.  Lewis  is  to  ad- 
vance the  money  and  set  aside  for  the  subscriber  a  corresponding  number 
of  shares  in  said  bank,  to  the  amount  above  suljscribed  by  the  subscriber, 
and  said  stock  when  issued  to  the  subscriber  is  to  be  fully  paid  and  non- 
assessable, it  being  understood  that  Mr.  Lewis  is  to  advance  the  money 
to  pay  for  the  said  stock  without  charging  the  subscriber  any  interest 
or  commission,  and  the  subscriber  is  to  pay  Mr.  Lewis  as  set  forth  later, 
and  that  Mr.  Lewis  is  authorized  to  organize  and  incorporate  said  bank  on 
such  terms,  with  such  directors  and  under  such  laws  as  may  be  considered 
by  Mr.  Lewis  best  suited  to  the  purposes  intended. 

All  of  which  reads  like  a  "blind  pool"  agreement  more  than  anything 
else.  All  the  literature  of  promotion  for  the  People's  Mail  Bank  is  of 
this  general  character  of  vagueness  of  promise.  The  literature  is  all  well 
printed  and  is  most  alluring  in  its  golden  haziness.  However  skilled  one 
may  be  in  tracing  the  least  flickering  of  an  idea  to  its  lair  in  a  maze  of 
words,  the  People's  Mail  Bank  literature  baffles  him.  It  all  looks  like 
"there's  millions  in  it;"  but,  subject  to  careful  analysis  of  anyone  compe- 
tent to  follow  the  intricacies  of  finance,  the  result  is  something  to  make  the 
judicious  banker  or  business  man  shake  his  head  in  grave  dubiety. 

Mr.  Lewis  stands  well  in  this  city  to  all  appearances.  His  magazine 
maintains  its  own  mail  cars.  Mr.  Lewis  has  a  private  trolley  car  to  take 
visitors  to  his  magazine  building — and,  indeed,  his  printing  and  publish- 
ing plant  is  a  marvel.  He  has  floated  a  real  estate  scheme  known  as  Uni- 
versity Heights  on  a  stock  plan.     He  invented  a  device  to  put  on  the  wall 


Worlds  Fair  guests  of  the  Lezvis  PulUshin'j   Company 

^Officers  oJ_  the  K.  C.  Mcx.  &  Orient  R.  R.  and  English  Capitalists  -Officers  and 
Directors  of  the  Missouri-Lincoln  Trust  Company,  and  wires  ^Directors  of  the 
National   Bank   of    Commerce,    St.    Louis 


Delegations  of  editorial   men,   guests  of   the   Lewis  Publishing   Company 
^Democratic   Editors  of   Missouri    '^Missouri  Republican   Editors     ^Southern    Illinois 
Editors 


THE  DREYFUS  CASE  OF  AMERICA  375 

near  rour  telephone,  which  pre%'ents  anyone  using  the  phone  without  drop- 
ping a  coin  in  the  slot,  and  this  device  is  not  attached  to  the  telephone  at 
alL  He  has  also  a  great  scheme  for  manufacturing  a  patent  cork  out  of  a 
substitute  for  cork. 

Mr.  Lewis  associates  with  bankers  and  financial  moguls.  He  had  Presi- 
dent Francis  of  the  World's  Fair  to  preside  at  the  laying  of  the  corner- 
stone of  his  magazine  building.  He  uses  freely  in  conversation  tlie  names 
of  the  best-known  capitalists  in  this  city  and  is  altogether  very  impres- 
sive, if  not  convincing,  to  one  who  wants  to  pin  talk  down  to  facts.  There 
can  be  no  manner  of  doubt  that  he  is  a  tremendous  hustler  and  that  he 
has  some  powerful  alliances  in  finance.  He  has  had  some  trouble  with  the 
postal  authorities  in  the  past.  When  he  started  his  magazine,  he  did  it  by 
a  device  which  the  authorities  suppressed,  as  being  in  the  nature  of  an 
"endless  chain"  scheme.  His  World's  Fair  guessing  contest  was  investi- 
gated, too,  though  I  believe  the  indictments  of  other  like  promoters  grow- 
ing out  of  tiie  investigation  were  nolle  prosequied.  He  had  a  great  "pull" 
with  former  Postmaster  BaumhoflF.  His  relationship  with  the  late  PostoiBce 
Inspector  Dice  was  close,  and  he  entertained  Postmaster-General  Wynne. 
His  World's  Fair  lottery  was  not  molested.  He  has  had  an  eventful  career 
of  fancy  financiering  in  various  parts  of  the  country,  having  run  co-opera- 
tive watch  schemes,  candy  games,  patent  medicine  plants,  etc.  He  has  been 
in  the  advertising-agency  business,  and  he  started  a  development  and  in- 
vestment company  that  was  a  weird  wonder  for  promise.  He  has  been  a 
wizard  at  the  local  banks,  getting  credit  with  a  success  that  caused  people 
to  suspect  him  of  being  a  hypnotist,  and  kiting  checks  in  a  way  to  make  a 
Japanese  juggler  green  with  envy.  He  borrowed  money  from  two  banks 
and  made  them  both  bid  for  his  deposit  on  the  basis  of  the  credit  they 
would  give  him,  and  finally  took  the  two  banks'  money  and  deposited  it  in 
a  third  bank  that  would  give  him  more  credit.  He  carries  as  much  as  five 
hundred  thousand  in  cash  deposits,  though,  it  is  intimated,  not  in  the  name 
of  any  of  his  companies,  but  in  his  own  name.  His  bank  is  chiefly  officered 
by  his  employees. 

Though  he  is  very  chummy,  it  is  said,  with  big  bankers,  the  name  of 
but  one  of  them  appears  upon  the  stationery  of  his  bank.  He  lives  in  an 
atmosphere  of  stocks  and  bonds,  and  a  collection  of  his  promotion  literature 
is  curious,  as  showing  how  his  schemes  develop  from  rash  proposals  that 
seem  to  invite  official  interference  to  elaborately  confusing  and  mystifying 
documents,  seemingly  drawn  up  by  able  lawyers  aiming  to  do  all  that  is 
illegally  possible  within  legal  forms.  He  is  a  man  who  has  no  vices.  He 
sports  an  automobile  or  two.  He  led  in  a  crusade  against  graft  in  St.  Louis 
county  last  summer  when  he  ran  Camp  Lewis  for  his  magazine  and  bank 
subscribers'  accommodation  on  his  University  Heights  ground  near  the 
World's  Fair.  His  career  of  ups  and  downs,  as  I  have  gathered  it  here 
and  there,  is  one  typical  of  the  plu-perfect  faker  on  a  big  scale.  He  has  the 
imagination  of  a  Mulberry  Sellers  and  he  can  out-talk  any  man  in  the 
United  States  in  the  line  of  fascinating  air-castle  building.  As  I  have  said, 
according  to  his  own  statement,  the  money  has  been  coming  in  by  the 
basketful,  but  the  number  of  moneyed  men  who  have  lost  money  by  him 
in  various  schemes  is  quite  large.  His  coin-controller  for  telephones  and 
his  papier-mache  cork  scheme  have  left  some  wise  guys  with  some  mighty 
dead  stock  on  their  hands.  He  has  done  business  here  with  nearly  every 
big  bank  in  the  city,  and  some  of  the  smaller  sort,  and  the  men  of  money 
know  him  quite  well.  If  they  have  not  "turned  him  up,"  or  down,  it  may 
be  because  they  have  reason  to  know  that  he  is  going  to  win  out,  or  it  may 
be  because  he  got  into  them  so  deep  that  they  say  nothing,  in  the  hope 
that  he  may  pull  them  out,  or  that  they  don't  like  to  advertise  the  fact 
that  they  have  been  "easy"  to  the  point  almost  of  being  Chadwicked. 

This  is  a  synopsis  of  the  great  Lewis  enterprise  in  its  protean  phases. 
It  is  necessarily  superficial,  because  a  detailed  recital  of  the  man's  story 


376  THE  SIEGE  OF  UNIVERSITY  CITY 

would  take  up  the  space  of  four  issues  of  the  Mirror,  and  then  some.  The 
man  is  playing  a  big  game  that  seems  to  be  on  first  blush  a  partially  legiti- 
mized get-ricii-quick  game.  The  whole  game  is  based  upon  the  magazine 
investment,  which  may  or  may  not  be  the  mint  that  it  is  made  to  appear 
in  his  prospectuses.  He  is  ably  advised  in  a  legal  way  in  all  he  does, 
and  so  there  is  great  difficulty  in  determining  offhand  the  matter  of  his 
trustworthiness,  concerning  which  the  Mirror  has  been  asked  so  frequently. 
His  later  promotion  literature  is  warier,  in  better  legal  form,  than  his 
earlier  output. 

The  game  is  so  big  it  should  be  carefully  investigated.  It  should  be 
investigated  by  especially  appointed  postal  and  State  and  National  bank- 
examiners,  because,  as  I  have  heard,  Lewis  was  particularly  close  to  Baum- 
hoff  and  Dice  when  they  ran  the  local  postoffice,  and  he  was  getting  their 
receipts  on  enormous  payments  for  mailing  his  magazine,  and  when  he  was 
running  the  World's  Fair  lottery.  The  inflow  upon  Lewis  of  money  sub- 
scriptions to  his  bank  has  reached  dimensions  that  will  justify  an  inves- 
tigation that  will  investigate  to  the  limit.  The  men  who  are  interested  in 
local  financial  affairs  are  beginning  to  worry  about  Lewis  and  the  drag  he 
has  on  the  purses  of  people  in  every  state  in  the  LInion.  His  game  be- 
gins to  wear  some  of  the  aspects  of  the  gigantic  business  done  here  two 
years  ago  by  Arnold  &  Co.,  Baldy  Ryan,  and  some  other  Napoleons  of 
finance,  who  brought  many  investors  to  grief  or  were  themselves  involved 
in  disaster.  The  People's  Mail  Bank  should  be  carefully  looked  into,  and 
the  high  standing  of  some  of  Mr.  Lewis'  friends  here  in  the  financial  world 
should  be  no  shield  for  him. 

The  scheme  does  not  look  good  or  right ;  and  the  closer  it  is  looked  into  the 
less  evident  it  seems  that  the  project  is  one  that  the  authorities  should 
permit  to  flourish.  Mr.  Lewis'  career  as  a  financier  in  the  past  is  so  Vari- 
colored and  exciting  that,  while  it  may  be  that  he  has  evolved  something 
practical  and  straight  out  of  old  experiences  fanciful  and  devious,  it  is  at 
least  only  a  counsel  of  caution  that  his  present  gigantic  undertaking — that 
of  establishing  the  biggest  bank  in  the  world  on  other  people's  money — 
should  be  subjected  to  the  most  rigid  inquisition  by  every  city,  State,  and 
National  authority  that  may  have  jurisdiction  of  it  as  a  whole  or  in  part. 

This  "People's  United  States  Bank"  may  be  all  right.  I  don't  say  that 
it  is  not.    All  I  say  is  that  it  should  bear  investigation. 

"the  president  pirects  me.*' 
The  following  official  letter  of  transmittal  is  self-explanatory: 
THE  WHITE  HOUSE 

WASHINOTOK 

My  Dear  Mr.  Postmaster-General:  The  President  directs  me  to  send  to 
you  for  investigation  the  enclosed  letter  and  accompanying  clipping  frono 
Mr.  Howard  E.  Nichols  of  St.  Louis,  Missouri,  dated  the  4th  instant. 

Very  truly  yours, 

Wm.  Loeb,  Jr., 
Secretary  to  the  President. 
How.  R.  J.  Wynne,  Postmaster-GeneraL 

The  first  phrase  of  this  letter,  "The  President  directs  me,"  would 
seem  on  its  face  to  mean  that  Roosevelt  read  the  enclosures  and  de- 
liberately ordered  the  investigation  which  ensued.  The  inspectors 
point  out  that  Nichols'  letter  mentioned  by  name  the  Bank,  the  De- 
velopment and  Investment  Company,  the  United  States  Fibre  Stop- 
per Company,  and  the  World's  Fair  Contest  Company.  It  hinted 
that  the  circulation  claimed  by  the  magazines  might  be  fictitious.  It 
charged  the  corruption  of  certain  postal  officials.  It  linked  all  the 
Lewis  enterprises  as  a  "deep,  well  laid  plan  to  get  a  lot  of  people 


THE  DREYFUS  CASE  OF  AMERICA  377 

to  buy  stock  in  several  enterprises."  The  inspectors,  therefore,  aver 
that  the  direct  cause  of  the  fraud  order  against  the  bank  was  an  in- 
vestigation set  in  motion  by  the  President. 

Inspector  Stice  inserted  into  the  record  on  behalf  of  the  Govern- 
ment, Roosevelt's  memorandum  of  November  24,  1903,  transmitting 
Bristow's  report  to  Congress.  He  also  offered  a  copious  extract  from 
that  report  headed,  "Employment  of  Landvoight's  Son,"  which  has 
no  apparent  relevancy  to  the  Lewis  case.  He  also  inserted  the  ex- 
tract headed,  "E.  G.  Lewis,  St.  Louis,  Mo.,"  heretofore  reprinted. 
By  way  of  explanation,  he  made  this  statement : 

Further  on  in  my  testimony  I  will  show  that  this  investigation  of  the 
Lewis  Publishing  Company  was  taken  up  by  direction  of  the  President, 
in  February,  1905. 

There  is  no  foundation  for  this  assertion,  save  this  brief  three- 
line  letter  of  transmittal.  The  whole  basis  of  the  inspectors'  claim 
is  the  phrase:  "The  President  directs  me."  That  phrase  is  well 
known  in  official  Washington  as  a  mere  routine  form  employed  by 
the  President's  secretaries  in  transferring  to  the  various  bureaus 
concerned,  letters  improperly  addressed  to  the  President.  Loeb's 
letter  of  transmittal  expresses  no  desire  on  the  part  of  the  President 
that  a  report  of  the  findings  of  this  investigation  be  rendered  to  him- 
self. No  such  report  was  ever  requested  or  submitted.  These  facts 
alone  would  seem  to  be  conclusive  that  Roosevelt  handled  this  af- 
fair in  a  merely  routine  manner,  if,  indeed,  as  is  most  unlikely,  it 
was  ever  called  to  his  attention.  The  inspectors'  attempt  to  justify 
themselves  in  this  fashion  far  rather  exposes  them  to  the  suspicion 
of  cowardice  in  seeking  to  shield  themselves  behind  the  President's 
authority,  than  serves  to  justify  the  rigors  of  their  investigation. 

On  even  date  with  Loeb's  letter  to  the  postmaster-general,  there 
was  received  by  the  latter  the  following  communication  from  one, 
Walter  C.  Taylor  of  Saint  Louis : 

Dear  sir:  I  enclose  an  article  written  by  the  editor  of  a  local  weekly, 
referring  to  a  scheme  controlled  by  the  publishers  of  the  Woman's  Maga- 
zine of  St.  Louis.  I  may  say  that  I  have  no  first-hand  knowledge  of  the 
concern.  I  have,  however,  seen  its  literature,  and  I  agree  with  Mr.  Reedy 
that  the  promises  made  are  such  as  would  be  considered  only  by  people 
who  were  nosing  about  with  an  aching  to  lose  their  money.  This  is  my 
impression  from  an  outside  view.  I  do  not  know  that  the  investigation  of 
the  banking  end  of  the  scheme  comes  within  the  authority  of  the  postal 
department. 

Inspector  Stice  makes  this  comment: 

I  call  the  attention  of  the  committee  to  the  fact  that  the  Taylor  letter 
with  this  clipping  was  in  the  hands  of  the  postmaster-general  indepen- 
dently of  the  Nichols  letter  and  clipping  which  went  to  the  White  House. 
Thus  the  clipping  was  in  the  hands  of  both  ofiicials  at  about  the  same  time. 
The  case  for  investigation  of  the  Lewis  Publishing  Company,  charging  them 
with  a  scheme  to  defraud  in  the  promotion  of  the  People's  United  States 
Bank,  was  already  in  the  hands  of  the  inspector-ln-charge  at  St.  Louis. 
*  *  *  That  is  the  way  the  jacket  for  that  case  was  made  up.  Bear  in 
mind  that  this  case  was  independent  of  what  was  going  on  in  Washington, 
either  at  the  White  House  or  in  the  office  of  the  postmaster-general,  and 
that  Mr.  Dice,  who  had  been  inspector-in-charge  at  St.  Louis  for  a  number 


378  THE  SIEGE  OF  UNIVERSITY  CITY 

of  years,  died  about   November  and  Mr.  Fulton  had  been  assigned  there, 
I  thinli,  some  time  in  December,  1904. 

ENTER    POSTMASTER-GENERAL    WYNNE. 

The  very  first  mention  of  the  People's  United  States  Bank  in  the 
columns  of  the  Woman's  Magazine  occurred  in  the  issue  of  Feb- 
ruary, 1904.  What  complainants  there  may  have  been  against  the 
mere  project  of  the  bank  at  its  earliest  announcement,  do  not  appear 
of  record.  But  all  such  complaints,  if  any  there  were,  appear  to 
have  been  jacketed  b}'  the  inspectors  with  miscellaneous  complaints 
against  the  Lewis  Publishing  Company.  It  is  recorded  there  were, 
all  told,  forty-seven  complaints  filed  prior  to  February  11,  1906. 
No  investigation  was  made  of  these  until  February  7,  1906,  after 
Mr.  Dice's  death.  The  People's  United  States  Bank  was  incor- 
porated on  November  14,  1904.  Three  days  later  Lewis  thus  ad- 
dressed the  postmaster-general  at  W^ashington : 

You  will  perhaps  recall  your  trip  to  St.  Louis  when  I  had  the  pleas- 
ure of  taking  jou  out  on  a  trolley  ride  to  see  the  site  of  the  new  publish- 
ing plant  of  the  Woman's  Magazine.  *  *  *  For  the  past  five  or  six 
months,  1  have  been  organizing  a  great  bank  to  carry  on  all  of  its  busi- 
ness by  mail.  *  *  *  I  inclose  you  herewith  a  copy  of  my  booklet, 
"Banking  by  Mail,"  which  gives  considerable  detail  about  it. 

Some  time  ago,  I  received  a  letter  from  one  of  the  acting  assistant  at- 
torneys-general for  the  PostofBce  Department,  advising  me  that  the  use  of 
tlie  name  "postal"  was  misleading,  and  was  evidently  used  by  me  in  order 
to  mislead  people  to  think  that  it  was  a  Government  institution.  I  then 
wrote  to  him,  explaining  the  exact  circumstances.  *  *  *  He  wrote  back 
that  the  words,  "People's  Mail  Bank,"  were  equally  objectionable.  I  then 
took  the  matter  up  personally  with  Postmaster-General  Payne  on  his  visit 
to  Chicago,  and  Mr.  Payne  informed  my  associates, — Mr.  Wilbur,  of  the 
Royal  Trust  Company,  being  one  of  them, — that  there  could  be  no  legal 
objection  to  the  word  "Mail"  in  the  name  of  our  bank.  He  said  that  he 
saw  no  reason  whatever  why  we  should  not  use  it.  He  promised  that  when 
he  reached  Washington  he  would  take  the  matter  up  officially  for  me.  Un- 
fortunately, Mr.  Payne  died  soon  afterwards  without  ever  having  been  able 
to  take  up  the  matter  and  adjust  it. 

We  have  recently  incorporated  the  bank  under  the  name  of  the  People's 
United  States  Bank,  with  a  capital  of  one  million  dollars.  On  December 
24,  this  capital  is  to  be  increased  to  five  million  dollars,  full  paid.  I  in- 
corporated the  bank  under  the  name  of  the  People's  United  States  Bank, 
in  order  to  demonstrate  to  the  Department  our  intention  and  desire  to 
comply  with  tlieir  wishes  in  every  way.  Having  done  this,  I  now  appeal  to 
you  for  permission  to  change  the  name  of  this  bank  on  December  24  to  the 
People's  Mail  Bank. 

Your  favorable  action  in  this  matter  will  be  greatly  appreciated,  not  only 
by  myself  and  my  associates,  but  by  the  two  million  people  who  are  inter- 
ested in  this  institution.  I  desire  to  come  out  in  the  January  issue  of  the 
Woman's  Magazine  and  announce  to  these  people  that  through  the  kind  ef- 
forts of  Postmaster-General  Wynne  the  name  of  the  bank  had  been  changed 
to  the  People's  Mail   Bank  with  the  full  consent  of  the  Department. 

This  letter  was  referred  to  the  Assistant  Attorney-General  for 
the  Postoflice  Department,  and  on  November  23,  1904,  the  following 
memorandum,  signed  by  E.  W.  Lawrence,  was  sent  to  the  postmaster- 
general  : 


THE  DREYFUS  CASE  OF  AMERICA  379 

In  connection  with  the  request  of  Mr.  E.  G.  Lewis,  contained  in  the  at- 
tached letter,  that  he  be  permitted  to  use  the  name  People's  Mail  Bank  for 
a  financial  institution  which  he  is  about  to  establish,  your  attention  is  called 
to  the  statements  made  concerning  Mr.  Lewis  and  his  relations  with  Harri- 
son J.  Barrett,  late  assistant  attorney  for  the  Postoffice  Department,  to  be 
found  on  page  37  of  the  report  of  the  honorable  fourth  assistant  postmaster- 
general  on  "The  investigation  of  certain  divisions  of  the  Postoffice  Depart- 
ment," dated  October  24,  1903.  The  accuracy  of  the  statement  of  Mr.  Lewis 
that  he  was  informed  by  Postmaster-General  Payne  that  the  latter  "saw  no 
reason  whatever"  why  the  name  People's  Mail  Bank  should  not  be  used, 
maj"^  be  open  to  question,  as  the  reputation  of  Mr.  Lewis  for  veracity  is  not 
of  the  best. 

The  bias  against  Lewis  in  the  Postoffice  Department  officially  re- 
sulting from  Bristow's  statement  based  upon  the  report  of  Vickery 
and  Fulton,  is  here  very  plainly  apparent.  Such  was  the  effect  of 
Lewis'  present  of  a  gold  watch!  The  prejudice  of  Lawrence  gains 
additional  significance  because,  as  the  sequel  will  show,  the  duty  of 
preparing  the  memorandum  of  charges  against  Lewis,  accompany- 
ing the  citation  (to  show  cause  why  a  fraud  order  should  not  be 
issued.)  fell  to  him.  Lawrence  was  also  the  man  who  later  repre- 
sented the  Government  at  the  hearings  before  Goodwin. 

Wynne  must  have  remembered  very  well  his  visit  to  University 
City.  The  private  street  car  "Mabel"  of  the  Lewis  Publishing 
Company  had  taken  himself  and  a  considerable  party  of  St.  Louis 
bankers  and  business  men  out  to  the  plant  of  the  Lewis  Publishing 
Company.  There  they  were  entertained  as  Lewis'  guests.  Wynne's 
acceptance  of  Lewis'  invitation  would  seem  to  indicate  that  the 
latter 's  reputation  for  veracity  in  his  home  city  was  not  such  that 
he  was  tliereby  much  discredited !  What  effect  the  memorandum 
of  Lawrence  may  have  had  upon  the  postmaster-general's  mind  can 
only  be  conjectured.  His  reply  to  Lewis  of  November  25,  1905, 
was  purely  official  in  both  tone  and  content.  He  simply  pointed  out 
that  the  policy  of  the  Postoffice  Department  forbade  the  employ- 
ment of  the  words  "postal"  or  "mail"  as  part  of  the  name  of  any 
bank.     He  concluded  thus: 

I  have  no  doubt  that  the  designation  "People's  United  States  Bank"  will 
answer  your  purpose  quite  as  fully  and  well  as  that  which  you  desire  to 
adopt,  and  fail  to  see  that  the  continued  enforcement  of  this  measure  of 
public  policy  will  work  serious  hardship  upon  you  and  your  associates. 

THE   INVESTIGATION  IS   ORDERED. 

Lewis  would  better  have  let  well  enough  alone.  For  the  atten- 
tion of  the  postmaster-general  was  thus  called  forcibly  to  the  bank. 
Let  us  see  what  consequences  followed.  The  first  official  act  took 
the  form  of  instructions  from  Fulton,  as  inspector-in-charge  at  St. 
Louis,  to  Inspectors  Stice  and  Sullivan,  bearing  date  of  February  7, 
1905.  Two  cases  were  turned  over  to  Stice  and  Sullivan  for  inves- 
tigation. Case  20610-C  alleged  the  violation  of  Section  1617, 
Postal  Laws  and  Regulations  of  1902  by  the  Lewis  Publishing 
Company.  Case  3093 1-C  alleged  the  violation  of  the  same  section 
by  the  Development  and  Investment  Company.     The  reference  to 


380  THE  SIEGE  OF  UNIVERSITY  CITY 

tliis  section  of  the  law  amounted  to  a  charge  that  both  companies 
•were  making  use  of  the  United  States  mails  in  the  promotion  of 
schemes  to  defraud.  The  attention  of  the  inspectors  was  called  by 
Fulton  to  Lewis'  initial  circular  letter  inviting  subscriptions  to  the 
stock  of  the  bank.  By  a  weird  exercise  of  imagination,  Fulton  sug- 
gested that  the  inspectors  "look  into  the  question  as  to  whether  or 
not  the  scheme  of  the  People's  United  States  Bank  is  one  described 
as  a  lottery"  in  the  inspectors'  confidential  book  of  instructions. 
He  further  questions  "whether  the  scheme  is  one  described  as 
fraudulent"  elsewhere  in  that  manual.  "These  suggestions/'  the 
letter  continues,  "are  given  merely  as  partial  lines  of  inquiry  and 
not  for  the  purpose  of  outlining  your  investigation  completely.  This 
should  be  taken  up  in  such  manner  as  you  see  fit.  With  the  papers 
will  be  found  an  article  from  the  St.  Louis  Mirror,  February  2, 
1905,  edited  by  W.  M.  Reedy,  which  was  handed  me  today."  The 
inspector-in-charge  does  not  state  by  whom  the  Mirror  article  was 
brought  to  his  attention. 

The  next  day  the  following  communication,  over  the  signature  of 
Chief  Inspector  W.  J.  Vickery,  presumably  enclosing  the  complaint 
of  Nichols  to  Secretary  Loeb  and  that  of  Taylor  to  the  postmaster- 
general,  was  forwarded  to  Fulton  from  Washington: 

The  inclosed  papers  will  explain  themselves.  I  think  you  have  a  case 
covering  the  matter,  but  the  postmaster-general  is  anxious  to  have  an  imme- 
diate and  thorough  investigation  made,  covering  everything  to  which  this 
letter  may  lead.  I  am  anxious  that  you  should  undertake  it  personally,  but 
in  order  to  share  the  responsibility,  if  you  think  best,  take  any  one  of  your 
inspectors  to  assist  you.  Of  course,  it  will  not  be  advisable  to  take  any 
who  may  have  stock  in  any  of  Lewis'  enterprises;  but  follow  the  case  wher- 
ever it  may  lead,  even  if  it  touches  people  in  Washington. 

Why  was  the  postmaster-general  so  anxious  to  have  made  "an 
immediate  and  thorough  investigation  covering  everything  to  which 
this  letter  may  lead"  ?  Possibly  (upon  the  theory  of  the  inspectors) 
by  the  President's  order.  More  probably,  the  allegations  of  Nichols 
may  have  suggested  a  possible  aftermath  of  Bristow's  investigation. 
Nichols'  letter  charged  specifically  the  corruption  of  Barrett  and 
other  postoflice  officials  by  Lewis.  This  portion  of  Bristow's  report 
had  been  called  to  the  postmaster-general's  attention  by  Lawrence 
on  November  23  preceding.  The  circumstances  of  his  trip  to  St. 
Louis  and  of  his  visit  to  Lewis'  plant  had  been  vividly  recalled  to 
Wynne's  mind  by  the  correspondence  of  Lewis  touching  the  pro- 
posed title  for  the  bank.  There  appears  also  of  record  a  letter 
signed  by  I'liird  Assistant  Madden  to  Wynne,  under  date  of  Janu- 
ary 21,  1905,  which  links  the  name  of  A.  M.  Travers,  chief  clerk  in 
Madden's  office,  with  that  of  Lewis  through  the  mediation  of  Harri- 
son J.  Barrett. 

What  other  cause  of  anxiety  the  postmaster-general  may  have 
had  is  not  of  record.  It  is,  of  course,  conceivable,  despite  the 
protestations  of  Inspector  Stice,  that  Senator  Piatt  might  have 
interested  himself  in  the  case  of  the  People's  United  States  Bank 


THE  DREYFUS  CASE  OF  AMERICA  381 

prior  to  the  expiration  of  Wynne's  term  of  office.  The  selection  of 
Cortelyou  for  this  and  similar  purposes  may  have  been  agreed  upon 
months  earlier.  Either  Piatt  as  senator  from  New  York,  or  Cor- 
telyou as  chairman  of  the  Republican  Campaign  Committee,  could 
certainly  have  had  the  ear  of  the  postmaster-general  at  any  moment. 
Whether  or  not  the  nature  of  the  proposed  bank  as  a  rival  of  the 
express  companies  and  the  Postoffice  Department  itself  in  the  sale 
of  money  orders,  and  as  the  pioneer  postal  bank  in  America,  was 
the  occasion  in  whole  or  part  of  the  postmaster-general's  "anxiety," 
and  if  so,  at  whose  instance,  is  a  question  suggested  by  the  cir- 
cumstances. 

The  reason  of  the  anxiety  of  Viekery  that  Fulton  undertake  the 
investigation  personally  is  much  less  dubious.  Fulton  was  the  asso- 
ciate of  Viekery  in  the  investigation  from  which  Bristow  drew  his 
strictures  against  Lewis.  Doubtless,  he  saw  here  an  opportunity 
further  to  discredit  the  administration  of  the  late  George  A.  Dice, 
and  also  to  win  for  Fulton  and  himself  additional  glorj^^.  Viekery 
had  the  ear  of  the  postmaster-general.  He  may  have  thoroughly 
imbued  W^'^nne  with  the  Bristow-Kansas-anti-Dice  theory  of  the 
Lewis  case.  He  may  also  have  communicated  to  Wynne  his  suspi- 
cions that  all  was  not  right  in  the  office  of  the  third  assistant. 
Already,  as  we  know,  there  was  bad  blood  between  the  office  of  the 
third  assistant  and  the  division  of  the  postoffice  inspectors.  The 
phrase,  "Follow  the  case,  wherever  it  may  lead,  even  if  it  touches 
people  in  Washington,"  was  evidently  intended  as  a  spur  to  Fulton's 
ambition.  The  people  in  Washington  suggested  are  evidently 
Madden  and  his  chief  clerk,  Travers.  However  all  this  may  have 
been,  the  Lewis  case  was  now  fairly  launched,  and  the  inspectors' 
service  was  definitely  committed  to  its  prosecution. 

Fulton  acknowledged  promptly  on  February  11  the  receipt  of 
Viekery 's  "personal  communication  of  the  8th  instant,  suggesting 
an  investigation  of  the  various  concerns  promoted  by  E.  G.  Lewis 
of  this  city."  By  way  of  reply,  he  forwarded  a  copy  of  his  letter 
of  instructions  of  February  6  to  the  inspectors.  He  stated  that  it 
was  purposed  to  extend  the  investigation  to  cover  the  Woman's 
^lagazine  and  other  of  Lewis'  promotions,  but  that  it  had  not  been 
his  intention  to  do  more  than  supervise  the  investigation.  He  says, 
however,  "I  will  give  this  case  some  personal  attention,  in  accord- 
ance with  your  instructions."  A  portion  of  this  letter  can  be  con- 
sidered more  properly  in  connection  with  the  question  of  second- 
class  entry,  but  Fulton  proceeds  in  part  as  follows: 

Regarding  your  request  for  an  immediate  investigation  covering  the 
Lewis  promotions,  I  desire  to  state  that  the  stock  of  the  People's  United 
States  Bank  is  not  to  be  issued  to  subscribers  and  the  bank  is  not  to  be 
completely  and  distinctly  installed  until  March  4.  For  this  reason,  the  in- 
spectors and  myself  think  it  unwise  to  undertake  an  investigation  into  the 
financial  responsibility  of  the  bank  and  other  concerns  until  that  time. 
Meantime,  we  had  contemplated  the  attempt  to  secure  the  co-operation  of 
a  state  bank-examiner.    In  view  of  these  facts,  it  is  deemed  unwise  to  begin 


882  THE  SIEGE  OF  UNIVERSITY  CITY 

active  work  until  that  date,  especially  in  view  of  the  charges  that  the  funds 
of  these  various  institutions  are  being  "kited"  from  one  to  the  other  as  is 
necessary  to  make  a  showing  when  one  of  the  institutions  is  attacked. 

Had  Fulton  been  himself  the  head  of  the  State  banking  depart- 
ment of  Missouri,  he  could  not  have  displayed  more  sense  of  power. 
The  zeal  of  his  house  was  evidently  "eating  him  up." 

SECOND    ARTICLE    IN    THE    MIRROR. 

The  Mirror  of  Februarj^  9,  1905,  contained  the  following  article 
by  Reedy,  which  was  immediately  turned  over  to  the  inspectors  by 
Fulton : 

MR.   LEWIS  AND   HIS   3IAIL   BANK  SCHEME. 

Last  week's  Mirror  contained  an  article,  in  answer  to  inquiries  from  all 
over  the  country,  setting  forth  the  general  haziness,  as  it  seemed  to  me, 
of  the  scheme  of  Mr.  E.  G.  Lewis'  People's  United  States  Bank,  duly  incor- 
porated under  the  laws  of  the  State  of  Missouri.  A  cursory  glance  was 
taken  at  the  career  of  Mr.  E.  G.  Lewis  and  the  character  of  some  of  his 
former  exploitations.  He  has  floated  a  number  of  schemes  a  short  while, 
and  for  a  short  distance.  Thej  followed  one  another  quickly.  His  Woman's 
Magazine,  at  ten  cents  a  year,  with  two  millions  circulation,  and  his 
Woman's  Farm  Journal  of  the  same  character  of  publication,  seem  flour- 
ishing, and  it  has  been  through  these  media  he  secured  the  stockholders  and 
depositors  in  his  mail  bank.  I  have  read  a  great  deal  of  the  literature  of 
promotion  of  these  schemes  in  the  publications  mentioned,  and  I  fmd  it,  as 
I  said,  extremely  hazy  and  stamped  with  an  insistence  upon  altruistic  pur- 
pose which,  in  its  over-emphasis,  is,  to  put  it  mildly,  suspicious.  Mr.  Lewis 
has  been  investigated  by  the  postal  authorities,  but  that  was  at  a  time  when 
he  had  a  friend  in  the  postoffice  in  Inspector  Dice,  another  in  the  man  in 
the  weighing  department,  another  in  Postmaster  Baumhoff,  and  a  relative 
of  Inspector  Dice  in  his  (Lewis')  own  office  employ. 

There  was  a  time  when  the  reports  of  inspection  of  Lewis'  business  made 
in  the  evening  were  in  his  hands  in  the  morning  before  they  were  sent  on  to 
Washington.  This  was  when  he  ran  an  endless  chain  card  scheme  and 
when  he  ran  a  great  World's  Fair  guessing  contest.  But  Inspector  Dice  is 
dead  now,  and  there  has  been  a  cleaning  out  of  "the  old  gang"  in  the  Postal 
Department.  Mr.  Lewis  has  had  a  clean  bill  of  health  and  he  has  been 
permitted  to  use  the  mails  to  start  his  bank,  and  it  is  not  for  me  to  say 
anything  as  to  how  the  said  clean  bill  of  health  may  have  been  obtained.  I 
say  no  more  than  that  Mr.  Lewis'  promotion  literature  seems  to  promise 
too  sure  and  too  big  profits  to  his  stockholders  and  depositors.  I  say 
further,  that  his  stock  subscription  blanks  are  framed  in  such  a  way  as  to 
commit  the  signer  to  what  looks  like  going  into  a  blind  pool  and  giving  to 
Lewis  authority  to  use  the  money  subscribed  in  any  way  he  may  see  fit  to 
use  it  in  connection  witii  the  bank.  The  subscriber  appears  to  have  no  re- 
course against  Lewis  if  anything  goes  wrong  with  the  bank.  I  ol)serve  that 
Mr.  Lewis  freely  pledges  his  personal  fortune  to  the  support  of  the  scheme, 
but  whether  that  fortune  will  l)e  sufficient  to  protect  the  interests  of  eighty- 
five  thousand  stockholders,  I  don't  know.  I  don't  understand  that  Mr.  Lewis 
has  a  large  personal  fortune;  and  the  companies  he  has  put  forward  seem, 
in  many  instances,  to  be  rather  heavily  incumbered  with  mortgages  and 
deeds  of  trust. 

He  may  be  making  all  the  money  he  says  he  is  and  the  property  he  has 
acquired  througli  his  companies  may  be  worth  what  he  says  it  is,  and  all 
paid  for,  but  tliere  are  documents  in  evidence,  I  imagine,  at  Clayton,  St. 
Ix)uis  county,  which,  if  examined,  might  show  that  hundred  thousand  dol- 
lar transactions  can  by  means  of  draw-downs  and  come-backs,  dwindle 
to  the  insignificance  of  mere  fifteen  or  twenty  thousand  dollar  payments. 


THE  DREYFUS  CASE  OF  AMERICA  383 

When  the  minor  employees  in  a  great  bank  flotation  or  other  scheme  are 
dropped  because  they  ask  questions  about  records  they  are  instructed  to 
make,  things  don't  look  right  to  me.  When  the  analysis  of  the  business  of 
Mr.  Lewis  shows  that  while  he  has  a  great  revenue  he  has  a  tremendous 
expense,  and  when  there  are  conditions  favoring  the  possibility  of  one  great 
scheme  being  called  into  being  to  strengthen  another,  and  all  based  upon 
a  system  of  palavering  the  public  into  a  belief  that  a  man  lives  and 
breathes  and  has  his  being  only  to  make  money  for  that  public,  I  don't  like 
the  looks  of  it.  And  when  Mirror  readers  ask  me  about  the  general  char- 
acter of  the  scheme  I  give  them  my  opinion  as  plainly  as  I  have  been 
able  to  formulate  one.  Mr.  Lewis'  mail  bank  may  be  all  right,  but  its  looks 
on  paper  made  the  postal  authorities  dubious,  and  some  things  that  I  have 
heard  about  the  postal  inspections  of  Mr.  Lewis'  schemes  in  the  past  lead 
me  to  have  some  doubt  cither  as  to  the  competency  or  the  integrity,  at  any 
rate,  the  infallibility,  of  the  inspectors. 

This  bank  scheme  of  Mr.  Lewis  is  a  big  one,  a  very  big  one.  Its  carrying 
out  is  dependent  upon  the  co-operation  of  hundreds  of  thousands  of  people 
who  are  asked  to  hand  over  their  small  savings  to  Mr.  Lewis.  How  the 
earnings  necessary  to  support  the  bank  are  to  be  made  on  these  savings 
is  not  lucidly  set  forth.  It  seems  to  me  that  Mr.  Lewis'  autliority  in  this 
banking  scheme  is  such  that  he  might  loan  the  money  to  himself  or  some  of 
his  companies,  with  no  security  other  than  that  personal  fortune  of  his, 
of  wliich  one  may  be  skeptical.  One  may  be  skeptical  of  any  bank  in  which 
a  leading  factor  is  a  faith  curist  who  lives  by  selling  cathartic  lozenges  to  a 
public  that  cannot  be  moved  by  faith  alone.  Mr.  Lewis  has  pretty  nearly 
two  pages  of  "dope"  about  this  bank  scheme  in  the  January  issue  of  his 
Woman's  Farm  Journal.  I  have  read  and  reread  those  two  pages  with  care. 
I  have  had  them  read  by  a  financial  expert  and  a  lawyer  for  my  special 
benefit.  The  sum  total  of  my  efl'ort  to  determine  just  what  are  the  specific 
guaranties  of  securit}^  for  investment  or  deposit  in  this  People's  United 
States  Bank  has  been  only  confusion.      *     *     * 

Mr.  Lewis  may  be  another  banker  like  those  who  dominate  money  mat- 
ters in  New  York  or  Chicago,  or  he  may  be  a  financier  only  in  a  Chad- 
wickian  sense,  hypnotized  by  himself  into  capacity  to  hypnotize  others  out 
of  their  hoards.  If  Rufus  J.  Lackland,  William  H.  Tliompson,  Charles  H. 
Huttig,  Walker  Hill,  William  H.  Lee,  A.  A.  B.  Woerheide,  any  or  all  of 
them — hankers  of  St.  Louis — will  read  Mr.  Lewis'  literature  about  this  Peo- 
ple's United  States  Bank  and  tell  me  that  it  is  a  good,  safe,  sane  and 
sound  financial  venture,  founded  on  correct  principles  of  banking,  I  will 
recommend  it  as  an  investment  and  a  depository  to  the  people  throughout 
the  country  who  write  the  Mirror  for  information  of  the  character  of  the 
undertaking. 

THE    EVE    OF   THE    INQUIRY. 

The  official  instructions  to  Inspectors  Stice  and  Sullivan  now 
appear  to  have  been  practically  complete.  In  justice  to  the  inspec- 
tors, we  digest,  from  the  Ashbrook  Hearings,  this  testimony  of  Stice: 

I  beg  to  call  to  the  attention  of  the  committee  that  matters  referred  to 
up  to  this  time  all  occurred  prior  to  the  entrance  of  Mr.  Cortelyou  into 
the  Postoffice  Department.  The  investigations  were  ordered  by  President 
Roosevelt  and  Postmaster-General  Wynne.  They  were  actively  under  way 
from  February  7,  the  date  that  the  papers  were  turned  over  to  me  and  Col. 
Sullivan,  before  Mr.  Cortelyou  came  in  on  March  4  following.  I  mean  by 
under  way,  the  inquiry  as  to  the  different  businesses  that  were  to  be  inves- 
tigated, the  reading  of  all  literature,  and  getting  together  the  magazines. 
Unless  that  is  done,  no  person  is  able  to  understand  fully  this  case.  They 
must  go  to  the  beginning  and  read  every  article  that  was  used  in  the  pro- 
motion of  any  of  these  institutions.    We  engaged  ourselves  in  this  way  prior 


384  THE  SIEGE  OF  UNIVERSITY  CITY 

to  our  actual  appearance  at  the  office  of  the  promoter.  We  were  thus  en- 
gaged from  February  7  up  to  March  H,  when  the  inspectors  connected  with 
the  investigation  first  appeared  at  the  office  of  Mr.  Lewis.  Copies  of  the 
Woman's  Magazine  and  Woman's  Farm  Journal  containing  any  reference 
to  any  of  these  institutions  were  obtained.  I  read  them  all  carefully — 
studiously. 

I  have  undertaken  to  make  it  clear  to  the  committee  that,  so  far  as  I 
know,  this  case  was  placed  in  the  hands  of  Col.  W.  T.  Sullivan  and  myself 
regularly  without  any  other  instructions  than  what  we  might  have  had  in 
any  other  case.  We  entered  upon  this  case,  both  of  us,  with  an  open  mind. 
We  knew  nothing  of  Mr.  Lewis  or  his  business  and  had  never  investigated 
him  before.  Mr.  Sullivan  had  been  recently  transferred  to  St.  Louis  from 
Denver,  Colorado.  I  had  been  transferred  from  the  Kansas  City  division 
in  June  preceding.  Neither  Mr.  Cortelyou,  Mr.  Goodwin,  Mr.  Wyman,  nor 
any  other  persons  whose  names  are  mentioned  in  the  evidence  as  being 
parties  to  a  cons]iiracy,  had  any  connection  with  these  cases  up  to  the 
time  the  investigation  was  made  and  our  reports  submitted  in  May,  1905, 
with  the  possible  exception  of  Mr.  Fulton. 

The  attention  of  Lewis,  of  course,  had  been  called  to  the  articles 
of  Reedy  in  the  Mirror.  The  relation  between  Nichols  and  Reedy 
appears  to  have  been  known  to  him.  It  was  apparently  to  set  at 
rest  these  charges  that  he  dispatched  the  following  letter  to  the 
chief  inspector  at  Washington,  which  had  the  effect  of  hurrying 
on  his  disaster: 

Recently  some  of  the  enterprises  in  which  I  am  concerned,  as  well  as 
myself,  have  been  subject  to  very  unfriendly  criticism  in  a  local  weekly 
publication  here,  making  various  vague  and  indefinite  charges.  The  princi- 
pal accusation  appears  to  be  that  in  some  way  I  have  been  able  to  hoodwink 
Postoffice  Department  officials  and  thereby  seal  my  enterprises  and  inten- 
tions from  publicity. 

I  have  reason  to  think  that  the  instigator  of  this  attack  is  a  young  man, 
formerly  in  my  employ,  whose  animus  is  extremely  hostile  and  who  possesses 
little  sense  of  responsibility  in  matters  of  this  sort.  But,  whatever  the  mo- 
tive or  sources  of  the  attack  may  be,  justice  to  the  Postoffice  Department 
as  well  as  to  myself  and  to  the  many  very  responsible  business  men  of  St. 
Louis  and  elsewhere  who  have  been  for  some  years  interested  and  asso- 
ciated with  me  in  my  various  enterprises,  leads  me  to  respectfully  request 
your  Department  to  make  an  immediate  and  thorough  investigation  of  my 
enterprises  as  fully  as  you  may  consider  appropriate.  Every  facility  will 
be  given  to  your  Department  to  make  the  investigation  as  thorough  as  you 
desire.  All  that  we  shall  ask  is  that  the  investigators  may  be  disinterested 
and  intelligent  men,  acquainted  with  the  subjects  involved  in  my  lines  of 
business. 

Postmaster-General  Hitchcock,  in  his  response  in  1911  to  the 
charges  of  the  Lewis  Publishing  Company,  comments  ujion  this 
commimication  as  follows: 

On  the  day  after  the  induction  in  office  of  Postmaster-General  Cortelyou, 
March  8,  1905,  Mr.  E.  G.  Lewis,  president  of  the  Lewis  Publishing  Com- 
pany, addressed  a  letter  to  the  chief  inspector  for  the  Postoffice  Depart- 
ment, requesting  a  thorougli  and  complete  investigation  of  his  several  en- 
terprises. It  would  now  ai)]iear  that  all  doubt  as  to  the  necessity  of  an  in- 
vestigation had  been  cleared  away. 


CHAPTER  XVII. 

THE   NEW  FEDERAL   BANK-EXAMINERS. 

Lewis'  Subscription  to  Capital  Stock — The  Stock  in  Lewis' 
Name— Stockholders'  Proxies — Was  Lewis  Millionaire 
OR  Pauper? — The  Alleged  Shortage — The  Increase  in 
Capital  Stock — The  Fifty  Thousand  Dollar  Note — 
The  Note  for  One  Hundred  and  Forty-Six  Thousand 
Dollars — Was  There  Any  Shortage.'' — Other  Loans  of 
the  Bank. 

A  kind  of  grim  humor  attaches  in  retrospect  to  Lewis'  childlike 
simplicity  in  turning  to  the  banking  department  of  Missouri  and 
to  the  Postoffice  Department  at  Washington  as  his  natural  helpers. 
Was  Lewis  conscious  of  fraudulent  misrepresentation  in  the  pro- 
motion of  the  bank?  Was  he  aware  of  having  embezzled  the  bank's 
funds  and  converted  the  money  to  his  personal  use?  Did  he  know 
of  any  shortage  of  hundreds  of  thousands  of  dollars  in  the  funds 
for  wliich  he  was  responsible?  If  such  charges  are  true,  one  can 
hardly  account,  upon  any  theory  save  that  of  madness,  for  Lewis' 
urgent  and  oft-repeated  invitation  to  the  State  authorities  to  send 
their  bank  examiners  and  to  the  Federal  authorities  to  send  post- 
office  inspectors  to  make  an  investigation  of  his  affairs.  To  assert, 
as  the  inspectors  have  done,  that  Lewis  was  merely  bluffing,  in  the 
hope  that  a  show  of  willingness  to  throw  open  his  books  and  papers 
might  enable  him  to  get  off  without  detection,  is  to  accuse  Lewis 
of  a  kind  of  folly  that  is  wholly  out  of  keeping  with  the  admitted 
quality  of  his  wits.  For  Lewis,  whatever  his  faults,  is  not  a  fool. 
Nor  is  any  such  supposition  borne  out  by  the  event.  Lewis,  in  fact, 
has  never  made  any  attempt  to  conceal  anything.  Except  for  his 
refusal  to  permit  the  inspectors  to  continue  their  investigations 
beyond  the  point  where  their  animus  and  incompetence  had  become 
apparent,  and  after  the  bank  examiners  had  completed  an  exhaustive 
inquiry,  his  attitude  has  always  been  that  of  courting  investigation. 
All  the  circumstances  suggest  to  the  dispassionate  inquirer  that 
Lewis  was  misled  by  his  temperamental  optimism  into  the  belief 
that  everybody  would  be  as  delighted  that  his  achievement  was  a 
huge  success  as  he  was  himself.  Therefore,  he  welcomed,  as  allies, 
the  spies  who  afterwards  betrayed  the  bank  to  its  doom. 

The  representatives  of  the  Government  before  the  Ashbrook  Com- 
mittee testified  that  the  inspectors  who  conducted  the  investigation 
of  the  People's  Bank  were  among  the  most  competent  in  the  postal 
service.      The   methods   they   employed   were   said   to    be   in   strict 

385 


386  THE  SIEGE  OF  UNIVERSITY  CITY 

accordance  with  the  instructions  of  their  sujieriors  and  the  policies 
of  the  DeiDartment.  The  investigation  of  the  bank  may,  then,  be 
regarded  as  typical  of  tlie  attitude  of  the  Government  toward  the 
citizen,  as  exemplified  in  this  branch  of  the  public  service.  These 
facts  have  been  repeatedly  testified  to  by  the  inspectors.  There 
can  be  no  dispute  concerning  them.  A  summary  review  of  the  na- 
ture, manner  and  extent  of  this  investigation  will  clear  up  any  doubts 
tliere  ma}*-  be  in  the  reader's  mind  as  to  the  propriety  of  stigmatizing 
postoffice  inspectors  by  the  odious  name  of  spies. 

Stice  testified  that  there  were  on  file,  in  the  office  of  the  inspectors 
in  charge  in  St.  Louis,  four  jackets  on  as  many  different  cases 
touching  Lewis  and  his  affairs.  These  had  been  made  up  at  Wash- 
ington and  forwarded  to  St.  Louis  for  investigation.  Each  contained 
one  or  more  letters  of  complaint  against  one  or  other  of  the  Lewis 
enterprises.  Did  the  inspectors  send  for  Lewis  or  call  upon  him 
and  lay  before  him  frankly  the  contents  of  these  jackets?  Did  they 
ask  him  to  explain  the  facts  in  each  particular  case  ?  Did  they  show 
him,  for  example,  the  letter  of  Howard  Nichols  and  attempt  to 
ascertain  if  he  knew  of  any  reason  why  Nichols  should  turn  against 
him.''  Did  they  inquire  whether  or  not  Nichols  was  actually  in  a 
position  to  secure  the  information  which  he  claimed  to  have.''  Did 
they  ask  Lewis  if  the  statements  made  by  Nichols  were  true?  Did 
they  give  him  any  opportunity  whatever  to  rebut  those  statements? 
Did  they  take  into  account  the  nature  of  his  rebuttal  in  their  inves- 
tigation of  the  facts?  The  answer  to  all  of  these  questions  and 
many  similar  inquiries  that  suggest  themselves  is.  No !  For  it  is 
said  by  the  inspectors  themselves  to  be  one  of  their  fixed  policies 
never  to  reveal  to  the  accused  the  nature  of  the  charges  that  have 
been  made  against  him. 

Let  us  see  what  actually  took  place.  Stice  testified  that  the  first 
thing  he  and  Inspector  Sullivan  did,  after  the  four  cases  against 
the  Lewis  enterprises  were  turned  over  to  them  for  investigation, 
was  to  familiarize  themselves  somewhat  with  the  charges.  To  this 
end  they  read  and  studied  all  the  copies  of  the  Lewis  promotion 
literature  that  they  could  obtain.  They  occupied  in  this  way  the 
interval  from  February  7,  to  March  14,  1905.  The  avowed  purpose 
of  this  preliminary  study  was  to  enable  them  to  grasp  Lewis'  activi- 
ties in  their  entirety.  They  did  not  seek  to  investigate  each  indi- 
vidual complaint.  That  method,  in  the  case  of  the  letter  of  Howard 
Nichols,  would  have  resulted  in  their  learning  that  Nichols  simply 
did  not  know  wliat  he  was  talking  of.  They  proposed,  on  the  con- 
trary, a  comprehensive  inquiry,  embracing  no  less  than  the  totality 
of  the   Lewis  enterprises. 

A  number  of  questions  will  at  once  suggest  themselves  to  every 
practical  man  of  affairs.  Were  these  men  competent  to  conduct 
such  an  investigation  ?  No !  They  were,  as  we  have  seen,  men  of 
the  most  ordinary  intelligence.  Did  they  employ  expert  accountants 
or  otherwise  audit  the  books  of  account  of  the  various  enterprises? 


THE  DREYFUS  CASE  OF  AMERICA  387 

No !  They  did  not  deem  the  co-operation  of  such  experts  necessary. 
Did  they  conduct  formal  hearings,  and  require  the  testimony  given 
to  be  taken  down  by  an  official  stenographer?  No!  Their  con- 
versations were  informal;  and  they  depended  largely  upon  their 
recollection  of  tlie  verbal  testimony  given.  Did  they  conduct  a 
thorough  examination  of  the  books  of  account  and  check  up  the 
original  vouchers,  in  order  to  obtain  a  proper  comprehension  of  the 
subject  matter  in  each  case?  No!  They  contented  themselves  with 
the  inspection  of  particular  books  of  account,  and  from  particular 
accounts  and  items  which  they  deemed  suspicious  they  made  such 
memoranda  as  they  saw  fit.  Did  they  devote  to  the  entire  investi- 
gation an  amount  of  time  adequate  to  an  exact  knowledge  and 
thorough  comprehension  of  the  subject  matter  involved ?  No !  They 
were  present  in  person  on  the  premises  of  the  bank  not  to  exceed 
three  and  one-half  days,  or  twentj'^-odd  hours  all  told,  during  their 
investigation  of  a  two  and  one-half  million  dollar  institution.  How, 
then,  did  they  obtain  the  information  upon  which  their  report  was 
based  and  the  fraud  order  was  recommended?  Partly,  by  two  after- 
noons of  desultory  conversation  with  Lewis  and  certain  of  his  asso- 
ciates ;  partly,  by  the  examination  of  his  promotion  literature,  and 
partly  by  his  written  replies  to  lengthy  written  interrogatories.  In 
addition,  they  made  a  few  memoranda  from  the  daily  balance  book 
of  the  bank.  They  totaled  up  the  stock  subscription  books  kept  by 
Lewis  as  promoter.  And  they  caused  Lewis  and  his  associates  to 
draw  up  and  make  affidavit  to  three  or  four  brief  statements  as  to 
circumstances  which  they  deemed  to  be  suspicious,  for  the  manifest 
purpose  of  introducing  these  as  evidence  in  the  event  of  criminal 
prosecution. 

To  sum  up  briefly.  Inspectors  Fulton,  Stice  and  Sullivan  first 
presented  themselves  at  Lewis'  office  on  the  afternoon  of  INIarch  14<, 
1905.  Lewis  placed  himself  wholly  at  their  disposal.  He  reminded 
them  that  he  had  courted  investigation  and  stated  his  gratification 
that  an  inquiry  was  being  made.  He  described  in  great  detail  the 
history  and  the  present  status  of  all  his  enterprises.  He  announced 
his  willingness  to  furnish  all  information,  whether  verbally  or  in 
writing,  that  might  be  required.  He  told  the  inspectors  that  the 
whole  institution  was  open  to  them  from  top  to  bottom.  He  observed 
1)0  precaution,  called  no  witnesses,  took  no  stenographic  record  of 
the  proceedings.  He  supposed  that  he  was,  in  effect,  talking  to 
the  President  of  the  United  States,  and  relied  absolutely  as  a  loyal 
citizen  upon  the  good  faith  of  the  inspectors  as  representatives  of 
the  Administration. 

An  agreement  was  reached  at  this  interview  that  Lewis  should 
furnish  files  of  his  publications  and  other  promotion  literature  and 
should  answer  in  writing  a  series  of  interrogatories.  The  next  three 
weeks  were  occupied  by  these  matters.  The  inspectors  came  back 
on  the  afternoon  of  April  8.  Once  more  an  entire  afternoon  was 
consumed  by  a  desultory  cross-examination  ranging  over  all  of  Lewis' 


388  THE  SIEGE  OF  UNIVERSITY  CITY 

enterprises.  An  agreement  was  reached  during  this  interview  in 
pursuance  of  wliich  the  inspectors  returned  on  April  10  and  11,  with 
a  number  of  clerks  from  the  St.  Eouis  postoffice,  and  totaled  up  on 
adding  machines  the  subscriptions  to  the  People's  Bank  shown  in 
Lewis'  books  as  promoter.  Some  days  afterwards  they  came  back 
and  asked  for  the  vouchers  showing  the  return  by  Lewis  of  certain 
sums  of  money  to  persons  whose  subcriptions  had  been  cancelled. 
He  then  told  them  that  they  had  "gone  the  limit."  Such,  in  brief 
outline,  is  the  story  of  the  entire  investigation. 

What  was  tlie  purpose  of  the  inspectors'  inquiries.''  What  cir- 
cumstances aroused  their  suspicions.''  What  were  the  issues  subse- 
quently joined.''  The  following  brief  analysis  purports  to  furnish 
answers  to  these  questions : 

The  attitude  taken  by  Lewis  toward  the  inspectors*  investigation 
is  one  of  the  subjects  as  to  wliich  there  is  no  disagreement.  The 
inspectors  testify  that  the  first  two  interviews  of  March  14  and 
April  8,  each  consuming  an  entire  afternoon,  were  most  cordial. 
In  the  interval  Lewis  cheerfully  furnished  all  the  information  they 
required.  Lewis'  personal  counter  books,  containing  the  list  of 
subscriptions  to  the  bank  stock,  were  freely  turned  over  to  post- 
office  clerks  who  came  out  to  run  up  the  totals  on  adding  machines 
on  April  10  and  11.  But,  subsequently,  when  Inspector  W.  T. 
Sullivan  called  to  verify  the  sums  shown  by  those  books  to  have 
been  returned  to  subscribers,  Lewis  refused  to  give  him  further 
access  to  his  books.    Following  is  an  extract  from  Fulton's  testimony: 

The  purport  of  the  interview  on  March  14  was  a  statement  to  Mr.  Lewis 
that  we  called  to  investigate  the  bank.  He  said  that  he  had  made  a  re- 
quest to  the  postmaster-general  for  an  investigation  and  was  willing  and  de- 
sirous that  it  be  made.  Some  rumors  and  charges  had  been  made  in  the 
public  prints  and  on  the  streets  by  a  former  associate  with  whom  he  had 
had  trouble.  This  man  claimed  that  Lewis  had  been  fraudulently  engaged 
and  had  been  insolvent  with  several  different  schemes  with  which  the  two 
were  connected.  Also  that  he  had  been  indicted  in  the  state  court  when 
Governor  Folk  was  circuit  attorney,  for  conducting  a  lottery  in  connec- 
tion with  the  World's  Fair  Contest  Company.  These  rumors,  he  said, 
were  causing  the  bank  to  be  discredited.  Some  stockholders  were  with- 
drawing their  deposits.  He  was  anxious  to  have  an  investigation,  so  that 
he  could  be  vindicated  from  those  charges.  We  went  into  those  charges 
with  him  in  detail. 

Following  is  an  extract  from  the  testimony  of  Mr.  Stice: 
Our  first  interview  there,  the  14th  of  March,  was  rather  a  preliminary 
discussion  about  what  his  disposition  was,  and  what  the  purpose  of  our  in- 
vestigation was.  Certain  arrangements  were  made  verbally.  Certain  things 
we  would  want  he  agreed  to  furnish.  Other  information  he  agreed  to  sub- 
mit in  writing.  Before  our  next  visit  we  submitted  a  lot  of  questions  asking 
for  information.  This  he  furnished.  Then  we  returned  on  April  8,  to  verify 
some  of  the  information  he  had  given  us  in  writing.  We  were  there  over 
half  a  day.  No  obstacle  was  thrown  in  our  way.  Everything  was  lovely. 
We  next  went  out  on  April  10  and  11  to  get  the  total  from  these  fifty- four 
subscription  books.  I  don't  recall  any  obstacle  then.  We  took  up  the  ques- 
tion of  the  cancellation  of  subscriptions.  Where  there  was  a  line  drawn 
through  the  subscriber's  name  on  Lewis'  subscription  book,  he  said  it  meant 


THE  DREYFUS  CASE  OF  AMERICA  389 

that  the  subscriber's  money  had  been  paid  back.  The  total,  according  to 
tlie  book,  was  $i^04,993.(i5.  But  he  afterwards  refused  to  furnish  us  the 
papers  which  would  establish  the  return  of  these  cancellations.  Two  or 
three  requests  failed  to  get  that  information.  He  first  said  that  he  would 
furnish  it  at  a  certain  time,  but  never  did. 

Col.  Sullivan  went  out  there  and  I  went  out  there,  and  the  statement 
he  made  to  us  was,  "You  postoffice  inspectors  have  gone  the  limit.  You 
can't  get  any  more  information  here."  The  next  time  I  went  out  there  on 
the  bank  matter  was  the  first  part  of  July,  on  instructions  of  the  Depart- 
ment, to  examine  the  salary  vouchers  that  were  represented  in  the  promo- 
tion of  the  bank.     The  information  that  we  asked  for  then  was  given. 

lewis'   subscription    to    capital   6TOCK. 

The  nature  and  amount  of  Lewis'  subscriptions  to  the  capital  stock 
of  the  bank,  the  question  as  to  whether  he  paid  for  any  of  the  stock 
with  his  own  money,  and  the  circumstances  surrounding  the  issuance 
of  stock  certificates  in  his  name,  are  subjects  of  considerable  con- 
troversy.   The  facts  of  record  are  as  follows: 

The  first  subscription  by  Lewis  shown  by  the  articles  of  incor- 
poration of  the  bank  was  for  9,915  shares.  The  balance  of  eighty- 
five  shares  was  subscribed  in  lots  of  five  shares  each  by  the  other 
seventeen  incorporators.  Lewis  drew  a  check  for  $495,750  in  half 
payment  for  this  stock,  upon  his  personal  account.  This  account 
then  contained  both  funds  remitted  to  him  by  subscribers,  as  their 
agent  in  the  organization  of  the  bank,  and  funds  belonging  to  him 
personally.  The  inspectors  state  that  when  Lewis  was  asked  by 
them  on  March  14  if  he  had  subscribed  and  paid  for  the  stock 
which  was  then  standing  in  his  name,  he  said  he  had.  On  the  8th 
of  April  he  corroborated  that  statement  under  oath. 

What  amount  of  stock  was  subscribed  for  by  you  in  the  original  corpora- 
tion, and  how  much  was  paid  on  it  up  to  the  close  of  business,  March  14, 
1905?  Ans.  Nine  thousand  nine  hundred  and  fifteen  shares  were  sub- 
scribed for  br  me  and  $495,750  paid  on  it  by  me. 

Same  question  as  to  the  increased  capital  stock?  Ans.  Fourteen  thou- 
sand nine  hundred  and  ninety-nine  shares  were  subscribed  for  by  me, 
fully  paid,  as  trustee  for  other  subscribers;  value,  one  hundred  dollars  each. 

How  much  stock  was  taken  by  subscribers,  other  than  yourself,  of  the 
original  stock,  and  how  much  was  paid  on  it  up  to  the  close  of  business, 
March  14,  1905?  Ans.  Eighty-five  shares,  at  one  hundred  dollars  each, 
half  paid. 

Same  as  to  increased  capital  stock?  Ans.  Ten  shares,  all  paid.  E.  G. 
Lewis.  Subscribed  and  sworn  to  before  me,  a  postoffice  inspector,  April  8, 
1905,  at  St.  Louis,  Mo.     R.  M.  Fulton,  Postoffice  Inspector-in-Charge. 

The  inspectors  then  state  that  Lewis'  testimony  at  the  hearing 
in  Washington  on  June  16  and  17,  1905,  was  that  his  original  sub- 
scription of  $495,750  at  the  incorporation  of  the  bank,  was  paid  for 
by  him  as  trustee  from  the  funds  of  other  subscribers.  The  testi- 
mony of  the  inspectors,  and  also  of  Assistant  Attorney-General 
Goodwin  and  his  assistant,  Lawrence,  to  this  effect,  was  introduced 
in  evidence  at  Lewis*  trials.  The  fact  appears  to  be  that  the  truth 
lies  between  the  two  statements,  or  rather  that  both  statements  are 
true  with  qualifications  and  explanations  -which  Lewis  apparently 
did  not  deem  it  necessary  to  give  to  the  inspectors,  but  which  he 


390  THE  SIEGE  OF  UNIVERSITY  CITY 

entered  into  detail  under  examination  by  the  State  banking  de- 
partment on  April  13,  five  days  later.  In  the  above  affidavit  Lewis 
did  not  state  that  the  shares  subscribed  for  by  him  in  the  original 
incorporation  were  his  own  shares,  or  that  the  money  paid  on  those 
shares  by  liim  was  his  own  money.  Nor,  on  the  other  hand,  did  he 
state  specifically  that  he  acted  as  agent  in  that  transaction,  although 
he  does  so  state  in  the  following  paragraph  as  to  his  subscription 
to  the  increased  capital  stock.  The  basis  of  the  inspectors'  criticism 
is,  therefore,  either  an  inference  as  to  Lewis'  meaning,  or  an  assump- 
tion that  he  ought  to  have  made  as  full  and  explicit  a  statement  to 
them  as  he  afterwards  did  make  to  the  secretary  of  state  and  to  the 
assistant  attorney-general  at  Washington. 

Secretary  of  State  Swanger,  as  liead  of  the  State  banking  depart- 
ment, and  Bank-Examiner  Nichols  interrogated  Lewis  on  April  13, 
1905,  and  the  result  of  that  examination  is  of  record.  The  sub- 
stance of  Lewis'  statement  as  to  his  subscription  at  the  incorporation 
of  the  bank  is  as  follows: 

The  nature  of  the  subscriptions  made  prior  to  the  incorporation  of  the 
btmk  on  November  14,  190-1,  was  in  effect  the  placing  in  my  hands  of  a  cer- 
tain sum  for  organizing  a  bank  or  trust  company  under  such  name  and  in 
such  manner  as  in  my  judgment  was  best.  I  was  practically  a  trustee  for 
the  subscriber  on  a  written  agreement  in  which  I  agreed  to  refund  the 
money  or  give  him  stock  in  a  bank  or  trust  company,  which  I  would  form. 
I  carried  the  money  in  my  personal  account  at  the  Missouri-Lincoln  Trust 
Company.  I  did  not  keep  these  funds  separate  from  my  personal  account, 
because  the  transaction  was  between  myself  and  the  subscriber.  He  could 
call  on  me  for  his  money  at  any  time  and  many  subscribers  did  so.  My  rela- 
tion with  the  subscribers  was  purely  one  of  personal  contract. 

The  subscription  as  incorporator  was  mine.  I  was  a  bona  fide  sub- 
scriber. I  regarded  myself  as  an  organizer  of  a  bank  with  a  planned  ob- 
ject in  view  between  myself  and  my  associates.  They  had  confidence  in  my 
ability.  I  subscribed  for  all  but  eighty-five  of  the  shares  and  paid  in 
$495,750.  I  paid  this  only  partially  out  of  the  subscriptions  received  from 
subscribers.  A  part  was  my  money;  the  rest  that  of  the  subscribers.  That 
will  be  shown  by  the  record  showing  the  amounts  received  before  Novem- 
ber 14.  We  did  not  apply  all  of  the  funds  received  to  the  payment  for  this 
stock.  Some  of  it  was  carried  over  to  a  special  account.  We  did  not 
want  to  overpay  the  half.    We  carried  the  rest  on  certificates  of  deposit. 

A  large  part  of  the  subscriptions  received  was  advanced  liy  me.  It  came 
out  of  mr  account.  Suppose  a  man  bought  one  hundred  dollars'  worth 
of  the  stock  but  paid  only  sixty  dollars.  I  would  pay  the  forty  dollars  and 
hold  his  receipt  as  collateral.  I  should  say  that  altogether  my  loans  on  ac- 
count of  subscriptions  and  advances  for  demand  subscriptions  would 
amount  to  about  one-third  of  my  original  subscription.  I  borrowed  the 
money  from  private  parties  and  banks.  These  figures  are  approximate. 
The  remaining  two-tliirds  of  my  original  subscription  was  held  for  the  sub- 
scribers in  trust,  the  funds  of  the  subscribers  and  myself  l)eing  kept  to- 
gether. There  is  no  means  of  knowing  exactly  how  much  of  my  own  money 
was  used.  We  carried  over  to  a  special  account  two  hundred  thousand  dol- 
laws,  and  I  cannot  now  say  how  much  was  my  money  and  how  much  was 
the  subscribers'. 

THE   STOCK    IN   LEWIS*  NAME. 

Tlie  propriety  of  Lewis'  conduct  in  causing  certain  certificates  of 
stock  to  be  issued  to  himself  is  also  a  matter  of  controversy.     Exami- 


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THE  DREYFUS  CASE  OF  AMERICA  39S 

nation  of  the  stock  certificate  book  of  the  bank  shows  thav,  certificate 
No.  1  was  made  out  in  the  name  of  E.  G.  Lewis  for  915  shares. 
This  was  an  oversight  or  clerical  error.  These  915  shares  (or 
eighty-five  shares  less  than  1^000),  at  the  par  value  of  one  hundred 
dollars,  would  have  made  the  capital  stock  of  the  bank  only  one 
hundred  thousand  dollars  instead  of  one  million  dollars.  The 
correct  number  should  have  been  9.915  shares.  Bank-Examiners 
Cook  and  Nichols  detected  this  error  on  their  first  visit  on  April  6 
and  called  it  to  Lewis'  attention.  Nichols'  statement  on  this  matter 
at  Lewis'  first  trial  is  in  substance  as  follows: 

I  tried  to  ascertain  from  Mr.  Lewis,  himself,  what  stock  was  issued  to 
him  personally.  I  found  that  he  held  all  but  eighty-five  shares  of  the  origi- 
nal capital  stock.  I  asked  him  if  he  subscribed  for  all  that  stock  for  him- 
self or  as  trustee  for  outside  stockholders.  He  said  he  was  trustee.  I  then 
suggested  to  him  that  he  should  issue  these  certificate  in  his  name  as  trus- 
tee. He  replied,  "I  shall  have  to  have  two  shares  in  my  name  to  qualify 
as  a  director."  He  then  canceled  the  first  certificate  and  drew  another  for 
himself  for  two  shares  and  another  as  trustee  for  9,913,  as  I  recall  it. 

This  statement  is  confirmed  by  the  testimony  of  Bank-Examiner 
Cook.  On  this  head,  the  inspectors  submit  the  following  affidavit, 
taken  on  the  occasion  of  their  second  visit: 

The  first  certificate  was  issued  to  me  for  nine  hundred  and  fifteen  shares, 
a  clerical  error,  and  should  have  been  for  9,915  shares,  and  on  which  I  paid 
g>495,750. 

The  next  seventeen  certificates,  for  eighty-five  shares  all  told,  were  is- 
sued to  subscribers  outside  of  the  original  incorporators.  From  that  num- 
ber to  No.  4,381  have  been  issued  to  date,  April  8,  1905. 

Certificate  No.  1  is  half-paid  stock.  It  was  marked  "canceled"  through 
error  and  then  marked  "half-paid"  under  the  instructions  of  the  bank-ex- 
aminers. Then  the  certificate  which  should  have  been  canceled  in  the  first 
place.  No.  19,  was  canceled  in  the  place  of  certificate  No.  1,  under  the  in- 
structions of  the  bank-examiners.  Certificate  No.  1  should  not  be  marked 
"canceled"  but  shoidd  be  "half-paid."  This  was  an  error  in  the  instruc- 
tions of  the  bank-examiners  at  the  time  the  writing  was  put  on  the  first 
certificate. 

When  the  balance  of  the  original  incorporation  of  a  million  dollars  is 
paid  up,  then  certificate  No.  1  will  be  canceled  and  certificates  issued  for 
the  full  amount  paid  in  its  place.  The  pro  rata  of  this  would  be  a  certificate 
for  $495,750  being  issued  to  me  personally,  unless  for  some  reason  I  had 
sold  part  of  it  to  some  one  else. 

As  the  subscriptions  are  paid  in,  the  original  capital  stock  of  a  million 
becomes  full-paid  and  will  be  issued  full-paid.  For  instance,  if  $100,000 
came  in  today  and  was  applied  on  the  original  incorporation  of  a  million 
dollars,  one-half  of  which  has  already  been  paid,  this  would  enable  us  to  at 
once  issue  $300,000  of  full-paid  stock  of  the  original:  $100,000  of  it  would 
go  to  me  personally,  full-paid,  I  having  already  paid  in  the  first  half  of 
the  original  capital;  the  other  $100,000  would  go  to  the  other  subscribers 
outside  of  the  original  incorporators.  E.  G.  Lewis.  Subscribed  and  sworn 
to  before  me,  a  postoffice  inspector,  April  8,  1905,  at  St.  Louis,  Mo.  R.  M. 
Fulton,  Postoffice  Inspector-in-Charge. 

Returning  to  the  record  of  Lewis'  examination  by  Swanger  of 
April  13,  above  cited,  his  explanation  as  to  the  issuance  of  the  stock 
is  in  substance  as  follows: 

The  first  eighteen  shares  of  stock  were  issued  to  the  original  incorpora- 


394  THE  SIEGE  OF  UNIVERSITY  CITY 

tors.  I  issued  the  first  certificate  in  ray  own  name  for  nine  hundred  and 
fifteen  shares  as  full-paid,  and  canceled  one-half  of  it,  because  it  was  in- 
tended to  be  issued  full-paid.  My  intention  was  to  issue  half  to  myself 
and  the  other  half  to  subscribers.  I  expected  to  pay  on  this  original  stock 
up  to  half  a  million  dollars  in  addition  to  what  I  had  paid  in. 

I  could  not  determine  what  particular  subscribers  would  get  the  other 
half  of  the  stock  until  we  were  ready  to  issue  it.  That  was  left  to  my 
discretion.  That  was  the  agreement  when  they  sent  in  the  money.  They  did 
not  know  whether  they  would  get  the  stock  or  get  the  money  back.  I  re- 
served the  right  to  refuse  subscriptions.  For  instance,  I  received  a  ten 
thousand  dollar  subscription  from  AVoodworth,  La.  A  man  sent  in  a  list 
of  twenty  names  for  five  hundred  dollars  each.  I  found  that  nineteen  of 
these  names  were  fictitious.  I  then  refused  his  entire  subscription  and 
sent  back  his  money.  My  object  from  the  start  was  to  prevent  any  one 
person  from  securing  over  five  hundred  dollars'  worth  of  stock.  I  intended 
to  issue  the  stock  to  those  who,  in  my  judgment,  were  entitled  to  it.  I 
stated  explicitly  what  I  intended  to  do.  I  said  that  if  it  was  in  my  means 
I  would  subscribe  to  one-half  of  the  stock  and,  besides  myself,  no  man  on 
earth  would  be  allowed  over  five  hundred  dollars'  worth  of  the  stock,  and 
that  my  stock  would  be  placed  in  the  hands  of  a  trustee  so  that  if  I  should 
die  it  would  serve  as  a  protection  to  the  small  stockholders.  I  am  carrying 
out  the  trust  as  rapidly  as  I  can,  and  that  is  one  of  the  matters  I  want  to 
take  up  with  the  banking  department.  I  do  not  claim  to  hold  all  of  the 
stock  represented  by  the  original  certificate  personally.  My  purpose  in  is- 
suing it  to  myself  was  to  facilitate  the  organization  of  the  bank.  There  was 
no  other  practicable  way  to  do  it.  My  public  announcement  to  these  peo- 
ple was  that  this  was  what  would  be  done. 

The  controversy  between  the  inspectors  and  Lewis  is  here  due  to 
the  difference  between  their  respective  viewpoints.  The  inspectors 
evidently  regarded  the  organization  of  the  bank  as  having  been 
completed.  They,  therefore,  considered  that  its  existing  status  was 
conclusive  as  to  Lewis'  actual  intent.  The  existence  of  a  certificate 
of  stock  in  his  name,  which  had  been  paid  for  wholly  or  in  part  with 
the  funds  of  otlier  subscribers,  was  construed  by  them  as  proof  of 
fraudulent  intent.  Lewis'  entire  testimony  shows  that  he  looked 
upon  the  existing  status  as  a  purely  temporary  stage  in  the  forma- 
tion of  the  bank  with  five  million  dollars  of  capital,  of  which  he 
proposed  to  subscribe  for  and  pay,  personally,  one  million  dollars, 
if  he  could.  The  problem  was  complex.  He  was  inexperienced  in 
the  minutifB  of  banking.  There  was  no  material  difference  in  his 
opinion  as  to  the  method  in  which  the  stock  was  issued,  provided 
every  subscriber  received  the  full  amount  of  his  subscription  in  the 
stock  of  the  bank  at  par  before  the  full  capitalization  of  five  million 
dollars  was  issued,  or  got  his  money  back  in  cash.  The  reservation 
of  half  of  the  original  capitalization  for  liimself  by  the  device  of 
paying  in  only  half  of  the  original  capital  stock,  was  in  accordance 
with  his  undertaking  to  pay  dollar  for  dollar  up  to  the  limit  of  his 
private  fortune,  upon  which  so  much  insistence  has  been  placed. 
According  to  the  laws  of  the  State  of  Missouri,  the  other  half  of 
the  capital  could  have  been  paid  up  by  him  at  any  time  within  one 
year.  The  evidence  shows  that  he  was  taking  steps  to  realize  upon 
his  various  assets,  and  that  he  could  easily  have  raised  that  amount 
in  time  to  complete  this  subscription  within  the  period  allowed  by 


THE  DREYFUS  CASE  OF  AMERICA  395 

law.  The  testimony  of  the  bank-examiners  is  conclusive  as  to  Lewis' 
willingness  to  comply  with  their  suggestions  toucliing  the  manner  in 
which  the  stock  certificates  should  be  made  out.  They  both  state 
their  instructions  in  this  regard  were  immediately  carried  into  effect. 

The  testimony  of  Goodwin,  Lawrence  and  the  inspectors  present 
at  the  hearing  in  Washington,  is  relied  upon  by  the  inspectors  as  a 
flat  denial  of  the  above  affidavits  furnished  them  by  Lewis.  The 
true  effect  of  that  testimony  is,  however,  merely  to  put  into  juxta- 
position two  apparently  contradictory  statements,  without  the  quali- 
fication and  explanation  by  which  they  were  accompanied  when 
uttered.  No  transcript  of  the  hearing  at  Washington  is  of  record, 
and  Lewis'  full  statement  at  that  time  is  not,  therefore,  available. 
The  testimony  of  the  Government  witnesses  on  this  point  is  wholly 
ex  parte  and  shows  upon  its  face  that  efforts  had  been  made  to 
refresh  the  memory  of  the  witnesses  as  to  facts  relied  upon  to  secure 
conviction,  in  strong  contrast  with  absence  of  any  recollection  of 
circumstances  favorable  to  the  defendant.  Lewis  may  be  open  to 
criticism,  from  the  inspectors'  standpoint,  for  not  having  furnished 
them  as  exhaustive  an  explanation  of  his  plans  and  purposes  as  he 
afterwards  furnished  the  secretary  of  state.  Possibly  their  conclu- 
sion that  the  certificates  of  stock  standing  in  Lewis'  name  were 
evidence  of  fraudulent  intent,  may  have  been  a  logical  inference 
from  the  information  then  in  their  possession.  Such  inference,  how- 
ever, would  be  removed  from  any  candid  mind  by  an  analysis  of 
Lewis'  statements  to  the  secretary  of  state,  above  cited,  and  by  his 
willingness  to  comply  with  the  instructions  of  the  bank-examiners. 
The  inspectors  and  bank-examiners  were  in  frequent  consultation, 
and  the  presumption  is  conclusive  that  all  these  facts  must  have  been 
in  the  inspectors'  possession  at  the  time  they  submitted  their  adverse 
report  and  recommendation  of  a  fraud  order.  This  is  the  conclu- 
sion of  Inspector  Stice: 

The  record  of  stock  subscriptions  shows  that  Mr.  Lewis  was  not  a  bona 
fide  subscriber  to  the  stock  of  the  bank  at  its  incorporation.  Neither  was 
he  a  bona  fide  subscriber  up  to  March  14,  1905,  nor  did  the  records  show 
that  he  ever  paid  in  any  of  his  private  funds  for  stock,  notwithstanding, 
nearly  all  the  stock  had  been  issued  to  him  personally  at  the  time  of  incor- 
poration.   Yet  he  represented  that  he  was  investing  dollar  for  dollar. 

Stice  was  corrected  at  this  point  by  Congressman  McCoy,  and 
accordingly  modified  his  last  statement  to  say  that  he  was  repre- 
senting that  "he  would"  take  dollar  for  dollar.  The  above  is  a 
comprehensive  review  of  the  evidence  pro  and  con  as  to  this  matter. 
The  reader  may  draw  his  own  deductions. 

There  is  no  material  controversy  as  to  the  certificates  issued  for 
the  increased  capital  stock,  to  which  Lewis  subscribed  as  trustee 
for  other  stockholders  to  the  amount  of  14,490  shares,  and  his  asso- 
ciates, F.  J.  Cabot  and  E.  W.  Thompson,  to  the  amount  of  five 
shares  each.  The  latter  subscriptions  were  made  to  comply  with 
the  provisions  of  the  law,  which  require  the  names  of  at  least  three 
persons  as  incorporators. 


396  THE  SIEGE  OF  UNIVERSITY  CITY 

stockholders'  proxies. 

The  propriety  of  requests  by  Lewis  for  proxies  from  out-of-town 
stockholders  is  called  in  question  upon  the  ground  of  his  represen- 
tation that  no  group  of  men  could  ever  get  control  of  the  bank, 
whereas  the  proxies  would  place  the  full  control  in  the  hands  of 
Lewis  and  his  associates.  The  testimony  of  the  inspectors  is  to  the 
effect  that  a  proxy  was  required  of  every  subscriber  before  Lewis 
would  consent  to  issue  a  certificate  of  stock.  Stice  testified  at  Lewis' 
second  trial  that  on  the  inspectors'  second  visit,  Lewis  stated  that 
for  every  share  of  stock  which  had  been  issued,  a  proxy  was  first 
requested,  and  that  between  three  and  four  thousand  proxies  had 
been  secured.  Fulton  testified  to  the  same  effect,  except  that,  accord- 
ing to  his  recollection,  -1,381  shares  had  been  issued  between  April  3 
and  8,  and  that  a  proxy  had  been  required  in  every  instance.  The 
inspectors,  however,  were  presumably  familiar  with  Lewis'  examina- 
tion by  Swanger,  five  days  later,  when  Lewis  testified  on  this  head  as 
follows : 

I  asked  the  stockholders  to  sign  a  proxy  if  it  was  not  objectionable  to 
them.  All  of  the  stockholders  have  not  sent  me  proxies.  I  should  say  that 
out  of  one  and  a  half  million  dollars,  six  or  seven  hundred  thousand  was 
represented  by  proxies.  Practically  every  person  who  subscribed  to  this 
stock  did  so  through  a  personal  acquaintance  with  me  or  through  implicit 
confidence  in  my  ability.  I  am  personally  held  strictly  responsible.  Failure 
would  mean  the  destruction  of  my  publishing  business.  I  felt  my  responsi- 
bility to  them,  and  asked  them  to  allow  me  all  proxies  on  their  stock. 

I  would  divide  the  proxies  into  four  classes:  There  is  the  straight  proxy, 
in  which  no  alternation  was  made;  the  proxies  in  which  somebody  else's 
name  is  substituted  for  mine;  those,  in  which  the  time  limit  has  been 
stricken  out,  making  the  proxy  revokable  at  any  time;  and  others,  bearing 
various  alterations,  such  as  revocation  of  my  right  to  buy  the  stock  at  the 
market  price,  and  the  like.  The  subscribers  were  authorized  to  make  any 
modifications  in  the  form  of  proxy  that  they  saw  fit. 

None  of  these  qualifications  are  mentioned  in  the  testimony  of 
the  inspectors — a  most  significant  oversight. 


WAS  LEWIS   MILLIONAIRE   OR   PAUPER 


Lewis'  net  worth,  his  credit  and  that  of  his  various  concerns,  in 
short,  his  personal  standing  in  the  financial  world  as  of  January  1, 
1905,  prior  to  these  investigations,  are  very  important  subjects  of 
inquiry.  They  have  a  direct  bearing  upon  his  ability  to  pay  in 
cash  for  the  half  million  dollars'  worth  of  the  original  capital  stock 
held  in  reserve,  and  the  additional  subscription  he  proposed  to 
make  up  to  one  million  dollars.  These  questions  will  come  up  again, 
in  connection  with  the  proposed  bond  issue  and  other  steps  to  raise 
money  for  this  purpose,  which  he  asserts  were  frustrated  by  the 
attacks  afterwards  made  upon  him.  Much  testimony  as  to  these 
matters  was  introduced  at  his  two  trials,  especially  the  second. 
Still  more  Avas  adduced  before  the  Congressional  Committee.  No 
more  space  need  be  devoted  here  to  that  controversy. 

Grave  as  are  the  above  findings  of  the  inspectors,  they  may  be 
regarded  as  incidental  to  the  following  conclusions  which  are  evi- 


This  old  hen-house  was  converted  by  Lewis  into  a  pottery.  Hero  ha  acquired  the 
art  of  molding,  firing,  and  decorating  porcelains,  aided  solelv  by  Taxile  Boat's  master- 
piece 'Grand  Feu  Ceramics."  translated  by  Samuel  Robineau.  This  was  the  germ  of 
the  Art  Institute  of  the   American    Woman's  League 

^Lewis'  early  attempt  at  ceramics  ^Exterior  view  of  hen-house  pottery  ^Interior 
view 


THE  DREYFUS  CASE  OF  AMERICA  399 

dently  the   gravamen   of  the   inspectors'   charges.      They   are   thus 
summed  up  by  Inspector  Stice: 

THE  ALLEGED  SHORTAGE. 

On  March  14,  1905,  the  special  account  of  E.  G.  Lewis  in  the  bank  books 
failed  to  show  the  receipt  by  him  of  $196,375.63,  money  received  for  invest- 
ment for  stock  in  the  bank.  Consequently,  had  his  accounts  been  charged 
with  the  whole  amount  received,  according  to  his  own  personal  record,  he 
was  short  in  his  assets  that  amount  and  in  addition  there  remains  a  defi- 
ciency of  $75,571.06,  which  was  never  entered  in  the  bank  books  at  all,  a 
disappearance  of  $371,947.59.     *     *     * 

The  report  of  the  receiver  filed  with  the  county  court  as  of  August  16, 
1905,  shows  that  up  to  that  time  Mr.  Lewis  had  converted,  either  directly 
or  through  loans  to  the  use  of  himself,  his  officers  or  corporations  con- 
trolled by  them,  or  had  loaned  on  collateral  of  these  corporations  $1,039,- 
622.44,  practically  one-half  of  the  capital  stock. 

Concerning  the  alleged  shortage  of  $271,947.59,  Stice  indulges  in 
the  following  arraignment: 

I  want  to  say  to  the  committee  that  this  condition  was  brought  about 
by  Mr.  Lewis  at  a  time  when  he  had  a  free  hand,  untrammeled  by  the 
state  bank-examiners,  postoffice  inspectors,  officers  of  the  bank  or  any  other 
deterring  influence.  No  investigation  had  previously  been  made.  There 
was  no  attack  by  the  officers  of  the  Postoffice  Department  or  the  express 
companies  or  any  of  the  powerful  forces  that  he  characterizes  as  his  ene- 
mies. Everything  v/as  in  his  absolute  control.  Yet  he  did  not  and  could 
not  account  for  the  shortage.  I  ask,  in  the  face  of  the  evidence  then  before 
the  postoffice  inspectors,  how  could  any  honest  officer  of  the  Government, 
charged  with  the  duties  imposed  upon  him,  and  obligated  under  his  oath  of 
office,  do  other  than  recommend  that  the  officers  of  the  People's  United 
States  Bank  and  E.  G.  Lewis,  be  cited  to  show  cause  why  a  fraud  order 
should  not  be  issued. 

•  This  alleged  shortage  was  deducted  by  the  inspectors  from  the 
comparison  of  the  books  kept  by  Lewis  as  promoter,  described  by 
Inspector  Fulton  in  the  following  language,  with  the  daily  balance 
book  of  the  People's  Bank: 

We  then  called  for  the  liabilities  of  the  bank,  in  a  general  way;  in  other 
words,  what  contributions  there  had  been  to  the  bank.  Lewis  stated  it 
would  be  practically  an  impossibility  to  learn  that  without  calling  in  all 
of  his  preliminary  receipts  scattered  all  over  the  country.  Upon  further 
inquiry,  it  developed  that  he  had  kept  some  fifty  or  more  books  that  might 
be  called  counter-books.  They  were  square  pasteboard-covered  books,  about 
eight  inches  wide  and  ten  inches  long,  contained  possibly  one  hundred 
and  fifty  pages,  in  which  he  listed  the  persons  who  had  remitted  certain 
amounts  and  the  sums  remitted. 

Lines  were  drawn  through  some  of  those  items  indicating,  as  he  stated, 
the  return  of  some  of  those  contributions.  He  suggested  that  it  would 
be  an  enormous  task  to  ascertain  the  facts  from  these.  We  agreed  v.ith  him, 
but  told  him  it  was  necessary  to  undergo  that.  We  made  arrangements 
that  this  should  be  done  with  the  aid  of  clerks  and  adding  machines.  The 
result  was  that  the  contributions  shown  by  these  counter-books  indicate 
something  over  $271,947.59,  more,  as  of  March  14,  1905,  than  he  had  listed 
among  his  assets  or  evidences  of  assets  upon  the  books  of  the  People's 
Bank. 

These  charges  (of  which  we  shall  hear  much  in  what  follows) 
show  how  important  it  is  that  these  two  sets  of  books — Lewis'  sub- 


400  THE  SIEGE  OF  UNIVERSITY  CITY 

scription  books  as  promoter  and  the  books  of  the  bank  as  a  corporate 
entity — be  clearly  differentiated  from  one  another. 

THE    INCREASE    IN    CAPITAL    BTOCK. 

The  state  of  facts  in  question  had  to  do  with  a  coincidence  which 
presented  itself  in  a  very  different  light  to  the  inspectors  and  the 
officers  of  the  bank  respectively.  Fulton,  it  will  be  remembered, 
responding  to  Vickery's  demand  for  an  immediate  inquiry,  stated 
that  the  bank  would  not  be  fully  installed  until  March  4.  He,  there- 
fore, proposed  postponing  his  investigation  until  that  time.  Before 
the  Ashbrook  Committee  he  said: 

On  March  14,  1905,  the  capital  stock  was  to  be  increased  to  $2,500,000. 
To  facilitate  the  investigation  and  render  conditions  more  favorable  toward 
getting  at  the  exact  situation,  I  had  requested  the  chief  postofEce  inspector 
for  permission  to  defer  further  investigation  until  the  bank  had  placed 
itself  in  the  position  of  a  going  concern.  This  the  chief  inspector  acqui- 
esced in. 

Announcement  of  the  proposed  increase  of  capital  stock  to  take 
effect  March  17  had  been  publicly  advertised,  in  the  newspapers 
according  to  law,  for  sixty  days  preceding.  The  inspectors  had  full 
knowledge  when  it  would  take  place.  Fulton  designedly  appeared 
on  the  eve  of  this  transaction.  Yet,  the  inspectors  allege  that  the 
changes  on  the  books  of  the  bank  necessary  to  carry  the  increase 
into  effect  excited  their  suspicions  and  directed  their  particular  at- 
tention to  the  alleged  shortage  of  one  hundred  and  ninety-six  thou- 
sand dollars. 

The  facts  may  be  briefly  mentioned.  On  March  15,  two  days 
before  the  proposed  increase  was  voted,  all  the  available  funds  of 
the  bank  were  transferred  by  Lewis'  direction  to  the  E.  G.  Lcw^s 
Special  Account.  The  amount  so  transferred  lacked  precisely 
$196,375,63  of  the  amount  of  a  million  and  a  half  dollars  required. 
There  is  no  dispute  as  to  what  was  done  in  this  emergency.  The 
inspectors  and  Lewis  agree  that  two  notes  were  placed  among  the 
assets  of  the  bank  and  credited  to  the  E.  G.  Lewis  Special  Account, 
aggregating  the  sum  required  to  make  up  the  deficiency.  One  of 
these  two  notes,  for  the  amount  of  $146,375.64,  was  alleged  by  Lewis 
to  represent  the  promotion  expenses  of  the  bank.  The  other  was 
his  personal  note  for  $50,000.  The  addition  of  these  two  notes  to 
the  available  cash  assets  brought  this  account  up  to  the  sum  required 
for  the  increase  in  capitalization.  This  was  accordingly  paid  and 
went  into  effect  as  jDlanned. 

The  propriety  of  these  two  notes  has  been  bitterly  assailed  on 
several  grounds.  The  inspectors  allege  that  Lewis  had  represented 
that  he  would  himself  pay  the  promotion  expenses,  whereas,  in  fact, 
he  admitted  having  paid  them  to  the  amount  of  a  hundred  and  forty- 
six  thousand  dollars  from  the  subscribers'  funds.  They  challenge 
the  propriety  of  the  item  of  advertising  in  tlie  Lewis  publications 
of  some  fifty-two  thousand  dollars  as  a  wrongful  conversion  to  that 
concern  of  the  subscribers'  money.     They  allege  that  many  of  the 


THE  DREYFUS  CASE  OF  AMERICA  401 

items  covered  by  the  schedule  of  promotion  expenses  were  incurred 
after  the  organization  of  the  bank  and  were,  therefore,  properly 
chargeable  to  operation  rather  than  to  promotion.  They  base  a 
charge  of  perjury  against  Lewis  upon  the  ground  of  his  oath  to  the 
secretary  of  state  that  the  increase  had  been  jDaid  in  cash. 

THE  FIFTY  THOUSAND  DOLLAR  NOTE. 

As  to  the  fifty  thousand  dollar  note  to  Lewis  personally,  the  fact 
that  no  cash  was  passed  to  Lewis  when  his  note  was  accepted  by 
the  bank,  was  taken  as  evidence  that  he  had  previously  drawn  the 
money.  Lewis  was  criticised  for  borrowing  of  the  bank  at  all.  The 
security  which  he  oiTered  was  deemed  improper.  Both  these  items, 
in  fact,  have  been  exhaustively  scrutinized  and  criticised  from  every 
conceivable  viewpoint.  The  record  on  these  matters  is  far  too 
voluminous  to  be  quoted,  and  as  the  facts  as  to  what  took  place  are 
not  in  controversy,  further  comment  here  seems  unnecessary.  In- 
spector Stice  says: 

These  two  notes  were  subsequently  surrendered  by  the  board  of  directors 
to  Mr.  Lewis  without  payment,  and  the  money  previously  advanced  to  Mr. 
Lewis  never  came  back  to  the  bank  or  its  stockholders.  Yet,  Mr.  Lewis 
says  he  never  profited  a  penny  by  these  transactions.  What  did  he  do  with 
the  $50,000?  How  can  it  be  said  that  these  actions  were  overwhelming 
evidence  of  good  faith?  Mr.  Lewis  acted  in  a  fiduciary  capacity.  He  was 
a  trustee  under  certain  conditions  which  he  himself  prescribed.  I  charged 
in  1905  in  my  recommendation  to  the  Postoffice  Department  that  this  was 
a  wrongful  conversion  and  I  believed  that  it  was. 

The  reader  is  already  familiar  with  the  answer  to  Stice's  query. 
Lewis  did  not  withdraw  one  dollar  of  the  $50,000  in  question  from 
the  People's  Bank.  On  the  contrary,  he  afterwards  paid  that  sum 
in  cash  into  the  bank  from  funds  belonging  to  subscribers  which 
he  had  on  deposit  elsewhere.  Thereupon  his  note  was  taken  up 
and  canceled. 

THE  NOTE  FOR  ONE  HUNDRED  AND  FORTY-SIX  THOUSAND  DOLLARS. 

The  first  issue  raised  by  the  inspectors  as  to  the  directors'  note 
for  one  hundred  and  forty-six  thousand  dollars  is  to  the  effect  that 
in  his  representations  as  promoter  Lewis  agreed  to  pay  the  promo- 
tion expenses  of  the  bank  itself.  A  close  analysis,  however,  fails 
to  confirm  this  statement.  Lewis  stated  in  several  instances  that 
he  was  "carrj^ing"  the  promotion  expenses.  In  furtherance  of  this 
claim,  he  alleges  that  he  caused  the  advertising  of  the  bank  and 
other  expenses  incurred  by  the  Lewis  Publishing  Company  to  be 
charged  to  his  account  during  the  promotion  period.  He  also 
borrowed  from  various  banks  and  private  individuals  considerable 
sums,  which  he  drew  upon  in  course  of  the  bank's  organization.  No 
direct  quotation  is  made  from  any  of  his  literature  wherein  he  agrees 
definitely  to  pay  all  the  costs  of  promotion,  although  the  purpose 
of  the  directors'  note  was  to  make  Lewis  and  his  associates  respon- 
sible for  such  portion  of  that  amount  as  the  secretary  of  state  de- 
clined to  allow  as  a  legitimate  charge  against  the  bank.     Inspector 


402  I'HE  SIEGE  OF  UNIVERSITY  CITY 

Stice  on  this  point  made  this  statement,  which  is  corroborated  by 
the  testimony  of  Fulton,  Nichols  and  Goodwin: 

On  our  second  visit  the  question  of  promotion  expenses  came  up  in 
connection  with  the  hundred  and  forty-six  thousand  dollar  loan.  Mr.  Lewis 
said  that  money  had  been  previously  expended  and  that  he  did  not  expect 
to  pay  the  note.  The  matter  would  he  presented  to  the  secretary  of  state 
and  whatever  was  allowed  he  would  take  credit  for.  He  did  not  consider 
the  note  of  anj'  further  value  than  to  file  it  in  lace  of  the  money  which 
had  been  used  for  that  purpose. 

A  condensed  summary*  of  the  items  of  expense  charged  to  pro- 
motion was  furnished  by  Lewis  to  Inspector  Stice.  Lewis  after- 
wards furnished  to  the  bank-examiners  a  more  lengthy  memorandum, 
with  the  vouchers,  showing  total  disbursements  of  $286,919.38. 
From  this,  however,  he  crossed  off  items  totalling  $90,543.70,  leav- 
ing tlie  balance  of  $196,375.63  represented  by  the  directors'  note 
for  promotion  expenses.  Inspector  Stice  alleges  that  this  sum  of 
$90,5i3.70  was  not  accounted  for  at  all.  He  further  says  the  pro- 
motion expenses  continued  long  after  the  bank  was  chartered  and 
that  the  sum  of  $9,017.57  was  included  in  the  note  which  was  ex- 
pended after  the  note  was  made,  namely,  between  March  17,  1905, 
and  April  5,  1907.     He  says: 

The  ?90,54;3.70  should  also  have  been  charged  to  the  Lewis  Special  Ac- 
count on  the  bank's  records.  The  books  of  tlie  bank  showing  stock  subscrip- 
tions woidd  then  have  agreed  practically  with  the  memorandum  account 
kept  by  Mr.  Lewis.  The  shortage  in  the  bank  would  have  stood  on  March 
14,  1905,  at  a  sum  equal  to  this  amount,  plus  Lewis'  note  of  $50,000  and 
the  directors'  note  for  promotion  expenses  of  $146,375.70,  or  a  total  of  $386,- 
919.38.  Deducting  the  disbursements  made  after  March  14,  the  day  of  the 
note  (but  included  therein)  of  $9,017.57,  leaves  a  shortage  of  .$;377,901.81,  as 
against  the  total  shortage  found  by  us  of  $971,947.59.  Fully  half  the  items 
of  expense  charged  to  promotion  are  improper,  a  large  portion  being  items 
of  expense,  salary  and  operating  expenses  incurred  long  after  the  bank 
was  organized. 

On  the  occasion  of  our  visit  in  July,  Lewis  stated  that  the  sum  expended 
for  advertising  was  about  $63,000.  On  April  8,  he  stated  that  the  reading 
matter  which  ap]ieared  in  the  Woman's  Magazine  and  Woman's  Farm  Jour- 
nal was  a  part  of  that  expense.  He  submitted  a  written  statement  of  the 
number  of  lines,  rate  per  line,  and  amount  charged  in  the  Lewis  publica- 
tions. He  escorted  Messrs.  Fulton,  Sullivan  and  myself  downstairs  to  the 
first  floor  of  the  office  of  the  Lewis  Publishing  Company.  There  he  directed 
the  bookkeeper  to  prepare  this  and  give  it  to  us.  A  total  of  between  fifty- 
two  thousand  and  fifty-three  thousand  dollars  had  been  paid  the  Lewis 
Publishing  Company  for  advertising,  and  some  advertising  had  been  done 
outside. 

Lewis  was  unable  to  account  for  this  shortage  which  we  found  of  $271,- 
947.59,  except  on  the  theory  that  tiie  Postoflice  Department  compelled  him 
to  charge  $52,000  to  himself  and  pay  it  to  the  Lewis  Publishing  Company  for 
the  editorials  he  had  written  (to  l)e  taken  from  the  money  of  his  inves- 
tors for  alleged  promotion  expenses)  and  other  amounts  for  operating 
expenses  incurred  after  the  bank  was  organized.  On  this  point,  I  desire 
to  say  that  tlie  Postoffice  Department,  to  my  knowledge,  never  advised  Mr. 


*Tlie  summary  gives  the  following  figures:   Advertising,  $63,338.27;  Postage,  $53,- 
857.50;    Salaries,    $22,948.68;    Sundries,    stationery    and     printing,     $6,231.28;     Total, 


?146,375.73. 


THE  DREYFUS  CASE  OF  AMERICA  403 

Lewis  in  this  matter  about  charging  for  the  advertising  expenses.     No  ex- 
planation has  been  offered  by  him  as  to  the  balance. 

WAS    THERE    ANY    SHORTAGE.'' 

These  differences  of  opinion  appear  to  have  been  due  to  differ- 
ences of  viewpoint.  The  inspectors  regarded  the  organization  of 
the  bank  as  having  been  accomplished,  whereas  Lewis  considered 
the  existing  status  as  preliminary  to  a  five  million  dollar  incorpora- 
tion. The  inspectors  do  not  apj^ear  to  have  inquired  whether  there 
were  loans  by  the  bank  of  subscribers'  funds  outstanding;  or  other 
funds  in  Lewis'  possession  belonging  to  subscribers,  which  had  not 
yet  been  turned  over  to  the  bank.  Lewis'  theory  was  that  he  was 
acting  as  agent  for  the  subscribers  in  the  incorporation  of  the  bank 
and  was  personally  responsible  to  them  individually.  He  did  not 
consider  that  he  was  under  obligation  to  carry  the  total  subscriptions 
in  the  People's  United  States  Bank,  and  there  is  no  evidence  of 
record  to  the  effect  that  he  actually  did  so.  He  alleges  that  he  was 
responsible  for  the  total  sum  contributed  by  subscribers  and  kept  a 
careful  account  of  every  penny  of  actual  disbursements.  Both  the 
bank-examiners  and  the  inspectors  testify  that  they  never  had  an 
opportunity  to  verify  the  sums  refunded  by  Lewis  to  withdrawing 
subscribers  on  the  cancellations  of  their  subscriptions.  The  inspec- 
tors credit  Lewis  with  the  amount  of  $204,000,  but,  as  we  shall  see, 
the  sum  of  two  hundred  and  eighty-four  thousand  dollars  was  in 
fact  returned  to  subscribers  before  the  bank  passed  into  the  re- 
ceiver's hands.  The  difference  in  these  two  items  nearly  equals 
and  evidently  accounts  for  the  alleged  shortage. 

A  conclusive  answer  to  these  charges  is  found  in  the  fact  that 
every  subscriber  held  Lewis'  receipt  and  had  the  privilege  of  claim- 
ing from  the  receiver  his  pro  rata  in  the  liquidation  of  the  bank's 
funds.  Lewis'  original  stock  subscription  books  (the  counter-books 
alluded  to  by  Fulton),  upon  which  the  calculations  of  Stice  were 
based,  were  turned  over  to  the  receiver.  All  of  the  subscribers  were 
circularized  by  him  and  invited  to  submit  their  claims.  The  receiver, 
in  other  words,  took  cognizance  of  the  sum  total  of  Lewis'  collections 
from  the  public.  Every  individual  subscriber  had  his  option  of 
exchanging  his  claim  against  the  bank  for  cash,  for  the  preferred 
stock  of  the  Lewis  Publishing  Company  or  for  Lewis'  trustee  notes. 
The  sworn  statement  of  the  receiver  to  the  court  does  not  make 
mention  of  the  shortage  variously  alleged  by  the  inspectors  at  sums 
ranging  from  seventy-five  thousand  to  ninety  thousand  dollars.  The 
investigation  of  the  inspectors  was  admittedly  a  very  brief  and 
fragmentary  one.  The  books  of  the  bank  as  a  whole  were  never  in 
their  possession.  Their  visits  were  confined  to  portions  of  four 
days,  during  which  their  time  was  chiefly  occupied  in  discussion 
with  the  bank's  officials.  The  inspectors  are  evidently  mistaken. 
The  alleged  shortage  was  confined  to  their  own  memoranda.  It 
had  in  reality  no  other  existence. 

The  widespread  dragnet  thrown  over  the  United  States  by  the 


404  THE  SIEGE  OF  UNIVERSITY  CITY 

inspectors'  service  has  failed  to  disclose  a  single  complaining  sub- 
scriber who  did  not  get  Lewis'  receipt  for  his  money.  Everyone 
afterwards  got  stock  in  the  bank  for  the  full  amount  of  his  sub- 
scription, or  the  equivalent  in  his  pro  rata  of  cash,  or  Lewis  Pub- 
lishing Company  preferred  stock,  or  Lewis'  trustee  notes,  at  his 
option.  The  subscribers  know  of  no  shortage.  The  receiver  found 
none.  Nor  has  the  Government  been  able  to  establish  in  court  or 
otherwise  the  fact  that  any  shortage  actually  exists.  The  testimony 
on  this  head  is  limited  to  that  of  Inspectors  Stice  and  Sullivan. 
With  so  much  of  explanation  the  reader  must  draw  his  own  deduc- 
tions. 

OTHER    LOANS    OF    THE    BANK. 

There  remains  for  consideration,  finally,  the  inquiry  of  the  in- 
spectors into  the  loans  made  by  the  bank  to  Lewis  and  his  associates 
and  to  the  corporations  under  his  control.  Dismissing  the  two  notes 
already  mentioned,  there  remain  a  series  of  small  loans  in  sums  of 
from  one  to  ten  thousand  dollars  to  the  Lewis  Publishing  Company, 
amounting  in  all  to  about  sixty-six  thousand  dollars,  made  from  the 
subscribers*  funds  prior  to  the  incorporation  of  the  bank;  sundry 
small  loans  to  Lewis'  associates;  a  series  of  loans  to  the  University 
Heights  Realty  and  Development  Company,  aggregating  over  four 
hundred  thousand  dollars,  and  the  note  of  the  Lewis  Publishing 
Company  to  the  amount  of  three  hundred  and  seventy-five  thousand 
dollars — a  total  amount,  according  to  Stice,  of  $842,886.81,  exclu- 
sive of  the  two  notes  above  mentioned. 

The  facts  concerning  these  loans  are  not  only  of  record  on  the 
books  of  the  bank  and  the  minutes  of  its  board  of  directors.  They 
also  appear  in  the  report  of  the  State  bank-examiners  and  of  both 
receivers  to  the  court.  The  only  controversy  regarding  them  is  as 
to  the  propriety  of  loans  by  the  bank  to  Lewis  and  his  associates, 
and  as  to  the  nature  and  value  of  the  security  on  which  they  were 
made.  The  inspectors  challenge  the  right  of  Lewis  to  borrow  from 
the  bank  on  the  score  of  the  representation  made  in  his  promotion 
literature  that  neither  he  nor  any  director  would  become  a  borrower 
of  the  bank's  funds.  They  also  make  the  direct  charge  that  his 
loans  were  in  violation  of  the  State  banking  law.  The  report  of 
the  State  bank-examiners  at  close  of  business  April  1,  which  was 
available  to  the  inspectors,  thus  comments  upon  such  of  these  loans 
as  were  then  in  existence: 

The  notes  of  the  I^ewis  Publishing  Company  to  the  amount  of  eighty-eight 
thousand  dollars  bear  dates  of  April  9,  1904,  and  are  in  sums  of  from 
one  thousand  to  ten  thousand  dollars.  These  notes  are  payable  to  E.  G. 
Lewis  and  by  him  endorsed.  They  draw  interest  of  6  per  cent  from  date 
and  are  payable  on  demand.  Upon  inquiry  of  one  of  the  local  banks  as  to 
the  financial  condition  of  Mr.  Lewis,  I  was  informed  that  they  were  extend- 
ing him  a  line  of  credit  to  one  hundred  thousand  dollars.  The  report  of 
one  of  the  reliable  commercial  agencies  states  that  the  company  had  assets, 
over  and  above  all  liabilities,  of  five  hundred  thousand  dollars.  This  is 
exclusive  of  the  Woman's  Magazine  and  Woman's  Farm  journal  franchises. 


THE  DREYFUS  CASE  OF  AMERICA  405 

The  note  for  five  hundred  dollars  of  Sterling  Brothers  is  given  by  a  local 
firm  which  does  bank  printing.  The  note  will  be  taken  out  of  the  amount 
due  them  by  the  bank. 

The  note  of  $57,459,  given  by  the  University  Heights  Realty  and  Devel- 
opment Company  is  secured  by  warranty  deed  to  thirty-five  acres  of  land, 
situated  west  of  Pennsylvania  Avenue.  The  land  is  deeded  to  the  Peo- 
ple's United  States  Bank.  The  deed  is  not  recorded,  but  is  held  as  col- 
lateral to  secure  the  payment  of  this  note. 

The  note  of  two  thousand  dollars,  made  by  C.  W.  Clawson  and  Cal  Mc- 
Carthy, dated  January  18,  1905,  bears  interest  at  6  per  cent  from  date, 
and  is  secured  by  ten  thousand  shares  par  value  one  dollar  of  the  United 
States  Fibre  Stopper  Company.  I  have  been  unable  to  ascertain  the  value 
of  this  stock,  but  have  heard  that  it  has  been  sold  as  low  as  thirty-five 
cents  on  the  dollar.  Clawson  is  assistant  cashier  to  the  People's  United 
State  Bank.  The  note  of  Edmund  H.  Powers  for  two  thousand,  five  hun- 
dred dollars  is  secured  by  ten  thousand  shares  in  the  United  States  Fibre 
Stopper  Company. 

The  notes  appear  to  be  in  a  clean  condition.  The  average  rate  of  inter- 
est is  about  five  per  cent.  The  quality  and  value  of  collateral  securing  same 
is  doubtful  in  most  cases.  The  accommodations  seem  to  be  limited  to  E.  G. 
Lewis  and  his  associates  and  the  Lewis  Publishing  Company. 

Under  the  head  of  bonds,  stock,  etc.,  mention  is  made  of  the  addi- 
tional items  of  two  hundred  and  thirty  shares  of  the  par  value  of 
one  hundred  dollars,  six  per  cent  preferred  Lewis  Publishing  Com- 
pany stock,  held  by  the  bank  for  twenty-three  thousand  dollars; 
1,373  shares  at  par  value  of  ten  dollars  of  the  University  Heights 
Realty  and  Development  Company  six  per  cent  preferred  stock, 
held  at  thirteen  thousand  seven  hundred  and  thirty  dollars;  and 
twenty  income  bonds  of  the  par  value  of  three  hundred  and  fifty 
dollars  of  the  California  Vineyards  Company  at  seven  thousand 
dollars.  On  these  the  bank-examiners  state  they  had  been  unable 
to  get  quotations.  The  security  for  the  additional  loans  to  Lewis 
and  his  associated  enterprises,  subsequent  to  the  investigations  of 
the  inspectors  and  bank-examiners,  will  appear  in  their  place. 

DISCOUNTS    OF    COMMERCIAL    PAPER. 

The  first  of  the  above  items,  namely,  the  notes  of  the  Lewis 
Publishing  Company  to  the  amount  of  eighty-eight  thousand  dollars, 
represent  a  class  of  transactions  which  began  almost  as  soon  as 
Lewis  commenced  to  receive  money  on  his  mail  bank  project,  long 
before  its  charter  was  taken  out.  These  consist  of  discounts  of 
commercial  paper  received  by  the  Lewis  Publishing  Company,  chiefly 
in  payment  for  its  advertising  space.  The  makers  of  these  notes 
were  for  the  most  part  the  responsible  business  houses  advertising 
in  the  Woman's  Magazine,  or  the  great  advertising  agencies  that 
patronized  its  columns.  They  mostly  bore  not  only  the  endorsement 
of  the  Lewis  Publishing  Company,  but  of  Lewis  individually.  They 
could  have  been  discounted  at  any  bank  in  St.  Louis.  The  St.  Louis 
banks  had  already  handled  many  hundred  thousand  dollars'  worth 
of  commercial  paper  similarly  endorsed. 

The  sole  reason  that  Lewis  discounted  these  notes  with  the  funds 
of  the  subscribers,  both  before  the  bank  was  chartered  and  later 


406  THE  SIEGE  OF  UNIVERSITY  CITY 

with  the  People's  Bank  itself,  was  to  give  the  subscribers  the  profits 
that  would  otherwise  have  been  earned  by  the  St.  Louis  banks.  All 
the  profits  thus  earned  before  the  bank  was  chartered  were  credited 
to  the  subscribers.  Later,  the  discounts  on  these  notes  went  to  swell 
the  earnings  of  the  People's  Bank.  No  candid  business  man  would 
for  a  moment  think  of  criticising  such  transactions. 

Both  the  loans  to  E.  G.  Lewis,  of  fifty  thousand  dollars  and  of 
five  thousand  dollars  respectively,  were,  as  we  have  seen,  paid  up 
in  full.  The  directors'  note  for  the  promotion  expense  was  can- 
celed by  the  reorganized  directorate.  The  sequel  will  show  the 
litigation  that  followed.  The  minor  loans  above  mentioned  were 
paid  in  due  course.  There  remain  only  the  two  large  loans  of  about 
four  hundred  thousand  dollars  each  to  the  University  Heights  and 
the  Lewis  Publishing  companies,  the  facts  as  to  which  are  stated 
elsewhere  in  tliis  volume. 

THE   LOANS   TO   LEWIS    CORPORATIONS. 

The  bank-examiners'  comment  tliat  the  bank's  accommodations 
seemed  to  be  limited  to  E.  G.  Lewis  and  his  associates  and  the  Lewis 
Publishing  Company.  This  state  of  aflTairs  was  the  basis  of  the 
inspectors'  criticism.  Viewing  the  bank  as  a  going  concern,  they 
took  the  existing  status  as  evidence  of  Lewis'  ultimate  intent,  and 
argued  that  if  he  remained  in  undisputed  control,  its  affairs  were 
likely  to  go  on  from  bad  to  worse.  Lewis  replies  in  effect  that  the 
permanent  directorate  could  not  be  organized  until  the  full  capital 
stock  had  been  paid  in;  that  he  loaned  the  money  of  the  bank  to 
his  own  enterprises,  because  he  knew  the  condition  of  his  own  affairs 
and  was  willing  to  assume  individual  responsibility  for  them.  He 
further  argues  that  the  large  ioans  to  Hie  University  Hcdglits  and 
the  Lewis  Publishing  companies  were  made  necessary  by  the  attacks 
of  the  State  and  Federal  authorities.  Let  us  see  how  far  these  claims 
are  borne  out  by  the  evidence. 

A  number  of  the  most  prominent  bankers  in  St.  Louis  have  testi- 
fied that  Lewis  requested  them  ^.o  act  as  olllcers  and  directors  of  the 
People's  Bank;  that  he  wrote  a  letter  to  each  of  the  principal  banks 
in  St.  Louis  requesting  them  to  appoint  a  member  of  tlieir  directorate 
to  serve  upon  the  proposed  advisory  board,  and  that  he  offered  tlie 
presidency  of  the  People's  Bank  to  more  than  one  of  the  foremost 
bankers  in  St.  Louis.  The  attitude  toward  these  proposals  taken 
by  conservative  banking  men  was,  however,  that  they  would  prefer 
to  wait  until  the  total  capitalization  had  been  paid  in  and  tlie  final 
organization  effected.     This  delay  was  not  of  Lewis'  seeking. 

The  advice  of  a  permanent  directorate  and  of  the  proposed  ad- 
visory board  not  being  immediately  available,  Lewis  foimd  himself 
confronted  with  the  problem  of  investing  large  sums  of  money  for 
which  he  felt  he  was  personally  responsible.  He  was  not  a  banker, ' 
although,  as  he  aptly  puts  it,  he  already  had  a  good  deal  of  experi- 
ence in  banking  from  "the  outside  of  the  wicket."  Neither  he  nor 
the  People's  Bank,  however,  had  any  adequate  credit  system  as  a 


9.=  .^ 


^  "^J  ^o 


;:    8 


a  "^  ^  i» 


THE  DREYFUS  CASE  OF  AMERICA  409 

means  of  investigating  and  deciding  upon  proposed  investments. 
Lewis,  in  fact,  had  announced  his  intention  of  deferring  all  perma- 
nent loans  until  the  final  board  of  directors  and  the  members  of 
the  advisory  board  had  been  appointed.  Meantime,  as  a  business 
man,  he  found  himself  in  the  position  of  carrying  large  sums  on 
deposit  in  the  St.  Louis  banks  at  three  per  cent,  while  at  the  same 
time  he  was  borrowing  other  sums  from  the  same  banks  at  six  per 
cent  with  which  to  carry  on  his  enterprises.  The  obvious  course, 
to  his  mind,  from  the  standpoint  of  his  experience  as  a  business 
man  rather  than  as  a  conservative  banker,  was  to  withdraw  his  bank- 
ing business  from  these  other  institutions  and  give  his  own  bank 
the  benefit  of  the  interest  charges,  discounts  and  commissions  which 
he  was  paying. 

The  attack  of  the  ^Mirror,  followed  by  the  rumor  of  Federal  in- 
vestigation, which  as  we  have  seen  got  into  the  press  the  day  after 
the  inspectors'  first  visit  to  the  bank,  strengthened  this  line  of  rea- 
soning by  the  added  motive  of  self-protection.  His  credit  began  to 
be  impaired.  He  was  threatened  with  the  possibility  of  his  loans 
in  other  institutions  being  suddenly  called  in.  Hence,  the  large 
loans  to  the  Lewis  Publishing  Company  and  the  necessity  of  de- 
ferring the  bond  issue  of  $750,000,  which  caused  the  carrying  of 
the  loans  of  the  University  Heights  Company  longer  than  was  in- 
tended. 

The  day  after  his  hearing  before  Goodwin,  Lewis  appeared  before 
Third  Assistant  Madden.  At  this  time  he  touched  upon  the  subject 
of  these  loans  to  the  People's  Bank  as  follows: 

I  have  been  too  optimistic  at  times.  I  have  told  my  readers  what  I 
intended  to  do  almost  as  if  it  were  already  done.  The  suii  shines  all  around 
our  building  and  the  birds  are  chirping  all  the  time.  I  have  told  them 
about  the  People's  Bank.  I  have  helped  them  organize  that  bank  exactly 
as  I  said  that  I  would  do.  Then  came  the  rumor  that  I  was  going  to  be 
attacked  from  so  many  quarters,  that  when  the  sun  went  down  that  day  it 
would  see  the  last  of  me.     I  did  not  wait  imtil  they  got  there. 

I  am  a  heavy  borrower.  I  must  have  tens  of  thousands  of  dollars  to  carry 
on  these  great  enterprises  and  to  get  out  my  magazines  at  the  rate  they 
are  growing.  I  employ  nearly  a  thousand  persons,  all  told,  and  my  pay- 
roll is  very  large.  I  am  able  to  borrow  large  sums,  because  I  have  always 
paid  when  I  said  I  would  pay.  One  of  the  charges  against  me  is  that  I  have 
done  business  on  credit,  but  I  do  not  see  how  any  one  can  reason  that  credit 
is  a  discredit.  Where  did  I  get  that  credit?  I  was  not  born  with  it. 
My  notes  were  spread  around  in  the  banks  of  Chicago,  New  York,  and  St. 
Louis  to  the  amount  of  hundreds  of  thousands  of  dollars,  because  my  credit 
was  only  limited  by  what  I  would  borrow.  I  knew  if  those  men  who  were 
engineering  that  attack  caught  me  with  those  notes  outstanding,  largely  on 
demand,  neither  I  nor  any  other  institution  in  America  could  stand  the 
cyclone  for  a  single  hour. 

I  saw  them  coming.  I  knew  first  duty  was  to  the  people  in  the  bank 
and  to  the  people  who  take  my  magazines,  and  to  those  who  get  their  bread 
and  butter  from  my  enterprises.  I  got  my  notes  in  from  the  other  banks 
and  put  them  into  my  bank.  1  did  not  make  any  bones  about  that  at  all. 
It  was  done  legitimately  and  honestly,  with  the  full  knowledge  of  the  peo- 
ple interested.  They  never  complained.  The  stockholders  in  the  bank 
never  said  a  word.    My  readers  were  not  the  ones  that  found  fault.    The 


410  THE  SIEGE  OF  UNIVERSITY  CITY 

postoflBce    inspectors   in   their    secret   report   are   the   ones   that   made   the 
charges  against  that  institution. 

lewis'  own  version. 

In  addition,  Lewis  made  the  following  statement  at  the  Ashbrook 
Hearings: 

I  want  to  explain  the  circumstances  under  which  the  large  loans  were 
made  to  the  Lewis  Publishing  Company  and  the  University  Heights  Realty 
and  Development  Company,  which  have  been  so  severely  criticised.  My  per- 
sonal means  aside  from  my  banking  credit,  then  consisted  of  my  real  es- 
tate holdings,  subject  to  what  I  owed  on  them,  and  my  interest  in  the 
publishing  company.  Following  out  the  promise  that  I  would  subscribe 
to  the  limit  of  my  personal  means,  if  possible  one  million  dollars,  I  went 
to  the  Royal  Trust  Company  of  Chicago,  to  the  Missouri-Lincoln  Trust 
Company  of  St.  Louis,  and  I  believe  to  one  other,  and  arranged  with  them 
to  purchase  of  me  a  first  mortgage  bond  issue  on  my  interest  in  the  real 
estate  to  the  amount  of  seven  hundred  fifty  thousand  dollars.  I  had  ar- 
ranged for  further  loans.  I  went  up  to  Mr,  Wilbur  of  the  Royal  Trust 
Company  of  Chicago  and  borrowed  one  hundred  thousand  dollars  from  them 
on  some  of  Lewis  Publishing  Company  stock.  I  had  arranged  in  all  for 
about  nine  hundred  thousand  dollars,  which  was  as  much  as  I  could  secure 
at  that  time  without  agreeing  to  pledge  the  bank  stock  itself  as  collateraL 
In  other  words,  I  was  raising  this  money  not  on  the  bank  stock  I  was 
subscriber  for,  but  on  my  publishing  interests  and  my  real  estate,  as  I  had 
said  that  I  would  do. 

The  bonds  for  the  real  estate  loans  of  seven  hundred  and  fifty  thousand 
dollars  were  engraved  and  the  papers  were  all  drawn.  The  necessary  adver- 
tisements had  been  inserted  in  the  newspapers.  The  bonds  had  been  sold 
almost  at  par.  But  when  the  bonds  were  delivered  at  St.  Louis  by  the 
Western  Bank  Note  and  Engraving  Company  of  Chicago,  they  had  made 
a  mistake  in  the  printing  of  the  bonds  and  coupons.  This  necessitated  the 
printing  of  a  rider  to  be  pasted  on  every  single  bond,  or  else  their  all  being 
re-engraved.  I  have  samples  of  both  the  original  bond  and  the  corrected 
bond.  I  took  them  to  the  trust  companies  and  they  said  they  could  not 
accept  them  in  that  form.  They  proposed  to  sell  them,  and  it  would  ne- 
cessitate an  explanation  to  every  customer  and  an  examination  of  the  rec- 
ords. Consequently,  the  bonds  had  to  be  sent  back  to  Chicago  to  be  re- 
engraved. 

Meantime,  when  I  arranged  for  this  bond  issue  and  had  sold  thd 
bonds,  I  took  up  the  real  estate  loans  that  I  already  had,  in  order  to  con- 
solidate all  that  real  estate  under  one  first  mortgage  covering  this  seven 
himdred  and  fifty  thousand  dollars'  worth  of  bonds.  I  got  all  my  obliga- 
tions in  the  shape  of  demand  loans  with  mortgages  attached  to  them  be- 
cause, in  order  to  issue  the  bonds  it  was  necessary  to  make  one  transaction 
of  the  whole  thing. 

A  new  mortgage  had  to  be  filed,  covering  the  bonds,  including  all  the 
parcels  of  property  that  came  under  it.  The  old  mortgage  would  then  have 
to  be  canceled  so  that  the  bonds  would  become  first  mortgage  bonds. 
Then  I  could  deliver  them  to  the  purchasers  and  collect  the  price  with 
which  to  pay  the  banks  from  whom  I  had  borrowed  the  money  necessary 
to  carry  out  the  transactions.  So  I  had  gotten  these  various  loans  into 
shape  of  demand  loans,  a  very  foolish  thing  to  do.  The  amounts  represented 
a  very  small  proportion  of  the  value  of  the  properties.  The  situation  was 
dangerous.  The  unexpected  delay  of  nearly  two  months  in  re-engraving  the 
bonds,  put  me  in  a  position  where  I  might  have  been  called  for  those  loans 
at  any  time.  Inability  to  replace  the  loans  in  an  emergency  would  have 
cost  me  the  loss  of  real  estate  holdings  very  greatly  in  excess  of  the  loans. 
The  first  attack  in  the  Mirror  came  at  this  time.  Then  came  a  despatch  to 
the  Hearst  newspaper  service.    It  appeared  that  there  was  going  to  be  some 


THE  DREYFUS  CASE  OF  AMERICA  411 

sort  of  an  assault  on  us,  but  of  course,  we  had  no  idea  where  it  was  com- 
ing from  or  what  it  was  going  to  be.  The  large  loans  to  the  University 
Heights  and  Lewis  Publishing  companies  were  made  under  these  circum- 
stances to  prevent  the  complete  destruction  of  our  institutions. 

The  reorganized  directorate  of  the  People's  Bank,  as  we  shall 
see,  caused  an  investigation  of  these  loans  to  be  made  by  an  expert 
auditor.  The  directors  afterwards  testified  before  the  Congressional 
Committee,  in  substance,  that  they  regarded  the  loans  as  being  ex- 
cessive from  the  standpoint  of  good  banking,  on  the  ground  tliat  no 
bank  ought  to  loan  so  large  a  proportion  of  its  assets  to  any  single 
group  of  institutions.  They  testified  further  that  some  of  these 
loans  were  "slow,"  in  the  sense  that  the  assets,  under  the  then  exist- 
ing circumstances,  were  not  immediately  convertible  into  cash.  They 
agreed,  however,  with  one  accord  and  testified  most  positively  that 
the  large  loans  to  the  University  Heights  and  Lewis  Publishing 
companies  were  abundantly  secured. 

Lewis  undoubtedly  benefited  by  these  loans  in  the  sense  of  pro- 
tecting his  institutions  against  the  assaults  that  were  made  upon 
them,  but  in  so  doing  he  pledged  to  the  People's  Bank  nearly  all 
his  personal  assets  in  real  estate  and  in  his  publishing  business  to 
an  amount  far  in  excess  of  the  sums  that  he  obtained.  Each  and 
every  one  of  these  loans  were  inquired  into  minutely,  as  we  shall 
see,  during  his  trials  in  the  Federal  courts.  It  is  perhaps  suffi- 
cient in  concluding  this  topic  to  say  that  Federal  Judge  Riner  pro- 
nounced the  evidence  of  the  defendant's  (Lewis)  good  faith  in  these 
transactions  to  have  been  "overwhelming." 


CHAPTER  XVIII. 
THE  INSPECTORS'  REPORT. 

The  Federal  Spies — Justice,  the  Sole  Safeguard  of  Liberty — 
The  Dreyfus  Case  of  America — The  Issue  Joined — The 
Inspectors'  Report — Madden's  Opinion. 

Tlie  office  of  the  secret  spy  or  informer  is  one  which  the  entire 
English  race  loathes  with  a  sovereign  contempt.  IMen  even  look 
somewhat  askance  at  the  ordinary  detective,  because  the  nature  of 
his  employment  compels  him  to  act  upon  the  Jesuitical  maxim  that 
the  end  justifies  the  means.  The  spy,  the  informer  and  the  detective 
have  this  in  common:  they  most  often  approach  their  victim  in 
friendly  fashion,  under  some  form  of  deception  or  disguise,  in 
order  to  worm  their  way  into  his  confidence.  Yet  they  harbor  in 
their  hearts  the  while  the  deliberate  purpose  to  secretly  work  his 
undoing.  JNIen  instinctively  shrink  from  these  lethal  agents  as  they 
do  from  the  hiss  of  the  vijjer,  the  first  whiff  of  deadly  gas  or  the 
leprou.s  touch  of  one  suffering  from  some  loathsome,  contagious  ail- 
ment. However  useful  and  necessary  to  the  ends  of  justice  the 
spy  and  the  informer  may  be  deemed,  the  instinct  of  repulsion 
against  their  practices  extends  to  and  includes  their  person.  Men 
shun  them  witli  a  half-unconscious  sense  that  their  spirit  must  be 
congenial  to  their  tasks. 

the  federal  spies. 

The  growth,  therefore,  of  a  Federal  spy  system  in  America,  of 
such  a  nature  that  a  man  who  claims  the  right  of  inquisition  in  the 
name  and  by  the  authority  of  the  President  of  the  United  States, 
may  be  in  fact  a  secret  spy,  is  repellant  to  every  tradition  and 
sentiment  of  a  great  free  people.  Murmurs  have  arisen  from  every 
part  of  the  United  States  in  recent  years  of  the  insidious  extension 
by  the  Federal  authorities  of  such  methods  of  espionage.  Two 
classes  of  Federal  agents  are  chiefly  named:  the  special  agents  of 
the  Department  of  Justice,  and  the  postoffice  inspectors.  The  Secret 
Service  of  the  United  States,  properly  so  called,  is  recognized  as 
inevitably  necessary.  Even  the  activities  of  the  Department  of 
Justice  are  viewed  with  some  semblance  of  toleration.  But  the  ex- 
tension of  the  function  of  the  ])ostoffice  inspector  to  include  espion- 
age into  business  practices  and  the  affairs  of  private  life,  is  a  species 
of  abuse  of  power  which  has  created  a  vague  unrest.  Men  feel 
instinctively  that  it  strikes  at  the  very  roots  of  their  dearest  liber- 
ties. 

That  such  practices  can  exist  at  all  under  a  representative  govern- 
ment is  due  chiefly  to  two  considerations.     The  work  of  the  spy  is 

412 


I    oq 


THE  DREYFUS  CASE  OF  AMERICA  415 

secret.  And  dead  men  tell  no  tales.  The  reports  of  postoffice  in- 
spectors, when  employed  in  the  investigation  of  business  enterprises 
or  of  private  persons,  are  carefully  hid  from  public  view.  They 
are  often  denied  to  Congress,  ostensibly  upon  the  ground  of  public 
policy,  but  perhaps  in  reality  from  very  shame  that  the  paucity  and 
puerility  of  their  contents  should  be  revealed.  Thus  these  secret 
charges  and  accusations  lie  festering  in  the  dark,  or  are  brought  to 
light  only  to  be  peered  at  by  privileged  officials  when  required  for 
the  purpose  of  damning  the  accused,  or  for  the  justification  of  his 
oppressor.  These  papers  would  almost  seem  to  be  contaminated 
with  the  germs  of  some  fatal  sickness,  which  the  pure  white  sun- 
light of  publicity  would  kill,  and  which  can  only  be  kept  alive  in 
the  darkness  and  seclusion  of  official  archives.  If  the  business  repu- 
tation and  the  personal  honor  of  men  are  to  be  contaminated  by 
the  secret  findings  of  Federal  spies,  the  whole  battle  of  the  Anglo- 
Saxon  race  for  trial  by  jury  in  courts  of  justice  and  with  the  right 
in  every  man  to  be  confronted  by  his  accusers,  must  be  fought  again. 

Every  system  of  espionage  is  justifiable  in  the  eyes  of  those  who 
profit  by  it.  Neither  the  spy  nor  his  master  can  see  any  impropriety 
in  his  proceedings.  The  officers  of  government  whose  duty  it  is  to 
detect  and  punish  crime  must  steel  themselves  to  witness  the  conse- 
quences that  are  inevitably  brought  upon  men  by  the  exposure  of 
their  wrongdoing.  They  become  callous  to  human  suffering.  Con- 
stant familiarity  with  all  forms  of  guilt  breeds,  moreover,  an  attitude 
of  suspicion,  and  a  not  unjustifiable  presumption  that  many  whom 
the  community  delights  to  honor  would,  if  they  received  their  just 
deserts,  find  themselves  within  the  shadow  of  the  law.  Such  an 
officer,  on  the  occasion  of  a  serious  accusation,  is  not  apt  to  be 
scrupulous  as  to  its  nature  or  the  source  from  which  it  comes.  His 
duty  is  the  detection  of  crime,  if  crime  there  be.  His  field  of 
achievement  is  the  conviction  and  the  punishment  of  wrongdoers. 
His  hopes  of  advancement,  tragic  as  the  thought  may  seem,  are  in- 
extricably interwoven  with  the  downfall  of  guilty  men.  The 
prosecuting  officers  of  government  are,  therefore,  as  apt  to  welcome 
the  disclosure  of  guilty  secrets  by  the  informer  or  their  detection  by 
the  spy,  as  the  military  commander  is  to  approve  of  similar  service. 
In  either  case  every  species  of  deceit  that  a  spy  can  successfully 
employ  is  likely  to  be  condoned. 

The  public  does  not  know  how  such  information  is  procured. 
The  services  and  reports  of  spies  are  shrouded  in  inviolable  secrecy. 
Their  findings  are  set  forth  in  the  official  charges  and  indictments 
which  follow  in  decent  language,  and  purport  to  be  established  by 
the  evidence  of  reputable  men.  The  public  accusation,  the  odium 
which  attaches  to  the  offense  charged,  the  very  fact  of  the  indict- 
ment, tend  to  alienate  from  the  accused  the  sympathies  of  the  public. 
A  prima  facie  case  arouses  a  presumption  of  guilt  which  works 
powerfully  to  justify  any  methods  of  securing  evidence  that  public 
officials  deem  it  needful  to  employ.     Even  such  flagrant  abuses  of 


416  THE  SIEGE  OF  UNIVERSITY  CITY 

power  as  the  red-hot  pincers,  the  "boots"  and  the  rack  of  medieval 
torture,  or  the  more  refined  but  equally  brutal  methods  of  the 
modern  "third  degree,"  have  been  tolerated  by  public  opinion,  when 
they  have  been  applied  to  actual  criminals,  and  when  by  their  means 
the  ends  of  justice  liave  been  attained. 

History  has  shown  tliat  it  is  only  when  a  judicial  murder  or  other 
flagrant  injustice  has  been  done,  by  the  false  witness  of  the  secret 
accuser  or  the  illicit  finding  of  the  spy,  that  the  actual  enormity 
of  such  abuses  of  administrative  power  is  brought,  in  the  phrase  of 
Bacon,  "home  to  men's  business  and  bosoms."  A  spy  system  may 
grow  up  over  a  long  term  of  years  practically  unknown  and  unre- 
garded, only  to  be  destroyed  in  a  night  when  a  popular  conscious- 
ness of  its  essential  menace  is  aroused  by  the  discovery  that  it  has 
been  the  instrument  of  judicial  Avrong. 

Nor  is  it  needful  that  the  victim  of  injustice  be  wholly  guiltless. 
No  citizen  is  under  an  obligation  to  lead  a  blameless  life  under 
penalties  which  go  to  a  sweeping  condemnation  of  his  business  and 
personal  reputation  and  the  complete  destruction  of  the  fruits  of 
his  legitimate  labors.  The  law  prescribes  penalties  which  the  ex- 
perience of  mankind  has  held  to  be  suited  to  the  precise  character 
of  each  off'ense.  After  such  penalties  have  been  exacted  by  judicial 
process,  the  culprit  is  entitled  once  more  to  the  presumption  of  his 
future  innocence. 

JUSTICE,  THE  SOLE  SAFEGUARD  OF  LIBERTY. 

But  as  to  the  officials  entrusted  by  the  people  with  the  adminis- 
tration of  justice,  the  case  is  otherwise.  Let  the  agents  of  govern- 
ment swerve  but  a  hair's  breadth  beyond  the  letter  of  the  law;  let 
them  commit  or  condone  injustice,  however  slight,  and  not  the  vic- 
tim only,  but  the  whole  body  of  citizens  is  injured,  and  have  the 
right,  as  indeed  tliey  labor  under  the  obligation,  of  demanding 
redress.  For  the  law  is  impersonal.  Justice  is  absolute.  The  act 
of  the  public  officer  is  not  his  own.     It  is  the  act  of  tlie  whole  people. 

If  any  public  official  suff'ers  his  prejudice,  his  passion  or  his  in- 
competence to  hurry  him  beyond  the  limits  of  the  law,  and  if  thereby 
injustice  enters  in,  it  becomes  the  duty  of  the  people  to  rectify  that 
wrong,  however  slight,  with  arms,  if  need  be,  in  their  hands.  For 
there  are  no  degrees  in  justice.  Nor  can  the  people  suff'er  the 
shadow  of  their  own  injustice  or  that  of  their  servants  to  fall  upon 
any  citizen,  however  lowly  or  however  great,  without  consciously 
lowering  the  standard  of  universal  liberty  under  the  law  which  is 
their  sole  defense  against  oppression. 

This  instinct,  which  is  innate  in  the  Anglo-Saxon  blood,  that  in 
no  case  must  a  penalty  be  exacted  beyond  that  which  the  law  and 
custom  of  the  community  prescribes,  has  caused  the  English-speaking 
race  to  single  out  the  decision  of  Portia  in  Shakespeare's  "Merchant 
of  Venice"  as  a  symbol  of  eternal  justice: 


THE  DREYFUS  CASE  OF  AMERICA  417 

"Therefore  prepare  thee  to  cut  off  the  flesh, 
Shed  thou  no  blood;  nor  cut  thou  less  nor  more 
But  just  one  pound  of  flesh:  if  thou  cut'st  more 
Or  less  than  a  just  pound,  bj  but  so  much 
As  makes  it  light  or  heavy  in  the  substance. 
Or  th«  division  of  the  twentieth  part 
Of  one  poor  scruple,  nay,  if  the  scale  do  turn 
But  in  the  estimation  of  a  hair. 
Thou  diest  and  all  thy  goods  are  confiscate." 

Has  Lewis  erred?  What  man  has  not!  Has  he  intentionally 
or  unintentionallyj  consciously  or  unconsciously,  deviated  from  the 
strict  lines  of  commercial  rectitude,  and  placed  himself  within  the 
shadow  of  the  law?  Then  to  the  extent  of  his  error  and  to  the  full 
limit  of  the  penalty  that  the  law  of  such  case  makes  and  provides, 
it  was  and  is  no  more  than  right  that  he  be  punished.  But,  in  so  far 
as  he  has  done  no  \vrong,  and  to  the  full  extent  that  the  conduct  of 
his  private  life  and  of  his  various  enterprises  was  blameless,  he  was 
and  is  entitled  to  the  presumption  of  innocence  and  the  protection 
of  the  law.  If  any  servant  of  the  people,  be  he  the  President  him- 
self, shall  have  been  so  far  misguided  through  ignorance,  through 
incompetence,  through  zeal,  through  a  mistaken  fidelity  to  a  mis- 
conception of  his  oath  of  office,  as  to  pursue  LewMS,  in  consequence 
even  of  his  wrongdoing,  across  the  line  that  divides  the  wrong,  if 
any  there  be,  of  which  he  has  been  guilty,  into  the  rightful  and 
lawful  field  of  his  legitimate  career,  and  there  visit  upon  him  so 
much  injury  as  one  breath  of  baseless  slander,  the  deprivation  of 
a  single  dollar  or  the  burden  of  an  hour  of  anxious  care,  that  act  is 
wrong.  It  is  absolutely  wrong.  Nor  can  that  wrong  be  borne  or 
purged  by  any  official  scapegoat.  Let  the  guilty  official  sulFer. 
Still,  the  burden  of  his  misdeeds  must  lie  upon  the  consciences  of  the 
American  people. 

The  tongues  of  millions  have  made  free  for  many  years  with 
Lewis'  good  name.  In  so  far  as  what  has  been  said  against  Lewis 
is  the  truth,  he  suffers  justly.  But  in  so  far  as  lies  and  slander 
are  being  bandied  from  mouth  to  mouth,  Lewis  suffers  grievous 
injustice  and  indignity.  And  if  it  shall  appear  that  so  much  as  a 
single  falsehood  has  been  spread  abroad  by  the  servants  elected  by 
the  people  of  the  United  States  to  administer  the  ends  of  justice, 
not  that  guilty  man  alone,  but  the  whole  people  lie  under  a  burden 
of  guilt  from  which  they  must  yet  be  purged. 

THE   DREYFUS   CASE   OF    AMERICA. 

Let  this  issue  be  once  indissolubly  joined,  as  it  was  in  the  case 
of  Dreyfus,  and  the  American  people  will  work  it  out  at  the  bar  of 
conscience,  though  they  do  it  with  blood  and  fire.  For  the  case  of 
Dreyfus  settled  forever  the  issue  between  the  rights  of  men  and 
the  rights  of  institutions.  The  medieval  theory  of  the  papacy  that 
the  dissenter,  the  revolutionist,  the  enemy  of  the  existing  order, 
must,  if  need  be,  burn  at  the  stake  rather  than  that  the  institutions 
by  which  society  is  governed  shall  suff'er,  has  been  dissipated. 


418  THE  SIEGE  OF  UNIVERSITY  CITY 

In  France,  the  crime  for  which  Dreyfus  suffered  was  not  his  own. 
It  was  the  crime  of  the  chiefs  of  the  French  army.  The're  had 
been  treasonable  communications  in  high  quarters.  The  effect  of 
public  disclosures  might  be  to  shake  the  faith  of  the  people  in  the 
integrity  of  its  military  system.  Such  loss  of  confidence  might  spell 
the  weakening  of  the  loyalty  of  the  people.  It  might  impair  the 
morale  of  the  army,  or  even  deprive  it  of  needed  popular  support. 
The  end  might  be  the  menace  and  peril  of  the  dreaded  German 
invasion.  So  reasoned  men  high  in  authority,  whose  motives  seemed 
to  them  those  of  the  purest  patriotism.  Not  so  reasoned  the  people. 
Was  Dreyfus  guilty.''  Let  him  suffer.  Was  he  not  guilty.''  Let 
him  be  declared  innocent,  though  the  heavens  fall.  And  so  the 
French  people  brought  Dreyfus  back  to  honor,  even  from  Devil's 
Island. 

Is  Lewis  an  American  Dreyfus  ?  The  fraud  order,  the  withdrawal 
of  second-class  entry,  the  indictments,  the  petty  persecutions  of 
the  postal  officiary,  the  widespread  ruin  and  the  final  catastrophe 
all  merge  into  this  single  issue.  Let  us  see  if  this  parallel  will 
hold. 

In  America,  the  postoffice  inspection  system  is  the  right  hand  of 
the  postmaster-general.  It  is  the  most  powerful  agency  in  the 
consolidation  of  his  power.  The  Postoffice  Department  is  not  only 
a  vast  business  organization  designed  to  serve  the  people.  It  is  an 
enormous  political  machine,  the  greatest  existing  menace  to  the 
American  democracy.  The  postmaster-general,  in  actual  practice,  is 
not  primarily  the  head  of  the  Postoffice  Department  as  business 
manager.  He  is  primarily  the  campaign  manager  of  the  President, 
the  chief  political  spoilsman  of  the  party  in  power. 

Let  us  suppose  that  a  judicial  murder  has  been  done,  in  which 
postoffice  inspectors  have  been  the  guilty  aggressors.  To  acknowl- 
edge the  crime  and  repudiate  its  participators  would  inevitably  tend 
to  discredit  the  service  and  weaken  the  grasp  of  the  Administration 
upon  its  chief  source  of  political  support.  Let  those  in  high  author- 
ity be  imbued  with  the  pernicious  doctrine  that  the  prosperity  of 
the  Nation  is  bound  up  with  that  of  the  Administration,  and  that 
the  defeat  of  the  dominant  party  at  the  hustings  is  equivalent  to 
national  calamity.  Might  it  not  well  seem  to  them  that  the  mere 
life  of  a  single  citizen  or  the  utter  destruction  of  any  enterprise  or 
any  group  of  enterprises  were,  by  comparison,  a  negligible  thing? 

Upon  the  one  hand  stands  the  citizen  surrounded  by  the  wreck 
and  ruin  of  his  enterprise,  fastened  to  the  public  pillory  and  bearing 
tlie  brand  of  fraud  upon  his  brow.  Upon  the  other  is  the  compact 
array  of  the  postal  inspection  service,  the  rank  and  file  of  the  post- 
office  officiary  in  every  city,  town  and  hamlet,  the  entire  administra- 
tive organization  of  the  Government,  and  even  in  the  background 
the  Federal  judiciary'  itself,  in  so  far  as  it  is  capable  of  being  swayed 
at  critical  moments  by  the  prestige  and  patronage  of  the  Adminis- 
tration.    Such  a  choice,  mayhap,  is  not  one  before  which  the  chief 


THE  DREYFUS  CASE  OF  AMERICA  419 

spoilsman  of  any  political  party  would  long  falter.  But  if  he  err, 
if  the  sword  of  justice  be  cast  into  the  opposing  scale,  the  time  must 
surely  come  when  he  shall  see  arrayed  against  him  the  solid  pha- 
lanx of  the  people. 

THE   ISSUE  JOINED. 

Such,  and  no  other,  is  the  issue  raised  by  the  report  of  Postoffice 
Inspectors  James  L.  Sticc,  William  T.  Sullivan  and  Robert  Fulton, 
on  the  People's  Bank.  If  these  men  had  come  to  Lewis'  door  as 
citizens  making  inquiry,  they  would  hardly  have  won  past  the  office 
boy.  They  were  men  of  most  ordinary  capacity.  Stice  had  been 
head  bookkeeper  for  a  coal  company,  where  he  directed  another 
clerk  or  two.  Sullivan  had  been  publisher  of  a  country  weekly. 
Fulton,  inspector-in-charge,  was  a  fledgling  lawyer.  Neither  man 
could  command  a  salary  in  commercial  business  in  excess  of  thirty 
or  fort}'^  dollars  a  week.  Lewis  would  not  ordinarily  have  dreamed  of 
attempting  to  explain  the  character  of  his  enterprises  to  men  who 
in  the  very  nature  of  things  were  incapable  of  any  adequate  under- 
standing. His  associates  were  the  presidents  of  the  greatest  mail 
order  houses,  advertising  agencies  and  banking  institutions  of 
America.  He  had  spent  months  canvassing  with  these  men  his 
projects,  winning  from  them  the  tribute  of  their  approval  and 
applause.  Why  should  he  turn  from  such  men  as  these  and  submit 
to  the  inquisition  and  exactions  of  Robert  Fulton  and  his  underlings  .'* 
Simply,  because  they  presented  themselves  in  the  name  and  with 
the  authority  of  the  people  of  the  United  States.  And  the  people, 
whose  commission  they  bore,  are  answerable  at  the  bar  of  absolute 
justice  for  the  conduct  of  these  men  and  for  every  consequence  that 
has  flowed,  or  shall  flow,  either  directly  or  remotely  through  to  the 
bitter  end  from  any  act  of  theirs. 

THE  inspectors'  REPORT. 

The  inspectors'  secret  report  on  the  People's  United  States  Bank 
bears  date  of  May  17,  1905.  The  popular  demand  for  a  Congres- 
sional inquiry,  reinforced  by  a  political  upheaval  which  altered  the 
political  complexion  of  the  lower  House  of  Congress,  has  at  length 
dragged  this  document  forth  into  the  light  of  day.  This  is  the 
report  procured  by  Betts  from  Inspector  Sullivan  (who  composed 
it),  and  largely  quoted  in  the  Post-Dispatch  Extra  of  May  31,  1905. 
Let  us  see  what  it  contains.     The  opening  paragraph  follows: 

We  have  the  honor  to  submit  the  following  report  on  Case  No.  39,640-C, 
relating  to  an  alleged  scheme  to  defraud  by  E.  G.  Lewis  of  the  People's 
United  States  Bank  located  at  Winner  Station,  St.  Louis,  Missouri,  at  what 
is  called  University  Heights  addition,  the  result  of  personal  investigation 
begun  March  14,  1905,  and  continued  from  time  to  time  since.  Before 
entering  on  the  case,  a  brief  history  of  Mr.  Lewis'  career  for  the  last  ten 
years  may  be  of  interest  as  showing  something  of  his  conduct  and  character 
during  that  period. 

The  thirteen  paragraphs  following  (set  forth  in  a  preceding 
chapter)  are  evidently  based  upon  the  allegations  of  Nichols  to  the 
inspectors.    The  character  of  Nichols  and  his  animus  against  Lewis 


420  THE  SIEGE  OF  UNIVERSITY  CITY 

has  been  shown.  The  inspectors  admit  that  they  accepted  his  state- 
ments unverified  and  incorporated  them  into  their  report  as  matters 
of  fact  over  their  own  signatures.  Three  falsehoods  occur  in  the 
opening  paragrajDhs.  Lewis  was  said  to  have  been  in  debt  for  his 
board,  Avhereas,  in  fact,  he  was  not  boarding,  but  keeping  house. 
Otto  Stoelker  was  represented  as  having  from  grief  and  humility 
committed  suicide,  whereas,  in  fact,  he  is  still  living.  Lewis  was 
charged  with  having  induced  the  sheriff,  "by  fraud  and  deception, 
to  loosen  up  on  a  car  of  Anti-Skeet,  which  Lewis  shipped  out  of 
the  state.''  This  is  pure  fabrication.  The  whole  alleged  history  of 
Lewis'  career  is  highly  colored  from  being  viewed  through  the  green 
glasses  of  Nichols'  jealous  rancor. 

The  thirty-three  paragraphs  next  following  purport  to  be  chiefly 
extracts  from  Lewis'  articles  in  the  Woman's  Magazine  with  the 
inspector's  comment  thereon.  The  latter  will  be  quoted  as  indica- 
tive of  the  tone  and  temper  that  characterizes  the  entire  report: 

E.  G.  Lewis  began  to  advertise  the  "Postal  Bank  and  Trust  Company" 
in  the  February,  1904,  Woman's  Magazine.  Lewis  says  in  this  article,  among 
other  misrepresentations:  "Now  I  want  you  to  co-operate  with  us  in  or- 
gp.nizinp;  the  greatest  bank  in  the  world.  A  few  dollars  from  every  family 
where  the  Woman's  Magazine  goes  would  mean  millions  of  dollars  of  capi- 
tal, and  we  stand  ready  to  co-operate  with  you  dollar  for  dollar  so  that  you 
and  we  own  this  great  bank  equally."  Up  to  the  present  time  Mr.  Lewis 
has  not  co-operated  to  the  extent  of  a  single  dollar  of  his  own  money. 

The  fact  of  subsequent  changes  in  the  plans  of  the  bank  and 
corresponding  modifications  of  its  promotion  literature  is  nowhere 
mentioned.     The  report  proceeds : 

In  the  June,  1904,  edition  of  the  Woman's  Magazine,  after  dilating  and 
enlarging  on  the  safety,  security  and  prosperity  of  banking  in  general,  and 
holding  out  seductive  and  brilliant  prospects  for  all  to  get  into  a  postal 
bank  at  its  organization,  as  participants  in  the  greatest  bank  in  the  world 
and  sharer  of  its  enormous  profits,  which  will  bring  wealth  in  a  short  time, 
E.  G.  Lewis  says,  among  other  things: 

The  extract  is  omitted.  The  inspectors'  comment  is  as  follows: 
In  the  July,  1904,  Woman's  Magazine,  two  whole  pages  are  devoted  to 
exploiting  the  "People's  United  States  Bank."  The  eflBcient  promoter, 
E.  G.  Lewis,  herein  discloses  himself  as  a  profuse  writer,  a  shrewd  promoter, 
a  genius  of  more  than  inventive  tact  (sic)  and  pledges  his  private  fortune, 
the  Lewis  Publishing  Company,  his  other  holding  in  wildcat  schemes,  and 
his  sacred  honor  to  the  success  of  this  enterprise  in  the  name  and  for  the 
love  of  the  people. 

The  impropriety  of  the  characterization  of  any  citizen,  and 
especially  the  president  of  a  two  million,  five  hundred  thousand 
dollar  bank  in  language  so  intemperate  and  abusive,  in  an  official 
report  by  a  responsible  officer  recommending  to  his  superiors  the 
destruction  of  that  institution,  is  manifest.  The  gravity  of  such 
accusations  obviously  demands  that  they  be  discussed  at  least  with 
judicial  tone  and  temper,  if  not  in  a  spirit  of  fairness,  and  with  a 
disposition  to  allow  the  accused  the  benefit  of  every  reasonable 
doubt.  The  Anglo-Saxon  spirit  of  fair  play,  which  finds  expres- 
sioji  in  the  Americanism,  "a  square  deal,"  would  seem  to  demand 


THE  DREYFUS  CASE  OF  AMERICA  421 

that  the  authors  of  sudh  a  report  as  this  should  have  been  severely 
reprimanded,  and  at  least  directed  to  restate  their  findings  in  a 
proper  manner.  The  whole  document  would  unquestionably  have 
been  vitiated  if  read  in  evidence  before  an  American  jury.  An 
atmosphere  of  assurance,  of  implacable  hostility  and  of  envenomed 
malice  breathes  from  every  line.  Many  of  the  comments  and  con- 
clusions stated  are  obviously  impertinent  and  irrelevant.  Counsel 
for  the  defense,  upon  cross-examination,  would  have  literally  torn 
into  shreds  this  basic  document  which  underlies  the  fraud  order, 
and  is  directly  responsible  for  the  ensuing  calamities  to  the  stock- 
holders of  the  bank  and  the  associated  interests. 

The  next  comment  by  the  inspectors,  after  extensive  quotations 
from  the  Woman's  Magazine,  bears  upon  representations  of  Lewis 
as  to  the  proposed  directorate  of  the  bank,  and  especially  the  fol- 
lowing statement:  "The  officers  and  directors  can  not  borrow  or 
use  a  dollar  of  its  funds,"  on  which  point  the  inspectors  comment 
as  follows: 

On  March  15,  1905,  the  capital  stock  was  increased  to  two  and  a  half 
million  dollars,  and  the  increase  of  one  and  a  half  millions  was  entirely 
paid  in  out  of  subscriptions  March  18,  1905.  To  make  whole  those  sub- 
scriptions which  had  been  partly  used  by  Lewis  in  other  business,  the  sum 
of  one  hundred  ninety-six  thousand  dollars  was  borrowed  from  the  bank 
on  March  15,  1905,  by  Lewis  and  his  directors,  that  could  not  be  bought. 

This  comment,  in  view  of  the  circumstances  above  described,  must 
be  characterized  as   false,  misleading  and  totally  gratuitous. 

Relative  to  the  foregoing  (i.  e.  additional  quotations  from  the  Woman's 
Magazine)  let  us  state  here  that  on  March  18,  1905,  *  *  *  not  a  single 
dollar  of  E.  G.  Lewis'  money  had  gone  into  the  bank.  He  told  Bank-Exam- 
iners Cook  and  Nichols,  April  3,  1905,  that  he  had  not  paid  one  cent  of  the 
capital  stock  out  of  his  individual  funds,  and  that  it  was  a  mistake  to  have 
issued  nine  hundred  and  fifteen  shares  of  capital  stock  in  his  name.  He 
took  a  pen  and  canceled  the  certificate  for  nine  hundred  and  fifteen  shares 
in  their  presence.  Later  in  the  same  day,  after  consultation  with  some  of 
the  directors  (who  are  not  embarrassed  with  the  acquaintance  of  experi- 
ence of  banking)  he  claimed  that  two  shares  of  the  stock  should  have  been 
issued  to  him,  otherwise  he  could  not  be  director  or  president.  He  accord- 
ingly issued  two  shares  of  stock  to  himself. 

On  April  8,  1905,  in  reply  to  a  question  propounded  by  Inspector  Sulli- 
van, he  said  to  Inspectors  Fulton,  Sullivan  and  Stice  that  it  was  a  mistake 
to  have  canceled  the  certificate  for  nine  hinidred  and  fifteen  shares  of  stock 
made  by  the  bank-examiner.  When  asked  what  had  become  of  the  other 
nine  thousand  shares  of  the  original  capital  stock,  Lewis  claimed  he  was  en- 
titled to  nine  thousand  nine  hundred  and  fifteen  shares.  He  said  that  he 
had  paid  $495,750  of  his  own  funds  of  the  original  half-million  paid  in.  The 
truth  is  that  he  had  not  paid  one  cent.  His  charter  was  secured  on  the  false 
statement  that  there  was  paid  in  by  him  $495,750,  when  in  fact  it  was  paid 
in  by  subscribers. 

Evidently  the  inspectors  are  depending  as  to  the  foregoing  largely 
upon  their  recollection  of  verbal  statements,  as  to  which  they  are 
contradicted  in  essential  details  by  the  sworn  testimony,  both  of  the 
bank-examiners  and  of  Lewis.  The  report  of  the  inspectors  is  not 
made  under  oath  and  was  so  privileged  that  the  authors  were  aware 


422  THE  SIEGE  OF  UNIVERSITY  CITY 

that  no  responsibility  would  attach  to  them  for  any  misstatement 
of  which  thej'^  might  be  guilty.  Such  testimony  would  obviously 
be  valueless  in  any  court  of  law. 

After  commenting  on  Lewis'  articles  in  the  Woman's  Magazine 
for  October,  November  and  December,  the  inspectors  remark  as 
to  the  last  article  as  follows: 

He  again  pledges  his  honor,  his  property  and  the  Lewis  Publishing  Com- 
pany and  appeals  to  the  help  of  God  to  carry  on  this  work,  making  the 
broadest  and  most  philanthropic  appeals  to  the  people  to  stand  by  him  in 
honesty  and  sincerity. 

As  to  Lewis'  January  (1905)  article  in  the  Woman's  Magazine, 
the  inspectors  comment  in  part  as  follows: 

The  most  of  the  article  is  devoted  to  how  the  bank  will  make  profits, 
the  erection  of  a  new  bank  building,  how  to  save  money  by  sending  it  to 
the  bank,  and  generally  advertising  E.  G.  Lewis  as  the  greatest  benefactor 
the  world  has  ever  known,  or  is  likely  to  hear  of  in  the  future. 

Thereafter  follows  a  statement  as  to  what  purports  to  be  "A 
careful  checking  of  the  subscrijotion  books  of  E.  G.  Lewis  on  April 
10  and  11,  1905,  by  Inspectors  Sullivan  and  Stice,  assisted  by 
Clerks  Byers,  McBurney,  Fawcett,  Miller,  Boland  and  Eitman, 
showing  receipts  of  subscriptions  to  capital  stock  to  a  total  amount 
of  $2,12i,539  as  of  March  31,  1905,  the  latest  then  entered  upon 
the  subscription  records.  Some  of  the  entries  on  subscription  rec- 
ords were  marked  'canceled,'  others  had  a  line  drawn  through 
them,  others  were  marked  'duplicate,'  etc.  A  careful  compilation 
of  all  these  by  Clerks  Byers  and  McBurney  aggregated  credits  of 
$204,993.65,  which,  being  deducted,  left  $1,919,545.35  as  net  re- 
ceipts." Next  follows  comment  upon  the  transactions  connected 
with  the  increase  of  capital  stock  above  narrated,  after  which  is 
inserted  the  following  schedule: 

The  account  of  E.  G.  I-ewis  in  connection  with  funds  received  and  dis- 
bursed in  this  general  transaction  properly  stated  for  March  15,  reads  as 
follows : 

RECEIVED. 

Subscriptions  for  stock $2,114,926.67 

Demand    subscriptions 46,074.50 

Collection  subscriptions 128,042.44 

Total $2,289,043.61 

Due  to  balance  account 84,049.96 

DISBURSED. 

Paid  capital  stock $   500,000.00 

Paid  capital  stock 1,500,000.00 

Deductions  claimed  for  cancellations,  etc 204,993.65 

Total    $2,204,993.65 

The  item  of  $204,993.(55  is  unverified  by  us,  and  it  is  our  opinion  that  this 
amount  is  overstated.  We  called  on  Mr.  Lewis  for  vouchers  showing  these 
disbursements,  but  he  refused  to  permit  a  personal  verification  at  that  time, 
although  he  proposed  to  produce  this  evidence  at  a  later  date.  The  two 
items  of  demand  and  collection  subscriptions  are  also  unverified,  and  it  will 
be  understood  tliat  this  statement  is  made  up  from  figures  furnished  by  Mr. 
Lewis. 


THE  DREYFUS  CASE  OF  AMERICA  423 

This  statement  shows  that  E.  G.  Lewis  has  actually  paid  every  cent  of 
the  two  million  dollars  capital  stock  which  has  been  paid  in,  out  of  sub- 
scriptions which  he  received,  and  that  not  one  dollar  of  his  individual  money 
has  been  used  in  the  transaction. 

It  further  shows  that  E.  G.  Lewis  had  used  $196,375.63,  which  was  re- 
ceived from  the  dear  people  as  subscriptions  for  stock  in  the  bank,  for  his 
own  individual  purposes — practically  embezzled  tliat  amount  from  the  trust 
funds  deposited  with  him — and  only  made  it  good  in  notes  when  he  found  it 
necessary  to  pay  in  the  capital  stock  without  encroaching  on  his  "private 
fortune,  his  sacred  honor,  and  the  Lewis  Publishing  Company"  which  had 
been  pledged  to  put  up  dollar  for  dollar  with  the  subscribers. 

The  impropriety  of  such  phrases  as  "dear  people,"  "practically 
embezzled"  and  the  like  is  manifest.  The  circumstances  here  de- 
scribed were  specifically  testified  to  at  both  of  Lewis'  trials  and  no 
evidence  of  embezzlement  was  shown.  On  the  contrary,  the  evidence 
of  good  faith  was  held  by  Judge  Riner  to  have  been  "overwhelm- 
ing." 

The  formal  response,  under  oath,  of  Lewis  as  president  of  the 
bank  to  the  citation  based  upon  this  report,  certifies  the  total  amounts 
refunded  to  subscribers,  as  of  June  17,  1905,  on  account  of  the 
withdrawal  and  cancellation  of  their  subscriptions,  as  in  excess  of 
two  hundred  and  eighty-four  thousand  dollars,  or  approximately 
eighty  thousand  dollars  more  than  the  amount  allowed  by  the  in- 
spectors. This  difference,  added  to  the  item  of  one  hundred  and 
ninety-six  thousand  dollars,  made  up  of  Lewis'  note  and  that  of 
the  directors  for  promotion  expenses,  exceeds  the  total  alleged  short- 
age charged  by  the  inspectors  of  two  hundred  and  seventy-one 
thousand  dollars  by  the  sum  of  two  thousand  dollars.  The  in- 
spector's "opinion"  that  the  "item  of  two  hundred  and  four  thou- 
sand dollars  unverified  by  us  is  overstated,"  is  admittedly  pure  guess- 
work. Yet  former  Postmaster-General  Cortelyou  has  testified 
that  he  would  in  the  last  analysis  accept  the  statement  of  a  post- 
office  inspecor  against  that  of  the  legally  approved  and  duly  quali- 
fied bank-examiners  of  the  state  of  Missouri! 

The  circumstances  connected  with  Lewis'  note  of  fifty  thousand 
dollars  are  next  set  forth,  and  thus  commented  upon: 

The  collateral  to  secure  the  fifty  thousand  dollar  note  is  an  agreement 
on  the  part  of  Lewis  to  execute  a  mortgage  when  he  obtains  a  title.  If 
he  never  takes  a  title,  the  security  is  worthless.  The  other  note  is  un- 
secured, but  it  is  alleged  that  this  will  be  paid  when  the  items  cliarged 
to  promotion  expenses  are  allowed  by  the  secretary  of  state.  Then  it 
will  be  paid  from  the  earnings  of  the  bank,  or  in  other  words  by  the 
stockholders.  *  *  *  When  these  notes  were  placed  in  the  bank  as  an 
asset,  no  money  was  paid  to  the  bank,  hence  they  were  placed  there  to 
cover  money  previously  used  by  Lewis.  So  that  he  was  short,  according  to 
his   own   records   on   March    14,   1905,   $196,375.63. 

Of  the  balance  of  .$84,019.96  shown  to  be  due  the  stockholders  on  March 
15,  1905,  by  the  above  table  of  receipts  and  disbursements,  Lewis  had  on 
that  day  a  balance  of  .$3,745.90  in  the  special  account,  and  $4,733  in  his 
collection  accoimt,  leaving  a  balance  of  $75,571.06  of  the  subscription 
trust  fund  still  unaccounted  for,  which  Lewis  had  used  in  other  concerns. 

As  above  stated,  the  difference  between  the  total  amounts  paid 


424  THE  SIEGE  OF  UNIVERSITY  CITY 

back  by  Lewis  to  subscribers  and  the  fraction  of  that  amount 
allowed  by  the  inspectors,  more  than  wipes  out  this  alleged  shortage. 

Next  follows  a  description  of  the  entries  in  the  bank  books  in 
connection  with  the  increase  in  capital  stock,  with  the  following 
comment: 

The  special  account  of  E.  G.  Lewis  for  the  bank  was  increased 
$375,-238.17  by  the  shifting  of  funds,  deposit  of  notes  and  the  covering 
into  the  bank  of  moneys  used  by  Lewis,  all  consummated,  as  we  believe, 
in  consequence  of  our  investigation  and  with  the  design  of  deceiving  us 
with  reference  to  the  true  state  of  accounts. 

Tliere  is  no  evidence,  other  than  the  inspectors'  "belief,"  of  any 
such  design.  The  entries  in  question  were  necessitated  by  the  in- 
crease in  stock  and  are  capable  of  full  and  satisfactory  explanation 
in  that  relation.  The  inspectors  are  evidently  mistaken  in  this 
opinion.     They  give  themselves  undue  credit. 

Next  comes  the  following  paragraph: 

On  April  8,  1905,  E.  G.  Lewis  stated  positively  to  Inspectors  Fulton, 
Sullivan  and  Stice  that  of  the  original  capital  stock  paid  in  (five  hundred 
thousand  dollars),  he  himself  had  paid  in  $495,750,  and  the  other  seventeen 
persons  who  are  named  as  organizers  of  the  bank  had  paid  in  $4,350.  If 
this  statement  was  true,  which  in  our  opinion  it  is  not,  then  on  March  15, 
1905,  E.  G.  Lewis  was  an  embezzler  of  $575,571.06  of  the  funds  previously 
remitted  to  him  for  stock  subscriptions  to  the  bank. 

A  comparison  of  these  statements  with  the  facts  of  record  above 
cited  will  show  that  they  are  capable  of  justification  upon  no  theory 
whatsoever.     The  report  continues: 

In  this  connection,  permit  us  to  revert  to  the  literature  sent  through 
the  mails  in  which  Lewis  claimed  to  be  paying  all  the  expenses  of  pro- 
moting this  bank  and  that  he  was  putting  up  dollar  for  dollar  with  all 
the  subscribers  for  stock  in  the  bank,  and  to  say,  further,  that  in  the 
bookkeeping  department  of  the  Lewis  Publishing  Company  on  April  8, 
1905,  we  found  a  record  showing  that  E.  G.  Lewis  had  drawn  a  salary 
from  the  bank  from  July,  1904,  to  February,  1905,  inclusive,  amounting 
to   $16,598.55 

This  charge  was  repeated  in  the  Post-Dispatch  and  generally 
published  in  the  newspapers  throughout  the  country.  Lewis  there- 
upon complained  to  the  Postoffice  Department  and,  as  has  been 
seen.  Inspector  Stice  was  directed  to  verify  this  item.  He  reported 
to  the  Department  that  it  was  an  error.  The  item  was  not  properly 
salary,  but  was  in  reality  work  and  labor.  The  entire  amount  had 
been  drawn  by  employees  and  no  part  of  it  had  been  received  by 
Lewis.  No  effort  on  the  part  of  the  Postoffice  Department  to  give 
publicity  to  the  fact  that  this  charge  had  been  made  under  a  mis' 
apprehension,  is  of  record. 

Next  follows  an  cxcerjit  from  the  charter  of  the  bank  giving  the 
names  of  the  incorporators,  and  in  that  connection  attention  is 
called  to  the  fact  that  the  first  Board  of  Directors  were  employees 
of  the  Lewis  Publisliing  Company.  Then  comes  an  extract  from 
one  of  Lewis'  promotion  letters,  and  a  further  extract  from  the 
Woman's  Magazine  of  January  23,  1905,  stating  that  the  sub- 
scription books  closed  as  of   December  2i  with  ninety  thousand 


THE  DREYFUS  CASE  OF  AMERICA  425 

subscriptions  to  the  stock.  A  further  quotation  is  given  in  which 
Lewis  stated  his  plan  for  trusteeing  one  million  dollars  of  the  stock 
of  the  bank,  holding  half  a  million  dollars  to  be  sold  on  the  install- 
ment plan,  and  placing  another  half  million  with  bank  officers  and 
other  influential  persons  to  secure  their  advice  and  co-operation. 
The  inspectors  proceed: 

The  remainder  of  this  article  is  devoted  to  showing  how  great  the 
profits  are  to  be  and  encouraging  savings  depositors  and  the  profit-sharing 
certificates  of  the  bank,  and  still  soliciting  additional  subscriptions  to  the 
capital  stock. 

In  the  March,  1905,  Woman's  Magazine,  E.  G.  Lewis  devotes  about  five 
columns  on  pages  thirty  and  thirtj'-one  to  advertising  and  exploiting  the 
People's  United  States  Bank,  telling  how  the  bank  is  to  make  money  for 
its  stockholders,  and  is  to  be  the  most  profitable  bank  in  existence,  and 
saying  that  through  the  fees  coming  into  the  legal  department  of  the 
bank  it  will  pay  its  expenses;  that  the  bank  will  be  run  cheaper  than 
other  banks,  not  costing  over  fifteen  per  cent  of  others;  and  generally 
trying  to  inspire  confidence  in  himself  as  its  head.  The  savings  deposit, 
the  certified-check  system,  the  profit-sharing  certificate  system,  and  the 
expected  income  and  profits  are  largely  paraded,  and  solicitation  is  made 
for  deposits.  The  Bank  Reporter  is  promised,  which  is  to  be  the  bank 
organ  and  expositor  in  future.  The  impression  sought  to  be  made  is  that 
Lewis  became  rich  enough  through  the  Lewis  Publishing  Company,  and 
will  make  everybody  else  rich,  or  at  least  comforable,  who  will  join  this 
enterprise. 

After  commenting  on  Lewis'  article  in  the  Woman's  Magazine  for 
April  and  the  publication  called  the  Bank  Reporter,  the  inspectors 
proceed  to  set  forth  their  views  as  to  the  value  of  the  Lewis  Pub- 
lishing Company: 

In  advertising  and  exploiting  the  People's  United  States  Bank,  and  in 
trying  to  convince  the  public  that  the  bank  would  prove  a  profitable  and 
advantageous  investment  to  the  stockholders  from  the  day  the  bank  was 
organized,  E.  G.  Lewis  kept  prominently  before  the  public,  and  particularly 
the  readers  of  the  Woman's  Magazine  and  the  Woman's  Farm  Journal, 
the  building  up  of  these  two  publications  from  a  capital  of  $1.25  in  the 
year  1900  and  the  enormous  success  which  the  Lewis  Publishing  Company 
had  attained  in  these  four  years,  arising  chiefly  from  the  inventive  genius, 
the  organizing  ability,  tact,  and  shrewdness  of  E.  G.  Lewis,  and  arguing 
from  this  standpoint  that  the  bank,  engineered  and  promoted  and  managed 
by  this  same  world-astonisher,  would  bring  untold  wealth,  prosperity, 
financial  power,  and  great  riches  to  any  person  who  would  invest  in  same, 
even  to  the  extent  of  one  dollar,  promising  himself  to  put  in  dollar  for 
dollar  for  every  dollar  put  in  by  all  his  patrons.  He  claimed  that  the 
Lewis  Publishing  Company  is  now  earning  an  annual  profit  of  from  one- 
quarter  of  a  million  to  one-lhird  of  a  million  dollars  a  year,  and  had 
erected  the  "great  ofiice-building  of  the  Woman's  Magazine  and  Woman's 
Farm  Journal  for  cash,  without  mortgage  or  lien,  at  a  cost  of  over  a  half 
million  dollars,  in  five  years,  from  a  start  of  $1.25,  showing  what  can  be 
done,  if  enough  people  combine  to  do  it,  even  at  ten  cents  per  year 
each." 

Then  follows  extracts  from  the  April  and  June  numbers  of  the 
Woman's  Magazine  to  the  same  effect,  after  which  the  inspectors 
insert  a  statement  of  the  Lewis  Publishing  Company  furnished  them 
by  Lewis  as  of  March  li,  1905,  upon  which  statement  they  thus 
comment : 


426  THE  SIEGE  OF  UNIVERSITY  CITY 

Analysis  of  the  assets  given  above  shows  that  one  and  a  quarter  million 
dollars  thereof  consists  of  the  franchise  or  privilege  of  mailing  the  two 
publications  as  second-class  matter  at  the  rate  of  one  cent  per  poimd. 
This  franchise  only  one  of  the  publications  possesses.  The  Woman's 
Magazine  is  being  mailed  on  a  temporary  permit  of  the  postmaster  at 
St.  Louis,  Mo.,  on  an  application  filed  in  1899  (three  years  before  the 
Woman's  Magazine  had  existence)  for  same  privilege  to  the  Winner 
Magazine,  made  by  the  Mail  Order  Publishing  Company.  Hence,  these 
are  improper  assets  and  do  not  exist  in  fact.  Deduct  this  amount  from 
the  assets  and,  without  questioning  the  remaining  assets,  the  total  assets 
would  be  $951,326.4,'5.  Pay  off  the  liabilities  due  banks,  notes  for  sup- 
plies, and  special  loans  (with  which  tiie  "great  oflSce"  was  built),  aggre- 
gating $593,592.71,  out  of  the  assets,  and  there  would  remain  only 
.f.357.733.74,  and  the  surplus  would  have  been  absorbed  and  the  capital 
stock  impaired. 

This  analj'sis  shows  (sic)  that  the  Lewis  Publishing  Company  did  not 
build  its  "great  office"  building  with  "cash  and  without  mortgage  or  lien," 
and  clearly  indicates  that  its  great  earning  power  is  far  below  "a  quarter 
to  a  third  of  a  million  dollars  per  annum."  The  fact  is,  the  Lewis  Pub- 
lishing Company  has  long  been  doing  business  on  credit,  and  so  has  every 
other  company  with  which  E.  G.  Lewis  has  been  associated.  The  only 
companies  with  which  he  has  been  connected  which  have  been  able  to  meet 
expenses,  independent  of  assistance,  are  the  World's  Fair  Contest  Com- 
pany (a  lottery,  pure  and  simple),  and  the  Lewis  Publishing  Company, 
during  the  year  1904',  and  both  these  companies  did  business  on  borrowed 
money.  Lewis  states  that  he  was  enabled  to  build  up  the  Lewis  Publish- 
ing Company  from  a  capital  of  .$1.25  to  its  present  earning  power  of  from 
a  quarter  to  one-third  of  a  million  dollars  a  year  by  borrowing  at  needed 
times  approximately  two  million  dollars.  (See  his  answer  to  question  28, 
dated  April  4,  1905.)  All  the  other  companies  were  in  debt  in  1904 
and  are  in  debt  today;  hence,  the  necessity  for  organizing  the  People's 
United  States  Bank,  in  order  to  have  ready  cash  from  which  to  supply 
the  harassing  needs  of  the  struggling  companies.  The  actual  earning 
power  of  the  Lewis  Publishing  Company  is  certainly  much  less  than  he 
attributes  to  it;  but,  in  his  system  of  shifting  funds  from  one  to  another, 
making  the  strong  help  the  weak,  it  is  difficult  to  determine  what  its 
earning  power   really  is. 

The  function  is  liere  assumed  to  be  inherent  in  the  office  of  post- 
office  inspectors  to  sit  in  judgment  upon  the  values  and  methods  of 
accounting  of  large  business  enterprises,  and,  on  their  unaided 
judgment,  to  make  deductions  for  the  guidance  of  a  great  adminis- 
trative bureau.  Certified  public  accountants  have  testified  that  the 
Lewis  Publishing  Company  was,  in  fact,  highly  prosperous  during 
the  period  in  question.  Duly  qualified  experts  have  under  oath  as- 
sessed the  franchises  of  the  two  publications  which  the  inspectors 
stigmatize  as  "purely  theoretical  assets"  as  in  excess  of  the  sums 
at  which  they  were  carried  on  Lewis'  books  of  account.  By  what 
license  do  they — an  ex-bookkeeper  of  a  coal  company,  a  former 
publisher  of  a  country  weekly  and  a  fledgling  lawyer — presume  to 
embody  in  an  official  report  these  baseless  slanders?  By  virtue, 
forsooth,  of  a  commission  whereby  they  stand  in  the  place  of  and 
embody  the  authority  delegated  by  the  people  to  the  President,  and 
by  him  to  the  postmaster-general,  of  the  United  States. 

By  order  of  Lewis,  two  statements  were  furnished  the  inspectors 
by  Will   Ahrens,  bookkeeper  of  the   Lewis   Publishing   Company. 


THE  DREYFUS  CASE  OF  AMERICA  427 

The  first  showed  the  consolidated  receipts  of  the  company  for  the 
first  quarter  of  1905.  The  second,  the  same  statement  of  receipts 
and  expenses  for  each  month  separately.  Upon  a  comparison  of 
these  the  inspectors  make  out  a  difference  in  the  two  reports  of 
$56.85  upon  the  side  of  earnings  and  $1,020.85  upon  the  side  of 
expenses.  The  former  item  was  shown  by  Lewis  at  the  Hearing 
before  Goodwin  to  have  been  an  item  of  interest  earned  during  that 
period.  The  latter  was  due  to  an  error  in  addition  by  Inspector 
Sullivan,  which,  according  to  the  testimony  of  Inspector  Stice, 
Sullivan  freely  acknowledged  on  the  same  occasion.  On  examination 
Inspector  Fulton  admitted  that  he  did  not  detect  this  error.  Nor, 
he  said,  did  he  consider  it  any  part  of  his  duty  as  inspector-in- 
charge  to  verify  the  additions  or  other  statements  of  the  inspectors' 
reports.  This  difference  of  one  thousand  dollars  between  two  state- 
ments furnished  the  inspectors  was  published  in  the  Post-Dispatch 
as  among  the  items  which  aroused  their  suspicions.  The  newspaper- 
reading  public  had  no  subsequent  knowledge  that  this  charge  was 
due  to  the  inspectors'  error  in  a  very  simple  addition. 

The  inspectors  next  comment  on  the  fact  that  the  cosr  of  adver- 
tising the  Woman's  Magazine  and  Woman's  Farm  Journal  in  other 
publications  was  not  charged  to  expenses  during  the  quarter  in 
question,  and  if  so  charged,  would  have  reduced  the  earnings  by 
that  amount.  This  charge  in  itself  betrays  total  ignorance  of  the 
publishing  business.  The  cost  of  advertising  done  during  the  quar- 
ter preceding  a  financial  statement  would  be  ordinarily  regarded  as 
an  asset  or  investment  rather  than  as  an  expense. 

The  report  next  discusses  the  loans  of  the  bank  to  the  Lewis 
interests,  to  the  total  amount  of  $4'1 1,203.18,  upon  which  this  com- 
ment is  made; 

Thus,  before  the  increase  in  capital  stock  from  one  million  to  two 
and  a  half  million  dollars,  E.  G.  Lewis,  for  himself  and  the  companies  in 
which  he  is  financially  interested,  had  taken  from  the  bank  $411,203.18 
of  the  half  million  dollars  paid  in  as  capital  stock  by  the  original  sub- 
scribers to  the  bank  stock.  This  action  was  in  direct  violation  of  that 
part  of  the  State  banking  law  under  which  the  bank  was  incorporated, 
which   reads : 

"No  officer  or  director  of  the  bank  shall  be  permitted  to  borrow  of  the 
bank  in  excess  of  ten  per  cent  of  the  capital  and  surplus  without  the 
consent  of  a  majority  of  the  other  directors  being  first  obtained  at  a 
regular  meeting  and  made  a  matter  of  record.  *  *  *  No  bank  shall  lend 
its  money  to  any  individual  or  company,  directly  or  indirectly,  or  permit 
them  to  become  indebted  or  liable  to  it  to  an  amount  exceeding  twentf- 
five  per  cent  of  its  capital  stock  actually  paid  in." 

The  statement  of  the  inspectors  that  the  loans  of  the  bank  to 
Lewis  enterprises  were  in  direct  violation  of  the  banking  laws  of 
Missouri  is  absolutely  false,  as  inspection  of  the  minutes  of  the 
bank  will  most  conclusively  demonstrate.  These  inspectors  were  not 
lawyers,  nor  did  they  possess  a  knowledge  of  the  minutes  of  the 
directors,  upon  which  to  base  either  an  individual  judgment  or  an 


428  THE  SIEGE  OF  UNIVERSITY  CITY 

inquiry  of  counsel.      They   simply   guessed   that  these   loans   were 
lawless^  and  their   guess  was   wrong. 

From  the  foregoing  statements  the  inspectors  deduce  the  follow- 
ing conclusions: 

Therefore,  Edward  G.  Lewis,  having  devised  and  intending  to  devise  a 
scheme  or  artifice  to  defraud  the  subscribers  to  the  capital  stock  of  the 
People's  United  States  Bank,  which  scheme  then  and  there  consisted  in 
obtaining  moner  subscriptions  for  stock  in  said  bank,  hj  exaggerations 
and  misrepresentations  of  the  security,  safety,  and  profits  to  accrue  to 
said  subscribers  of  stock,  and  promising  to  put  in  of  his  own  funds  dollar 
for  dollar  for  every  subscriber,  and  then  organizing  said  bank  so  that 
Edward  G.  Lewis  could  and  would  control  the  same  without  the  voice  of 
its  stockholders  therein,  and  use  the  funds  subscribed,  or  a  large  portion 
thereof,  for  his  own  purposes  and  benefits,  by  use  of  the  Postolfice  estab- 
lishment of  the  United  States,  in  furtherance  of  such  scheme  did  deposit 
in  the  United  States  mails  at  Winner  Station,  St.  Louis,  Mo.,  certain 
letters,  pamphlets,  magazines,  circulars,  and  books,  representing  that  said 
bank  would  be  one  of  the  greatest  organizations  of  the  world;  that  its 
capital  stock  would  be  worth  several  times  par  the  day  the  charter  was 
granted;  that  its  expenses  would  be  only  fifteen  or  twenty  per  cent  of 
banks  doing  a  like  amount  of  business,  while  its  profits  would  be  many 
times  greater;  that,  from  the  certified  check  system  alone  the  earnings 
*'will  be  nearly  a  quarter  of  a  million  dollars  per  year,"  and  that  Lewis 
would  subscribe  for  a  million  dollars  of  the  stock  and  "every  dollar  of 
my  profit  will  go  to  increase  the  reserve  of  the  bank  each  year,"  and  it 
(the  bank)  "will  be  the  financial  guardian  of  a  milion  homes,"  and  as  to 
its  safety  and  security  he  stated  five  propositions: 

First.  The  bank  is  governed  by  officers  and  directors,  but  they  can  not 
loan  its  funds  to  anyone  and  can  not  borrow  from  it  themselves. 

Second.  By  our  system,  its  loans  are  passed  on,  and  the  greatest  part 
of  them  are  guaranteed  and  secured  by  other  banks  with  the  best  col- 
lateral. 

Third.  The  entire  capital  of  five  million  dollars  will  be  invested  ex- 
clusively in  Government  bonds  and  State  bonds  and  the  most  gilt-edged 
securities. 

Fourth.     *  *  * 

Fifth.  My  own  stockholdings  of  one  million  dollars  (one-fifth  of  the 
capital)  are  trusteed  so  that  their  entire  earnings  go  into  the  reserve 
fund  of  the  bank,  thereby  adding  each  year  greatly  to  the  value  of  youi 
stock   holdings. 

The  inspectors  then  declare  that  these  and  sundry  other  proposi- 
tions which  they  attribute  to  Lewis,  are  untrue.  The  language  used 
has  been  quoted,  in  substance,  in  Betts'  story  from  the  Post-Dis- 
patch. Next  is  printed  the  proxy  which  has  been  previously  quoted 
from  the  Post-Dispatch.     Commenting  on  this,  the  inspectors  say: 

On  April  8,  1905,  Mr.  F.  V.  Putnam,  cashier  of  said  bank,  stated  to 
Inspectors  Fulton,  Sullivan  and  Stice,  in  the  presence  of  E.  G.  Lewis, 
that  4,381  shares  of  the  increased  capital  stock  had  been  issued  and  in 
every  instance  the  stockholders  had  signed  the  foregoing  proxy  and 
waiver   before   the  certificate  of  stock  was   issued. 

The  statements  made  under  oath  at  Tewis'  examination  by  the 
secretary  of  state  in  this  connection  are  here  totally  ignored. 

The  inspectors  thus  characterize  the  collateral  loan  feature  of 
the  bank: 


THE  DREYFUS  CASE  OF  AMERICA  429 

It  is  untrue  that  the  great  profits,  which  Lewis  represented  in  litera- 
ture sent  through  the  mails  would  accrue  to  the  banlc,  could  possibly  ac- 
crue to  the  bank  as  represented,  and  Lewis,  recognizing  this  fact,  devoted 
a  long  article  in  the  May,  1905,  Woman's  Magazine  to  a  scheme  of 
turning  the  bank  into  a  pawnshop  and  accumulating  riches  out  of  the 
diamonds,  gold  watches,  and  gold  bullion  pawned  to  the  bank  on  loans  at 
eight  per  cent  interest,  and  melting  up  the  gold  watches  and  bullion 
pawned  as  pledges  for  loans  and  forfeited  to  the  bank. 

No  form  of  language  could  convey  a  notion  more  preposterous 
or  more  diametrically  opposed  to  probability  than  that  I^ewis' 
motive  in  copying  the  collateral  loan  feature  of  such  institutions  as 
the  Mont  de  Piete  of  France  (of  which,  presumably,  the  inspectors 
liad  never  heard)  was  the  recognition  by  him  that  the  great  profits 
he  anticipated  would  not  accrue. 

The  proceeding  whereby  Lewis  placed  at  interest  the  funds  of 
the  subscribers  which  were  in  his  hands  and  credited  the  interest 
earned  pro  rata  to  the  various  subscribers  is  thus  characterized  by 
the  inspectors: 

Special  attention  is  invited  to  correspondence  of  E.  G.  Lewis  with  Miss 
F.  Ellen  Ayars,  New  Richland,  Minn.,  rural  route  No.  2,  which  shows 
that  under  date  of  September  17,  1904,  Lewis  mailed  her  a  receipt  for 
one  dollar,  "for  a  corresponding  amount  of  shares  of  stock  in  a  People's 
Mail  Bank  or  Trust  Company"  (envelope  enclosing  same  being  post- 
marked September  30,  1904),  and  under  date  of  December  9,  1904,  he 
sends  demand  for  an  instalment  of  twenty-four  dollars  on  her  subscrip- 
tion of  twenty-five  dollars  to  stock  of  People's  Postal  Bank,  to  be  sent 
not  later  than  December  20,  1904.  It  appears  that  she  did  not  remit  the 
twenty-four  dollars,  and  on  March  2,  1905,  he  mails  her  a  passbook,  with 
a  credit  of  one  cent  dividend  on  her  one  dollar  remittance  for  stock. 
He  was  therefore  paying  a  dividend  of  about  two  per  cent  per  annum 
at  a  time  when  the  bank  had  not  earned  a  dividend  and  was  practically 
insolvent  from  the  misuse  of  funds  received  for  capital  stock. 

This  conclusion  is  not  only  pure  guesswork.  It  is  totally  errone- 
ous and  can  be  justified  upon  no  hypothesis  whatever. 

Lewis'  attitude  in  relation  to  the  investigation  is  set  forth  as 
follows : 

The  investigation  of  this  case,  which,  at  the  beginning  was  apparently 
courted  by  E.  G.  Lewis,  was  afterwards  much  hampered  and  delayed  by 
liim  when  he  found  we  desired  to  verify  every  account  and  representation, 
and  on  the  21st  ultimo,  when  Inspectors  Sullivan  and  Stice  called  to  verify 
the  credits  to  which  Lewis  was  entitled  to  returns  of  remittances  for 
capital  stock,  cancelations,  withdrawals,  alleged  duplicates,  etc.,  found  on 
original  records  of  subscriptions  for  stock,  Lewis  practically  informed  us 
that  we  had  "gone  the  limit"  in  the  investigation;  that  his  girl  clerks 
were  scared  to  death  every  time  the  inspectors  or  state  bank-examiners 
visited  his  oif.ce,  and  were  circulating  it  over  the  city  that  the  bank  was 
in  a  bad  way  and  was  likely  to  go  out  of  business;  and  that  Inspector-in- 
Charge  Fulton's  letters  sent  out  had  cost  him  over  eight  thousand  dollars 
in  withdrawals  of  money  sent  in  for  stock  or  deposits.  He  then  proposed 
that  we  leave  with  him  a  list  of  the  credits  which  we  had  found,  and  he 
would  withdraw  all  papers  relating  to  same,  and  then  allow  us  to  verify 
them.     We  have  not  yet  had  that  opportunity. 

The  net  conclusion  of  the  inspectors  is  conveyed  in  the  concluding 
paragraph  of  the  report  as  follows: 


480  THE  SIEGE  OF  UNIVERSITY  CITY 

We  have  already  demonstrated  that  a  large  portion  of  the  funds 
secured  by  E.  G.  Lewis  for  stock  of  the  People's  United  States  Bank 
through  misrepresentations  and  exaggerations  sent  through  the  mails,  were 
misappropriated  and  used  by  Lewis,  and  believe  if  the  bank  be  continued 
and  increases  of  capital  stock  thereto  be  granted  from  time  to  time, 
enabling  him  to  have  excuse  for  additional  solicitations  of  more  money, 
either  as  additional  capital  stock  or  deposits,  that  great  and  enormous 
frauds  will  continue  to  be  perpetrated  by  said  Lewis,  and  we,  therefore, 
recommend  that  a  fraud  order  be  issued  against  the  People's  United  States 
Bank,  its  officers  and  agents  as  such  at  St.  Louis,  Mo.  We  will  submit 
the  evidence  and  facts  obtahied  as  early  as  practicable  to  the  United 
States  attorney  for  the  eastern  district  of  Missouri,  with  a  view  to  crim- 
inal prosecution  for  using  the  mails  in  furtherance  of  a  scheme  to  defraud. 
Very  respectfully, 

(Signed)         Wji.    T.    Sullivan, 
J.  L.  Stice, 
Postoffice   Inspectors. 
To  Mr.  Robert  M.  Fulton, 

Inspector-in-Charge,   St.   Louis,  Mo. 

May    17,   1905. 
Report  examined,  approved   and   forwarded  to  chief  inspector. 

R.  M.  Fulton, 
Postoffice   Inspector-in-Charge. 

madden's  opinion. 

Former  Third  Assistant  Postmaster-General  Madden  thus  com- 
ments on  the  above  report,  in  his  statement  to  the  Ashbrook  Commit- 
tee as  attorney-in-fact  for  the  Lewis  Publishing  Company: 

The  first  part  of  the  report  is  devoted  to  a  "brief  history  of  Mr.  E.  G. 
Lewis's  career  for  the  last  ten  years."  It  then  goes  on  to  make  liberal 
quotations  from  the  literature  alleged  to  have  been  sent  out  by  Lewis  in 
llie  promotion  of  the  bank,  and  arrives  at  conclusions  as  to  the  fraudu- 
lent intent  tliereof.  This  is  followed  by  statements  of  the  bank's  financial 
affairs  as  disclosed  in  the  inspectors'  investigation  of  its  books.  The  report 
closes  with  a  recommendation  that  a  fraud  order  be  issued  against  the 
bank  and  its  officers.  It  tlien  says  that  the  matters  reported  upon  will  be 
laid  before  the  United  States  district  attorney  with  a  "view  to  criminal 
prosecution  for  using  the  mails  in  the  furtherance  of  a  scheme  to  defraud." 

The  report  does  not  state  or  refer  to  any  statute  which  authorizes  such 
an  investigation.  It  does  not  state  that  any  person  had  complained  of 
having  been  defrauded.  It  does  not  state  what  bearing  the  past  history 
of  Mr.  Lewis  had  upon  the  right  of  the  bank  to  use  the  mails. 

I  had  fifteen  years'  experience  in  the  postal  service  and  I  am  unable  to 
recall  an  instance  where  any  otlier  l<ank  in  the  United  States,  and  es- 
pecially a  State  institution,  was  so  investigated  and  reported  upon  to  the 
postmaster-general.  I  have  searched  in  vain  for  a  statute  which  author- 
ized any  such  proceeding. 


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CHAPTER  XIX. 
ORDER  NUMBER  TEN. 

The  Fraud  Order  Process — The  Citation  to  Washington — The 
Lawrence  Memorandum — Statement  of  General  Shields 
— The    Response    of   the    Bank — Goodwin's    Report   to 
CoRTELYou — Goodwin     Under    the    Probe — After    the 
Hearing — Order  Number  Ten. 
One  of  the  grievances  that  led  our  forefathers  to  rebel  against 
the  Throne  of  England  was  the  authority  claimed  by  King  George 
and  his  ministers  to  hale  them  three  thousand  miles  across  the  seas 
to  stand  trial  at  the  seat  of  Imperial  power.     The  courts  of  England 
are  surrounded  with  all  the  safeguards  of  English  liberty,  wrested 
from  King  John  in  Magna  Charta  and  interwoven  in  the  very  warp 
and  woof  of  English  law.     The  Colonists  were  guaranteed  trial  by 
a  jury  of  their  peers.     They  had  the  right  to  a  presentment  of  the 
accusation  against  them.      They  could  claim  the   right  to   be  con- 
fronted in  open  court  by  their  accusers.     They  demanded  more! 
They  insisted  upon  an  open  and  speedy  trial  at  or  near  the  locality 
of  the  supposed  offense.     They  denied  the  privilege  of  the  Majesty 
of  England  to  subject  them  to  the  expense  of  the  distant  journey 
over  seas,  the  cost  of  transporting  witnesses  for  their  defense,  and 
the   dangers  of   confronting  a   jury   unfamiliar   with   the  customs, 
modes  of  thought  and  state  of  public  sentiment  and  opinion  surround- 
ing the  accused.     Let  us  see  how  well  we  of  the  present  generation 
are  preserving  the  traditions  of  liberty  which  we  have  received  as 
a  priceless  heritage  from  the  fathers. 

THE  FRAUD  ORDER  PROCESS. 

The  law  which  grants  the  postmaster-general  the  right  to  issue 
fraud  orders  does  not  prescribe  that  the  accused  shall  have  any  trial 
whatever.  The  postmaster-general  may  act  upon  information  fur- 
nished him  by  the  inspectors,  if  it  is  "satisfactory  to  him,"  without 
attempt  at  verification  and  without  giving  the  accused  any  oppor- 
tunity to  set  up  his  defense.  There  has  been  no  parallel  in  history 
to  the  power  thus  lodged  in  the  postmaster-general  of  the  United 
States,  except  such  curiosities  of  absolute  despotism  as  the  infamous 
lettre  de  cachet  ;*  or  the  absolute  license  over  the  life  and  property 
of  the  subject  which  is  the  privilege  of  the  Asiatic  despot. 

This  extraordinary  power  of  the  postmaster-general  of  the  United 
States  to  brand  a  man  as  a  fraud,  and  to  destroy  his  enterprises 


*This  was   an   executive   order   whereby   the   French   Louis'   without  trial   or  hearing 
of  any  sort,  were  wont  to  throw  men  into  political  prisons  by  the  mere  stroke  of  a  pen, 

433 


434  THE  SIEGE  OF  UNIVERSITY  CITY 

without  trial  and  without  warning,  is  among  the  divisions  of  his 
authority  which  has  been  delegated  to  a  subordinate.  This  func- 
tion is  attached  to  the  office  of  the  assistant  attorney-general  for 
the  Postoffice  Department.  To  provide  against  being  misled  into 
oppression  or  injustice  by  an  interested  or  ignorant  informer,  it  has 
become  the  practice  of  that  officer  to  give  a  hearing  to  the  accused. 
A  citation  is  first  served  upon  persons  charged  by  postoffice  inspec- 
tors and  others,  with  the  fraudulent  misuse  of  the  mails.  This 
directs  them  to  appear  at  the  seat  of  Government,  and  show  cause 
why  a  fraud  order  should  not  be  issued  against  them. 

This  monstrous  power  has  been,  so  far  as  the  public  is  aware, 
usually  employed  with  intelligent  caution.  It  has  been  directed  for 
the  most  part  against  the  meanest  and  most  injurious  class  of  frauds. 
These  facts  have  served  to  blind  the  eyes  of  the  easy  going,  toler- 
ant masses  of  the  American  people  to  the  possibilities  of  injustice 
and  oppression  that  thus  obtain.  For  the  accused,  within  the  wide 
latitude  of  the  discretion  of  the  postmaster-general,  has  no  rights 
that  the  assistant  attorney-general  for  the  postoffice  is  bound  to  re- 
spect. So  perverted  is  this  method  of  procedure  that  it  is  even 
deemed  a  privilege  for  the  accused  to  be  haled  to  Washington !  The 
opportunity  of  presenting  his  defense  is  not  a  right,  but  a  favor !  It 
may  be  withheld  at  the  pleasure  of  the  official  in  charge.  The  ex- 
pense to  which  a  man  is  thus  subjected  in  comparison  to  that  of  a 
hearing  before  a  local  magistrate  appears  to  be  utterly  disregarded. 
The  frequent  impossibility  of  bringing  the  most  important  witnesses 
thither,  or  the  hardships  to  which  all  concerned  may  be  subjected 
in  leaving  their  homes  and  business  for  such  purposes,  are  over- 
looked. The  possibility  of  ruin  from  the  scandal  of  such  citation 
is  forgotten.  Nothing  is  weighed  in  the  count,  except  the  con- 
venience of  the  Federal  official,  at  whose  mercy  the  citizen  is  thus 
placed. 

The  hearing  itself  under  such  circumstances  can  scarcely  be  other 
than  a  farce.  The  presiding  officer  is  not  part  of  the  judicial  sys- 
tem of  the  Nation.  He  is  bound  by  no  constitutional  safeguards. 
He  is  restricted  by  no  regulations  of  procedure.  He  is  outside  the 
constitutional  Bill  of  Rights.  He  is  accountable  to  no  one  except 
his  immediate  superior.  He  may  admit  such  evidence  as  he  sees 
fit,  and  exclude  that  which  he  pleases.  He  is  in  his  single  person 
both  judge  and  jury.  And  by  one  of  his  assistants,  he  is  the  prose- 
cuting officer  as  well.  He  listens  to  such  defense  as  tlie  accused  may 
see  fit  to  make.  He  asks  such  questions  as  his  sense  of  justice  or 
his  curiosity  may  dictate.  He  weighs  the  matter  as  much  or  as 
little  as  he  will.  He  forms  his  own  decisions  upon  considerations 
known  only  to  himself.  Finally,  he  dismisses  the  case  or  recom- 
mends to  the  postmaster-general  that  a  fraud  order  shall  be  issued. 
His  recommendations  are  commonly  adopted  by  his  superior  as  a 
matter  of  routine. 


THE  DREYFUS  CASE  OF  AMERICA  436 

A  sinister  feature  of  this  entire  process  is  the  fact  that  the  in- 
formation upon  which  the  assistant  attorney-general  for  the  post- 
office  acts  as  to  the  fraud  order,  comes  as  a  secret  report  of  Federal 
spies  of  the  postoffice  inspection  service.  It  is  one  of  the  fixed 
principles  of  the  Department,  that  this  report  must  not  be  dis- 
closed to  the  accused.  The  only  argument  advanced  in  support  of 
this  policy,  which  is  totally  at  variance  with  a  fundamental  principle 
of  English  jurisprudence,  is  that  the  names  of  informers  who  under 
pledge  of  secrecy  have  laid  accusations  against  men  before  the  post- 
office  inspectors  must  not  be  revealed.  The  citation  served  upon 
the  accused  is  supposed  to  contain  the  substance  of  the  charge. 
But  the  names  of  the  accusers  are  withheld.  Neither  the  informer 
nor  the  inspector  is  subjected  to  cross-examination.  The  language 
in  which  the  charges  are  clothed  is  totally  concealed.  Thus,  all 
evidence  of  prejudice,  bias,  malice,  is  wholly  hidden.  All  the  finer 
evidences  of  meaning,  which  may  be  read  between  the  lines  of 
written  documents,  are  lost  to  observation.  The  accused  and  his 
counsel  are  practically  fighting  in  the  dark. 

A  still  more  questionable  feature  of  the  fraud  order  process  is 
the  fact  that  the  inspectors  who  bring  the  accusation  are  members 
of  the  same  service  as  the  assistant  attorney-general  who  sits  in 
judgment.  They  are  often  personally  known  to  him.  They  belong 
to  the  same  official  world  in  which  he  temporarily  moves.  They 
profit  by  the  subtle  freemasonry  of  official  life,  which  enables  those 
within  the  circle  of  its  charm  to  obtain  the  ear  of  persons  in  author- 
ity at  will.  Let  any  man  be  accosted  by  two  persons  on  the  same 
subject,  of  whom  one  is  known  to  him  personally  or  officially,  and 
the  other  is  a  total  stranger:  to  whom  will  he  listen  and  give  heed? 
Let  the  postoffice  inspectors  recommend  a  fraud  order  in  their 
secret  reports ;  let  them  have  access  to  the  ear  of  the  assistant  attor- 
ney-general for  the  postoffice;  let  them  confirm  their  official  findings 
by  the  weight  of  their  personal  influence ;  in  such  a  case  the  defense 
of  the  citizen  must  be  strong,  indeed,  if  he  can  break  down  the 
barrier  of  prejudice  thus  built  up. 

THE   CITATION  TO  WASHINGTON. 

The  report  of  the  inspectors  reached  Washington  on  May  19, 
addressed  to  Vickery,  chief  postoffice  inspector.  Under  the  ordinary 
routine  it  would  be  referred  by  him  without  comment  to  the  office 
of  the  assistant  attorney-general  for  the  Postoffice  Department,  then 
as  now,  Russell  P.  Goodwin.  Goodwin  appears  to  have  turned 
the  report  over  to  his  assistant,  E.  W.  Lawrence.  The  testimony 
of  Betts  would  indicate  that  Fulton  followed  immediately  and  re- 
mained in  consultation  with  Vickery  and  Goodwin  until  the  citation 
under  date  of  May  25  was  issued.  During  this  interval  a  short 
memorandum  of  the  inspectors'  charges  was  condensed  from  their 
report  by  Lawrence,  and  forwarded  with  the  citation.  As  this  latter 
is  brief,  it  is  here  reproduced  as  follows: 


486  THE  SIEGE  OF  UNIVERSITY  CITY 

Office  of  the  Assistant   Attorney-General   for  the 
Postoffice   Department,   Washington,   May   25, 
1905. 
The  People's  United  States  Bank  and  E.  O.  Lewis, 
St.  Louis,  Mo.: 
Inclosed   herewith   is   a   memorandum   outlining   certain   charges,   which 
by    direction    of    the    postmaster-general,    are    under    examination    in    this 
office,  to  the  effect  that  you  are  engaged  in  conducthig  a  scheme  or  device 
for  obtaining  money  or  property  through  the  mails  by  means  of  false  or 
fraudulent  pretenses,  representations,  or  promises  in  violation  of  sections 
39x?9  and  4011  of  the  Revised  Statutes  as  amended,  a  copy  of  which  is  also 
sent  herein.     It  will  be   observed   that  these   statutes   authorize   the   post- 
master-general tc  prohibit  the  delivery  of  mail  and  the  payment  of  money 
orders   addressed   to   or   drawn   to  the  order  of   any   person   or   company 
found  to  be  using  the  mails  in  the  operation  of  a  scheme  or  device  of  this 
character. 

It  is  desired  that  you  make  reply  to  the  charges  set  forth  in  this  memo- 
randum, and  June  16,  1905,  is  designated  as  the  day  on  which  the  case 
will  be  considered.  Your  reply  must  be  in  writing.  It  may  be  forwarded 
by  mail  or  you  may  present  it  in  person  or  by  attorney  at  that  date  and 
supplement  the  same  by  oral  argument.  Should  you  fail  to  make  answer 
by  the  date  named,  the  case  will  be  considered  and  disposed  of  in  your 
absence. 

Very  respectfully, 

R.   P.   Goodwin, 
Assistant    Attorney-General    for    the    Postoffice    Department. 

THE    LAWRENCE    MEMORANDUM. 

The  memorandum  of  Lawrence  opens  as  follows: 
E.  G.  Lewis,  operating  under  the  name  of  The  People's  United  States 
Bank  has  been  for  over  a  year,  and  is  now,  engaged  in  selling  shares  of 
stock  in  the  corporation  organized  by  him,  named  The  People's  United 
States  Bank.  He  is  effecting  sales  by  means  of  false  and  fraudulent 
representations  and  is  receiving  large  sums  of  money  through  the  mails. 
Among  the  false  and  fraudulent  representations  and  promises  which  Mr. 
Lewis  has  made  to  obtain  this  money,  are  the  following: 

The  next  twenty-nine  paragraphs,  comprising  the  bulk  of  the 
document,  are  brief  excerpts  from  Lewis'  promotion  literature  quoted 
by  Lawrence  from  the  report  of  the  inspectors.  These  are  summed 
up  by  the  following  comment:  "It  is  charged  that  the  above 
quoted  statements  are  false  and  fraudulent  in  every  particular."  The 
memorandum  goes  on: 

During  the  last  ten  years  Mr.  Lewis  has  been  identified  with  the  fol- 
lowing enterprises:  *  *  *  Many  of  these  schemes  have  been  failures, 
the  practices  of  Lewis  in  conducting  them  have  been  questionable  and 
some  of  the  schemes  have  been  fraudulent. 

The  remaining  nine  paragraplis  are  a  brief  summing  up  of 
fifteen  specific  charges  culled  from  the  inspectors'  report.  The 
memorandum  concludes:  "I  recommend  that  the  People's  United 
States  Bank  and  E.  G.  Lewis  should  be  cited  to  show  cause  why 
fraud  order  should  not  be  issued  against  them." 

The   entire   memorandum    comprises    no    more    than   about    four 


*Here  follows  a  list  inclii<linn;  Lewis'  early  ventures  and  enumerating  also  an 
electric  railroad  company  unnamed,  concerning  which  L,ewis  has  no  recollection  and 
there  is  no  other  information  obtainable. 


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THE  DREYFUS  CASE  OF  AMERICA  439 

thousand  words  as  against  about  sixteen  thousand  words  employed 
by  the  inspectors.  The  intemperate  language  of  prejudice  and 
passion  in  which  the  inspectors'  charges  were  couched  is  decently 
kept  from  view.  By  no  stretch  of  imagination  could  the  reader 
of  this  memorandum  conceive  the  bitterness  and  hostility  that 
characterized  the  original  document,  or  the  force,  extent  and  par- 
ticularity of  its  contents. 

The  officials  of  the  bank  thus  placed  upon  their  defense,  but 
without  adequate  knowledge  of  the  charges  against  them,  made 
ready  their  response  as  best  they  could.  They  presented  themselves 
on  the  prescribed  date  for  the  hearing  before  Goodwin.  The  infor- 
mal nature  of  this  proceeding  is  seen  from  the  fact  that  no  official 
stenographic  report  such  as  is  customary  in  courts  of  justice  was 
taken.  The  testimony  of  Goodwin  on  this  head  at  Lewis'  trial  is 
as  follows: 

I  made  some  inquiries  of  Mr.  Lewis  at  the  time  of  the  hearing,  but  I 
am  not  now  certain  what  statements  were  made  by  him  in  response.  No 
record  was  kept  by  me  or  under  my  direction  of  these  proceedings  which 
would  show  all  of  Mr,  Lewis'  statements.  There  was  a  stenographer  em- 
ployed by  him  to  take  the  testimony,  who  was  there  during  the  entire 
hearing.  There  was  also  a  stenographer  whom  I  understand  to  have  been 
a  clerk  in  the  Postoffice  Department,  present  part  of  the  time,  but  not 
all  of  the  time.  No  complete,  accurate  record  of  all  Lewis'  matters,  or 
matters  urged  in  his  defense,  was  kept  by  me. 

This  statement  was  corroborated  by  that  of  Goodwin's  assistant, 
Lawrence,  who  testified  as  follows: 

I  have  never  seen  a  verbatim  report  in  possession  of  the  Government 
officials  concerning  that  hearing,  and  no  such  official  has  ever  told  me 
they  had  such  a  report.  There  was  no  stenographer  representing  the 
Government.  A  Government  stenographer  was  present,  but  I  understand 
he  never  wrote  out  his  minutes.  He  relied  largely  on  the  stenographer 
whom  Mr.  Lewis  had  there.  That  stenographer  promised  to  give  him  a 
transcript  of  the  evidence.  I  understand  that  the  transcript  was  never 
written  up.  I  have  never  seen  a  transcript  of  the  proceedings,  nor  a 
transcript  of  the  argument  of  counsel,  except  a  written  response  which 
was  submitted. 

The  stenographer  who  was  present  on  behalf  of  the  officials  of 
the  bank  had  so  much  difficulty  with  his  notes  that  a  dispute  after- 
wards arose  as  to  his  compensation.  His  notes  were  never  written 
up,  with  the  exception  of  the  remarks  of  counsel.  An  imperfect 
transcript  of  these  is  available.  The  vice  of  such  a  proceeding 
appears  from  the  fact  that  the  verbal  evidence  of  Lewis  in  his  own 
defense  was  not  before  the  attorney-general  when  his  opinion  as  to 
the  legality  of  the  proposed  fraud  order  was  requested.  Neither 
was  its  force  felt  by  the  mind  of  the  postmaster-general  in  arriving 
at  his  ultimate  decision.  The  absence  of  any  official  record  of  the 
hearings  permitted  Goodwin  and  Lawrence,  at  Lewis'  trial,  to  de- 
pend wholly  upon  their  recollection  as  to  the  latter's  statements. 
Naturally  enough  the  circumstances  which  seemed  to  justify  their 
course  of  action  were  green  to  memory,  whereas  the  particulars  of 
Lewis'  defense  had  passed  almost  entirely  out  of  mind.    On  the  occa- 


440  THE  SIEGE  OF  UNIVERSITY  CITY 

sion  of  Lewis'  first  trial,  in  November,  1907,  Goodwin,  after  stat- 
ing his  position  and  the  fact  that  he  had  held  that  office  "three 
years  last  May,"  responded  specifically  and  without  hesitation  to  a 
series  of  questions  on  the  part  of  the  Government  attorney,  designed 
to  substantiate  the  charges  upon  which  the  prosecution  was  based. 
On  cross-examination  for  the  defense  he  testified  in  substance  as 
follows ; 

I  am  a  member  of  the  bar.  The  proceeding  in  -which  Mr.  Lewis  made 
these  statements  was  a  citation  issued  by  me  as  attorney-general  for  the 
Postoffice  Department  to  show  cause  why  a  fraud  order  should  not  issue. 
The  citation  was  issued  because  of  a  report  of  the  inspectors  which  con- 
tained the  charges  against  Mr.  Lewis.  It  was  my  dutj^  to  recommend  to 
the  postmaster-general  his  actions.  I  was  exercising  what  lawyers  call  a 
quasi  judicial  function  to  show  whether  an  order  should  issue  cutting 
off  Mr.  Lewis  from  the  benefit  of  the  privilege  of  the  mails.  That  citation 
also  included  the  banlc  which  was  in  theory  and  law  a  separate  entity 
from  Mr.  Lewis. 

I  do  not  remember  that  Mr.  Lewis  said  he  had  advanced  money  for  the 
organization  expenses  other  than  the  note  for  one  hundred  and  forty-six 
thousand  dollars,  but  I  would  not  say  that  he  did  not.  I  understood  the 
bank  was  already  organized.  I  do  not  think  he  said  it  was  in  process  of 
organization.  He  did  not  tell  me  he  was  arranging  his  affairs  so  as  to 
contribute  the  amount  of  money  that  he  had  already  subscribed  to  the 
stock  when  the  capital  of  the  bank  was  increased  to  five  million  dollars.  I 
do  not  think  he  told  me  the  stock  was  to  be  increased  to  five  million 
dollars.  I  don't  remember  any  statement  that  he  made  in  regard  to  the 
use  of  his  own  funds  in  the  promotion  of  the  bank.  He  did  not  state  that 
he  had  arranged  the  loans  of  the  L^niversity  Heights  property  upon  bonds 
to  the  amount  of  seven  hundred  and  fifty  thousand  dollars,  or  that  the 
Metropolitan  Insurance  Company  of  New  York  had  agreed  to  take  them. 
I  think  he  said  something  about  preparing  to  issue  some  bonds,  but  I 
don't  remember  his  stating  that  the  issue  of  lionds  had  been  delayed  by  a 
mistake  in  the  lithographing.  I  do  remember  he  said  the  property  was 
worth  about  seven  hundred  and  fifty  thousand  dollars,  but,  as  to  the 
issuance  of  the  bonds,  I  think  there  was  nothing  definite. 

I  don't  remember  just  what  Mr.  Lewis  said  about  consultation  with 
prominent  bankers  in  St.  Louis  as  to  the  advisory  board.  I  challenged 
him  on  this  subject  and  asked  him  whether  he  had  created  it  or  not.  I 
am  inclined  to  think  he  did  say  something  about  having  consulted  some- 
one, but  can  not  say  positively.  Mr.  Lewis  said  he  considered  the  loans 
of  the  bank  good.  I  don't  remember  any  statement  in  regard  to  col- 
lateral. The  question  of  the  sufficiency  of  the  securities  pledged  with  the 
bank  for  these  loans  would  be  a  matter  of  some  importance,  but  not 
material — merely  incidental.  I  would  not  have  considered  the  fact  that 
the  loans  were  amply  secured  controlling  br  any  means.  Some  days  after 
the  hearing,  I  received  several  affidavits,  purporting  to  be  from  real  estate 
men  in  St.  Louis,  as  to  the  value  of  this  property.  I  am  not  sure  that 
there  were  no  affidavits  at  the  time  of  this  hearing.  It  may  be  that  there 
were  one  or  two.  I  don't  remember  any  statement  about  any  bank  in 
Chicago  offering  to  take  one  of  the  Lewis  Publishing  Company's  loans,  or 
another  bank  offering  to  take  the  real  estate  loans.  Mr.  Lewis  stated  that 
the  directors  were  prominent  business  men.  I  did  not  understand  that 
Directors  Carter,  Stephens  and  Coyle  were  connected  with  other  banks 
at  that  time.     It  may  be  that  they  were.     I  don't  remember. 

I  think  Mr.  Lewis  did  say  that  all  he  asked  was  to  be  permitted  to 
meet  the  requirements  of  the  Department  and  save  the  bank.  As  a  result 
of  the  hearing  I  recommended  to  the  postmaster-general  the  issuance  of  a 
fraud   order   against  both  Mr.   Lewis   and  the  bank. 


THE  DREYFUS  CASE  OF  AMERICA  441 

Lewis'  defense  on  his  trial,  at  which  this  testimony  was  given, 
was  conducted  by  the  same  counsel  (in  part)  as  his  defense  at  the 
hearing.  The  questions  as  to  statements  made  by  Lewis,  of  which 
Goodwin  had  no  recollection,  were  formulated  by  counsel  who  were 
guided  by  their  own  positive  knowledge  as  to  what  statements  were 
actually  made. 

STATEMENT    OF   GENERAL    SHIELDS. 

The  clearest  report  covering  the  hearing  as  a  Avhole,  as  viewed  by 
the  defense,  is  to  be  found  in  a  statement  prepared  by  Hon.  George 
H.  Shields,  of  counsel  for  the  bank,  sometime  assistant  attorney- 
general  under  President  Harrison.  This  was  prepared  under  date 
of  August  12,  1905,  at  the  request  of  Lewis.  General  Shields 
says: 

You  asked  me  to  state  what  took  place  before  Hon.  R.  P.  Goodwin, 
assistant  attorney-general  for  the  Postoffice  Department,  in  reference  to 
the  fraud  order  against  you  and  the  People's  United  States  Bank  on 
June   16,   1905. 

A  few  days  before  that  date  I  had  been  employed  to  assist  Judge 
Barclay  in  presenting  that  matter  before  the  Postoffice  Department.  On 
that  day  we  appeared  before  the  said  assistant  attorney-general.  After 
introductions  he  stated  he  was  ready  to  hear  our  reply  to  the  charges, 
a  memorandum  of  which,  signed  by  Hon.  E.  W.  Lawrence,  assistant 
attorney,  had  been  previously  sent  to  yow  and  the  bank. 

We  replied  we  were  ready  to  hear  what  the  Government  had  to  offer 
in  support  of  the  charges,  and  were  informed  that  the  report  of  the 
postoffice  inspectors  who  had  investigated  the  subject  had  been  read  by 
Hon.  R.  P-  Goodwin,  that  the  facts  stated  in  these  reports  were  assumed 
to  be  true,  and,  that  imless  they  were  satisfactorily  explained  by  the 
respondents,  action  would  be  taken  on  the  assumption  that  the  charges 
were  true. 

The  respondents  filed  answers  in  writing  to  the  charges,  under  oath, 
denying  the  same,  that  of  the  bank  being  general  and  your's  being  more 
specific  and  explanatory. 

We  insisted  that  as  the  charges  were  quasi  criminal  the  Government 
shrould  sustain  the  same  by  testimony.  The  reply  was  that  the  reports 
of  the  inspectors  were  before  the  assistant  attorney-general;  that  the  said 
reports  had  l)een  read  by  him  and  would  be  considered  as  true.  We 
asked  to  see  the  reports  of  the  inspectors  and  to  cross-examine  them  on 
their  said  reports.  This  was  refused  on  the  grounds  that  the  reports 
were  confidential. 

No  witness  or  documentary  testimony  was  offered  on  the  part  of  the 
Government.  The  respondents  were  informed  that  they  could  offer  any- 
thing they  had  in  reply  to  the  charges.  Finding  we  could  not  see  the  re- 
I»orts  or  hear  what  the  Government  relied  on  to  sustain  the  charges,  the 
respondents  then  offered  both  oral  and  documentary  testimony  on  their 
behalf.  The  counsel  for  the  respondents  were  permitted  to  argue  the 
matter  as  best  they  could,  without  knowing  what  was  contained  in  the 
very  voluminous  and  secret  report  of  the  postoffice  inspectors,  and  with- 
out the  privilege  of  examining  them  on  their  report. 

Counsel  for  the  Government  made  no  argument.  A  motion  was  made 
by  the  respondents  to  dismiss  the  proceeding  for  want  of  jurisdiction 
and  because  the  respondents  were  not  permitted  to  see  or  hear  the 
evidence  against  them,  and  on  other  grounds  violative  of  their  constitutional 
and  legal  rights.  The  assistant  attorney-general  refused  to  pass  upon  this 
motion. 


442  THE  SIEGE  OF  UNIVERSITY  CITY 

In  addition  to  Lewis'  verbal  statements  and  those  of  counsel,  the 
defense  submitted  a  written  response.  A  solemn  denial  of  the 
charges  comprising  the  Lawrence  memorandum  was  made  by  the 
reorganized  directorate  of  the  bank  and  by  Lewis  individually. 
Both  were  verified  under  oath.  In  addition,  the  respondent  entered 
the  following  protest: 

This  respondent  objects  to  the  vague  and  indefinite  nature  of  the  said 
charges  which  appear  to  be  a  summary  of  the  report  of  inspectors  of  the 
Postal  De{)artment  of  the  United  States,  which  report  has  at  no  time  here- 
tofore been  delivered  or  submitted  to  this  respondent  and  of  the  particu- 
lars whereof  he  is  ignorant,  except  from  information  derived  from  the 
alleged  publication  thereof  in  the  Post-Dispatch,  a  daily  newspaper  pub- 
lished in  the  city  of  St.  Louis,  in  its  issue  of  May  31,  1905.  This  respond- 
ent protests  against  being  required  to  answer  to  specific  allegations,  the 
precise  terms  of  which  have  not  been  exhibited  to  him  otherwise  than  as 
aforesaid. 

THE    RESPONSE   OF  THE   BANK. 

The  response  then  alleges  that  the  quotations  from  Lewis'  pro- 
motion literature  are  in  many  instances  "inaccurate,  garbled  and 
wrested  from  their  context  in  a  manner  materially  to  affect  the  mean- 
ing thereof  as  understood  by  the  reader."  The  respondent  also 
protests  that,  in  many  instances,  the  paragraphs  of  quotations  have 
been  "composed  of  materials  drawn  from  several  different  publica- 
tions at  widely  separate  intervals  of  time,  separated  from  the  con- 
text and  conveying  a  totally  different  representation  from  the  origi- 
nal." And  further,  that  these  excerpts  "constitute  a  very  small  and 
immaterial  portion  of  the  descriptive  matter  which  the  respondent 
issued,  concerning  the  formation  and  organization  of  the  bank." 
The  quotation  which  appears  in  large  type  in  the  beginning  of  the 
pamphlet  "Banking  by  Mail"  is  then  quoted  with  especial  reference 
to  the   following  sentence: 

It  is,  of  course,  understood  that  such  modifications  as  may  be  found 
necessary  for  best  accomplishing  the  end  desired  will  be  made  under  the 
advice  of  skilful  bankers,  but  the  plan  as  outlined  here  is  essentially  the 
one  that  I  intend  to  carry  through. 

The  nature  of  the  subscription  blank  in  which  the  subscribers 
appointed  Lewis  their  agent  witli  full  powers  "to  organize  and  in- 
corporate said  bank  upon  said  terms  with  such  directors  and  under 
such  laws  as  may  be  considered  by  you  best  suited  for  the  purposes 
intended,"  is  dwelt  upon.  Copies  of  the  original  subscription  blanks 
are  incorporated  as  exhibits.  The  Lawrence  memorandum  was  next 
analyzed,  in  full  detail,  and  specific  reply  was  made  to  every  alle- 
gation. An  affidavit  of  Francis  V.  Putnam,  the  cashier,  was  put  in 
evidence,  showing  him  to  have  been  a  bank  official  of  many  years* 
experience  and  explaining  in  some  detail  the  manner  of  operation 
of  the  bank.  The  response  includes  also  an  affidavit  of  the  board 
of  directors,  reciting  the  reasonable  market  value  of  the  University 
Heights  Company  at  seven  hundred  and  fifty  thousand  dollars,  and 
the  plant  of  the  Lewis  Publisliing  Company  at  four  hundred  and 
fifty  thousand  dollars.     These   estimates  were  supported   by  the 


THE  DREYFUS  CASE  OF  AMERICA  443 

affidavits  of  the  builder  and  architect  as  to  the  value  of  the  plant 
and  of  five  of  the  principal  real  estate  experts  of  St.  Louis  as  to 
the  value  of  the  real  estate  property.  The  response  concludes  with 
a  motion  in  due  form  for  a  dismissal  of  the  charges. 

The  following  is  an  excerpt  from  the  report  to  Congress  of  Post- 
master-General Hitchcock,  in  1911,  on  the  Bartholdt  bill,  providing 
for  the  reference  of  the  claim  of  the  Lewis  Publishing  Company 
for  damages  to  the  Court  of  Claims. 

Previous  to  the  issuance  of  the  fraud  order  »  *  *  *  Mr  Lewis  and  his 
counsel  were  heard  at  length.  Upon  the  conclusion  of  the  hearing  the 
assistant  attorney-general  reported  in  writing  to  the  postmaster-general 
the  facts,  together  M'ith  his  recommendation  that  a  fraud  order  be  issued. 
This  report  set  forth  a  complete  statement  of  the  case,  and  the  fraud 
order  was   issued   for  the   reasons  therein   stated. 

Goodwin's  report  to  cortelyou. 

Goodwin's  report  to  Cortelyou  is  inserted  at  this  point  in  the 
postmaster-general's  response.  It  is  made  up  chiefly  of  quotations 
from  Lewis'  promotion  literature  and  from  the  inspectors'  report. 
This  document  is  dated  June  26,  1905.  It  opens  as  follows:  Memo- 
randum in  regard  to  the  People's  United  States  Bank,  its  officers  and 
agents  as  such,  and  E.  G.  Lewis,  St.  Louis,  Mo. 

The  letter  of  Secretary  of  State  Swanger  of  June  5,  1905,  pre- 
viously quoted  from  the  Post-Dispatch,  is  published  at  length,  but 
no  reference  is  made  to  Swanger's  subsequent  letter  to  Fulton 
written  on  June  12.  This  was  in  the  hands  of  Goodwin  five 
days  prior  to  the  hearing.  This  official  communication  from  the 
banking  department  of  Missouri  was  to  the  effect  that  the  newly 
elected  board  of  directors  was  acceptable  to  the  State  authorities 
and,  in  Swanger's  opinion,  would  carry  out  his  recommendations  in 
full.  The  omission  of  any  reference  to  this  letter  should  be  taken 
in  conjunction  with  Goodwin's  statement,  "the  fact  that  new  direc- 
tors have  been  substituted  for  some  of  the  old  ones,  does  not  ma- 
terially affect  the  purposes  of  this  inquiry."  Evidently  his  recom- 
mendation of  the  fraud  order  was  based  upon  the  supposition  that, 
fraudulent  representations  having  been  made,  the  bank  could  not 
be  redeemed.  The  effect  of  the  fraud  order  upon  the  officers,  de- 
positors or  stockholders  does  not  appear  to  have  been  seriously 
thought  of.  No  discrimination  was  suggested  between  the  innocent 
and  the  guilty.  The  fraud  order  was  evidently  regarded  as  a  puni- 
tive measure.  The  alleged  misconduct  of  Lewis  and  his  associates 
was  construed  as  placing  them  beyond  the  pale  of  mercy.  The  effect 
of  the  proposed  drastic  action  was  held  to  be  chargeable  to  the  pro- 
moter of  the  bank  and  a  necessary  consequence  of  Us  wrong- 
doing. The  possibility  that  the  directorate  of  the  bank,  as  reor- 
ganized under  the  supervision  of  the  secretary  of  state,  might  save 
the  institution  to  the  stockholders  and  depositors,  does  not  appear 
to  have  received  any  consideration  whatever. 

The  report  concludes  with  this  summary: 


444  THE  SIEGE  OF  UNIVERSITY  CITY 

At  the  hearing  the  point  was  made  by  attorneys  for  the  bank  that, 
if  it  should  be  decided  that  false  and  fraudulent  representations  and 
promises  had  been  made  to  obtain  remittances  for  stock,  a  fraud  order 
should  not  issue  against  the  bank,  but  only  against  Mr.  Lewis,  as  the  pay- 
ments for  stock  were  all  sent  to  him.  I  am  unable  to  take  this  view. 
*  *  *  I  am  unable  to  see  how  it  is  possible  to  separate  the  bank  and 
Mr.  Lewis  in  this  matter.  He  has  been,  and  is,  in  absolute  control.  The 
bank  is  his  creature.  All  of  the  money  which  the  bank  has  received  for 
capital  stock  and  on  deposit,  and  which  it  is  now  receiving,  and  will 
receive,  is  the  result  of  the  false  and  fraudulent  representations  of  Lewis. 

The  sole  duty  of  the  PostofBce  Department  in  this  matter  is  to  protect 
the  investors  and  depositors,  and  prospective  investors  and  depositors.  I 
have  carefully  considered  the  facts  in  this  case  and  all  possible  courses 
of  action,  to  see  if  the  interests  of  the  investors  and  depositors  could 
better  be  protected  by  some  action  other  than  the  issuance  of  a  fraud 
order,  but  in  view  of  all  the  facts  in  the  case,  especially  the  facts  that 
Mr.  Lewis  is  in  control  of  the  affairs  of  the  bank  and  has  now  loaned  to 
himself  and  his  companies  over  nine  hundred  thousand  dollars  of  the 
funds  of  the  bank,  I  am  of  opinion  that  the  Postoffice  Department,  which 
has  been  and  is  the  principal  agent  of  Mr.  Lewis  in  this  enterprise, 
should  demand  an  immediate  accounting,  that  it  is  my  duty  to  recommend 
the  issuance  of  a  fraud  order  against  the  People's  United  States  Bank, 
its  officers  and  agents  as  such,  and  E.  G.  Lewis. 

R.  P.  Goodwin, 
Assistant  Attorney-General  for  the  Postoffice   Department. 
The  Postmaster-General. 

GOODWIN    UNDER   THE    PROBE. 

Goodwin  was  closely  cross-examined  by  Lewis,  himself,  at  the 
Ashbrook  Hearings  in  Washington,  in  February,  1911,  as  to  the 
sources  of  this  report  and  recommendation  to  Cortelyou  and  as  to 
the  evidence  submitted  by  him  to  the  postmaster-general.  He  as- 
serted that  the  moving  considerations  in  his  mind  were  not  only  the 
inspectors'  report,  but,  also,  Lewis'  verbal  testimony  at  the  hear- 
ing, and  the  contents  of  his  promotion  literature.  He  admitted  that 
the  inspectors'  report  was  withheld  from  the  accused  in  accordance 
with  the  fixed  policy  of  the  Department,  but  asserted  that  Lewis 
was  free  to  cross-examine  the  inspectors,  and  that  they  were  free 
to  answer  any  questions  that  might  have  been  asked,  even  though 
their  answers  had  revealed  the  contents  of  their  reports.  Asked 
why,  in  that  case,  the  report  was  not  frankly  submitted  as  a  basis 
of  cross-examination,  Goodwin  could  give  no  reason  other  than  such 
was  not  the  custom  of  the  Department. 

Lewis'  cross-examination  was  based  chiefly  upon  his  formal  re- 
sponse and  that  of  the  bank,  submitted  under  oath  to  Goodwin  at 
the  hearing.  A  careful  analysis  by  Lewis  showed  that  a  large  por- 
tion of  the  charges  embodied  in  the  Lawrence  memorandum  accom- 
panying the  citation  did  not  appear  in  Goodwin's  report  to  the 
postmaster-general.  Goodwin  was  unable  to  recall  whether  these 
cliarges  had  been  answered  to  his  satisfaction  at  the  hearing  or  not. 
A  large  number  of  additional  charges  were  included  in  Goodwin's 
report  to  Cortelyou.  Goodwin  asserted  that  these  additions  grew 
out  of  the  verbal  testimony  at  the  hearing.  He  alleged  that  they 
were  based  upon  portions   of  Lewis'  promotion   literature,   which 


THE  DREYFUS  CASE  OF  AMERICA  445 

had  been  read  during  the  hearing,  and  upon  which  Lewis  had  been 
cross-examined.  He  admitted  that  no  stenographic  report  was 
taken  and  that  no  part  of  the  verbal  testimony  submitted  by  Lewis 
in  his  defense  was  transmitted  to  the  postmaster-general,  except  as 
embodied  in  his  report.  He  asserted  that,  according  to  his  recollec- 
tion, all  the  documents  in  the  case  were  transmitted  to  the  post- 
master-general, but  was  unable  to  recall  specifically  whether  or  not 
the  written  response  of  the  bank  was  thus  submitted.  That  docu- 
ment does  not  appear  in  the  list  of  exhibits  contained  in  his  report. 
Whether  or  not  it  was  actually  before  the  postmaster-general  is 
problematical. 

The  salient  fact  to  be  grasped  is  that  the  findings  of  the  inspec- 
tors were  in  effect  accepted  by  Goodwin  as  true  and  were  held  by 
him  not  to  have  been  controverted  by  the  respondent.  The  short  of 
the  matter  appears  to  be  that  Goodwin  took  the  inspectors'  word 
against  Lewis'  oath  and  that  of  the  bank's  directors.  The  vice  of 
the  whole  proceeding  is  manifest  in  that  the  overwhelming  tendency 
of  the  inspectors'  report  to  discredit  Lewis  and  impeach  his  veracity, 
was  uncontroverted  in  the  mind  of  Goodwin,  because  the  report  was 
not  submitted  to  the  accused  as  the  basis  of  cross-examination.  The 
issue  of  veracity  was  sharply  joined.  Goodwin  was  forced  to  sup- 
port the  inspectors  and  discredit  Lewis,  or  support  Lewis  and  dis- 
credit the  inspectors.  There  was  no  alternative.  Once  the  fixed 
principle  of  accepting  the  findings  of  the  inspectors  as  true  had 
been  adopted  by  Goodwin,  the  end  was  inevitable.  The  inspectors 
reported  in  substance  that  Lewis  was  not  a  credible  witness;  hence, 
if  Goodwin  believed  them,  he  could  not  accept  Lewis'  testimony  even 
under  oath. 

AFTER    THE    HEARING. 

At  the  close  of  the  hearing  before  Goodwin,  occurred  the  first 
hearing  before  Third  Assistant  Madden  upon  the  inspectors'  reports 
recommending  that  the  second-class  mailing  privileges  be  withdrawn 
from  the  Woman's  Magazine  and  Woman's  Farm  Journal.  During 
the  same  day  by  appointment  of  Congressman  Bartholdt,  Lewis,  ac- 
companied by  the  directors  of  the  bank,  was  accorded  a  personal 
interview  with  the  postmaster-general.  The  directors  state  posi- 
tively that  they  had  Cortelyou's  personal  assurance  of  a  further 
hearing  before  himself  before  any  adverse  action  would  be  taken 
upon  the  result  of  the  hearing  before  Goodwin.  The  officials  of 
the  bank,  therefore,  satisfied  of  the  merits  of  their  cause,  reassured 
by  the  apparent  friendliness  that  had  obtained  during  the  hearing, 
and  relying  upon  Cortelyou's  personal  promises,  returned  to  St. 
Louis  in  the  belief  that  the  worst  was  over  and  that  the  bank  had 
before  it  an  opportunity  to  restore  confidence  and  rebuild  its  for- 
tunes. 

The  response  of  Postmaster-General  Hitchcock  to  Congress,  in 
1911,  further  recites  that  after  receiving  Goodwin's  reports  and 
before  deciding  his  action  on  the  case,  Cortelyou  called  upon  the 


446  THE  SIEGE  OF  UNIVERSITY  CITY 

attorney-general  of  the  United  States  for  advice  as  to  his  legal  au- 
thority in  the  premises.  In  response  to  this  request  Acting  Attor- 
ney-General Henry  M.  Hoyt,  on  July  6,  1905^  advised  the  post- 
master-general that  the  proposed  fraud  order  would  have  the 
sanction  of  legality.  Cortelyou,  in  the  course  of  a  lengthy  deposi- 
tion taken  in  the  case  of  the  People's  United  States  Bank  vs.  Good- 
win and  Fulton  for  libel,  says: 

I  do  not  recall  whether  or  not  I  personally  dictated  the  letter  trans- 
mitting the  papers  to  the  attorney-general.  As  I  recall  it,  all  the  essential 
papers  were  sent — all  the  papers  that  had  any  vital  bearing.  I  mean 
that  certain  reports  would  have  no  particular  bearing  on  the  matter  on 
which  we  wanted  a  decision.  Under  the  rules  of  the  attorney-general's 
office,  you  have  to  tell  him  specifically  on  what  j'ou  want  his  decision.  We 
asked  as  to  our  authority  on  certain  features  of  this  case.  We  did  not 
transmit  all  the  papers,  because  he  would  have  returned  them  with  a  state- 
ment that  he  did  not  render  opinions  on  that  basis. 

Oh,  yes,  his  opinion  recites  that  "from  the  facts  stated  I  am  of  the 
opinion."  Of  course  an  opinion  upon  an  incomplete  statement  of  the 
facts  on  file  would  not  be  proper.  But  I  understood  that  all  the  essential 
papers  were  forwarded.  If  he  had  any  doubt,  the  attorney-general  would 
have  come  back  and  asked  us  if  we  had  any  further  papers.  We  under- 
stood he  had  gotten  everything  we  had  on  the  case. 

I  do  not  recall  that  Mr.  Lewis  came  to  me  after  the  hearing  before 
Judge  Goodwin  and  asked  that,  in  the  event  a  fraud  order  was  con- 
templated, he  be  given  a  further  hearing  before  me.  I  certainly  did  not 
promise  to  give  him  a  hearing  and  then  not  give  it  to  him.  The  post- 
master-general can  not  presume  to  hear  all  these  various  matters.  It 
would   be  utterly  impossible. 

Mr.  Cortelyou  when  asked  to  identify  the  letter  written  by  Sec- 
retary of  State  Swanger  to  Fulton  on  June  12,  1905,  said,  in  sub- 
stance: 

Unfortunately,  what  was  expected  as  stated  in  that  letter,  was  not 
done.  Furthermore,  we  did  not  attach  the  same  weight  to  what  had  been 
done  that  the  secretary  of  state  of  Missouri  did.  The  reports  made  to  me 
by  the  inspectors  were  that  Mr.  Lewis  did  not  do  what  was  expected  of 
him  by  Mr.  Swanger.  I  did  not  go  out  and  ascertain  personally,  nor  did 
I  call  upon  Mr.  Lewis  for  evidence.  That  was  all  reported  to  me  in 
Washington.  I  was  advised  of  what  was  done  and  what  was  not  done.  I 
do  not  i<now  whether  that  letter  was  sent  to  the  attorney-general  or  not. 
In  the  last  analysis  I  would  take  the  statement  of  the  inspectors  as 
controlling  rather  than  the  statement  of  Mr.  Swanger. 

ORDER   NUMBER   TEN. 

The  foregoing  review  brings  us  up  to  the  evening  of  Sunday, 
July  9,  1905,  on  which,  according  to  newspaper  reports,  Postmaster- 
General  Cortelyou,  after  receiving  Hoyt's  opinion  that  the  fraud 
order  could  be  legally  issued  "upon  the  facts  as  stated,"  remained 
in  his  office  until  midnight  awaiting  advices  from  St.  Louis,  presum- 
ably from  Inspector-in-Charge  Fulton. 

We  may  imagine  Cortelyou  sitting  at  his  private  desk  alone,  with 
the  documents  in  the  case  gathered  about  him.  Whether  or  not 
the  jacket  containing  the  original  complaints,  including  the  letter 
of  Howard  E.  Nichols  and  Reedy 's  articles  in  the  Mirror,  were 
brought  to  Washington  for  his  inspection,  is  not  of  record.     Cor- 


Meszanine  floor,    Woman's  Magazine  Building 
^Private  office  of  Mr.  Lewis,  as  president  of  the  American   Woman's  League     ''Private 
office  of  John   W.  Lewis,   manager  of  the   University  Heights  Realty  and  Development 
Cotnpany 


Messatune  Hoor,  Woman's  Ma::aciiie  Buildins 

^Private  ofTice  of  M>:  F.    V.  Putnam,  treasurer  Lewis  Publishing  Coiiifaiiy     "Private 
office  of   Mr.   IV.   E.   Miller,  secretary 


THE  DREYFUS  CASE  OF  AMERICA  449 

telyou  in  his  deposition  states  that  he  had  no  recollection  of  the 
name  of  Nichols.  He  remarks  that  there  were  many  letters  trans- 
mitted by  the  President's  secretaries  to  the  postmaster-general  which 
he  never  saw.  Certainly  there  were  before  him  the  inspectors'  re- 
port and  Goodwin's  report  with  its  exhibits.  These  were  accom- 
panied by  some  form  of  memorandum  of  what  was  alleged  to  have 
taken  place  during  the  hearing.  Possibly,  also,  he  may  have  had 
the  written  response  of  Lewis  and  of  the  bank,  and  Hoyt's  opin- 
ion. What  complaints,  if  any,  other  than  those  of  record  may  have 
been  in  Cortelyou's  possession  is,  of  course,  unknown.  What  infor- 
mation he  may  have  had  from  unofficial  sources  remains  a  mystery. 
He  has  sworn  that  his  opinions  were  formed  upon  Goodwin's  find- 
ings and  those  of  the  inspectors,  and  in  the  absence  of  positive  evi- 
dence to  the  contrary,  his  deposition  is  conclusive. 

The  secretary  of  state  of  Missouri,  it  will  be  remembered,  had 
announced  to  a  reporter  of  the  Post-Dispatch  that  the  State  author- 
ities could  not  legally  take  any  further  action  against  the  bank, 
but  that  if  the  Federal  authorities  issued  a  fraud  order,  then  the 
State  authorities  would  intervene  and  place  the  bank  in  the  hands  of 
a  receiver.  Upon  the  eve  of  the  hearing  a  representative  of  the 
secretary  of  state  had  presented  a  letter  of  inquiry  from  the  secre- 
tary of  state  of  Missouri  to  the  postmaster-general.  Judge  Selden 
P.  Spencer  acknowledges  having  been  the  bearer  of  such  a  letter. 
Cortelyou  testifies  that  he  knew  the  promises  of  the  board  of 
directors  were  not  being  carried  out  to  Swanger's  satisfaction.  What 
representations  may  have  been  made  by  this  or  other  messengers, 
and  what  private  understanding,  if  any,  may  have  been  arrived  at, 
is  problematical. 

The  visions  that  arose  before  the  mind  of  Cortelyou  during  these 
hours  of  vigil  are  probably  known  to  no  one  other  than  himself. 
He  must  have  foreseen  the  ruin  of  the  People's  United  States  Bank, 
the  dispersion  of  its  employees,  and  the  blemish  placed  for  all  time 
on  the  reputation  of  Lewis  and  his  associates.  He  must  have  been 
aware  of  the  disappointment  of  the  hopes  and  expectations  of  the 
stockholders  and  depositors  scattered  everywhere  throughout  the 
country.  He  must  have  known  that  great  outcry  and  public  scandal 
would  arise.  Never  before  had  a  postmaster-general  directed  a 
fraud  order  against  so  great  and  conspicuous  an  institution.  Criti- 
cism by  Lewis  and  his  followers  was  inevitable.  All  the  resistance 
of  which  the  friends  of  the  institution  were  capable  was  to  be  antici- 
pated. Upon  the  hypothesis  of  the  inspectors,  Cortelyou  must  have 
expected  that  the  loss  to  the  stockholders  would  be  very  great.  For 
the  inspectors  held  that  Lewis'  securities  were  of  doubtful  value  and 
they  stated  that  more  than  one  million  dollars  of  the  funds  of  the 
institution  were  loaned  upon  no  other  collateral.  The  fraud  order 
would  necessarily  cause  the  further  depreciation  of  these  securities. 
The  net  conclusion  in  the  mind  of  Cortelyou  must  have  been  that 


460  THE  SIEGE  OF  UNIVERSITY  CITY 

the  loss  on  the  loans  to  the  Lewis  enterprises  would  be  very  nearly, 
if  not  quite,  total. 

Lewis'  articles  in  the  Woman's  Magazine  and  other  promotion 
literature  which  were  before  the  postmaster-general  contained  nu- 
merous references  to  the  competition  of  the  People's  United  States 
Bank  with  the  express  trust,  in  the  sale  of  money  orders  and  other- 
wise. They  also  set  forth  Lewis'  beliefs  as  to  the  future  power 
and  influence  of  the  bank.  Did  Cortelyou  read  those  articles?  If 
so,  what  were  his  mental  reactions  upon  the  visions  conjured  up  by 
Lewis'  facile  pen  of  the  contrast  between  the  need  for  greater 
banking  facilities  for  the  rural  population  of  America,  and  the  bene- 
fits accruing  from  postal  banks  in  other  nations.^  What  sentiments 
were  provoked  by  Lewis'  references  to  the  recommendation  of  Cor- 
telyou's  predecessors  to  Congress  that  a  similar  institution  should 
be  founded  under  the  Government  of  the  United  States?  What 
reflections  were  suggested  by  Lewis'  allusion  to  the  Mont  de  Piete 
of  France,  and  its  manifold  beneficences?  What  possibilities  oc- 
curred to  his  mind  of  the  competition  of  the  certified  mail  check 
system  of  the  People's  United  States  Bank  with  the  sale  of  post- 
office  money  orders  as  bearing,  conceivably,  upon  an  important 
branch  of  the  revenues  of  his  own  Department?  What  interests 
or  individuals  presented  themselves  to  his  recollection  as  likely  to 
give  him  their  unqualified  approval  and  lend  him  moral  support 
against  the  storm  of  criticism  certain  to  follow  the  destruction  of  so 
large  and  popular  an  institution? 

Some  such  balancing  of  prospective  consequences  there  must  have 
been,  prior  to  the  decision  of  a  question  fraught  with  consequences 
so  momentous.  The  actual  considerations  that  were  controlling  upon 
Coi'telyou  and  the  precise  motives  which  impelled  the  pen  that 
signed  the  fatal  order  can  be  arrived  at  only  by  a  process  of  infer- 
ence, a  series  of  deductions.  His  personality,  his  temperament,  his 
environment,  the  story  of  his  career  and  all  the  facts  that  are  of 
record  as  to  the  bank  and  his  relations  with  it,  must  be  cast  into 
the  crucible  and  the  reader  must  apply  the  fires  of  his  own  intellect 
to  smelt  the  gold  of  truth  from  the  dross  of  speculation. 

Certain  it  is  that  the  decision  was  arrived  at  and  the  People's 
United  States  Bank  was  doomed.  Some  time  before  midnight  of 
July  6,  1905,  Mr.  Cortelyou  attached  his  signature  to  the  follow- 
ing official  letter: 

POSTOFFICE  DEPARTMENT, 

WASHINGTON,    JULY    6,    1905. 

Order  No.  10. 

It  having  been  made  to  appear  to  the  postmaster-general,  upon  evidence 
satisfactory  to  him,  that  the  People's  United  States  Bank,  its  officers  and 
agents  as  "such,  and  E.  G.  Lewis,  at  St.  Louis,  Mo.,  are  engaged  in  con- 
ducting a  scheme  or  device  for  obtaining  money  through  the  mails  by- 
means  of  false  and  fraudulent  pretenses,  representations,  and  promises,  in 
violation  of  the  act  of  Congress  entitled  "An  act  to  amend  certain  sec- 
tions of  the  Revised  Statutes  relating  to  lotteries,  and  for  other  purposes," 
approved  September  lU,  1890: 


THE  DREYFUS  CASE  OF  AMERICA  461 

Now,  therefore,  by  authority  vested  in  him  by  said  act  and  by  the  act 
of  Congress  entitled,  "An  act  for  the  suppression  of  lottery  traffic  through 
international  and  interstate  commerce  and  the  postal  service,  subject  to 
the  jurisdiction  and  laws  of  the  United  States,"  approved  March  2,  1895, 
the  postmaster-general  hereby  forbids  you  to  pay  any  postal  money  order 
drawn  to  the  order  of  said  parties,  and  you  are  hereby  directed  to  inform 
the  remitter  of  any  such  postal  money  order  that  payment  thereof  has 
been  forbidden,  and  that  the  amount  thereof  will  be  returned  upon  the 
presentation  of  the  original  order  or  a  duplicate  thereof,  applied  for  and 
obtained  under  the  regulations  of  the  Department. 

And  you  are  hereby  instructed  to  return  all  letters,  whether  registered 
or  not,  and  other  mail  matter  which  shall  arrive  at  your  office  directed 
to  the  said  parties,  to  the  postmasters  at  the  offices  at  which  they  were 
originally  mailed,  to  be  delivered  to  the  senders  thereof,  with  the  word 
"fraudulent"  plainly  written  or  stamped  upon  the  outside  of  such  letters 
or  matter.  Provided,  however,  that  where  there  is  nothing  to  indicate 
who  are  the  senders  of  letters  not  registered  or  other  matter,  you  are 
directed  in  that  case  to  send  such  letters  and  matter  to  the  Dead-Letter 
Office  with  the  word  "fraudulent"  plainly  written  or  stamped  thereon,  to 
be  disposed  of  as  other  dead  matter  under  the  laws  and  regulations  applic- 
able thereto. 

Geo.  B.  Cortelyou, 

Postmaster-General. 
The  Postmaster, 
St.  Louis,  Mo. 

The  above  order  became  effective  immediately  upon  its  receipt  by 
the  postmaster  at  St.  Louis,  namely  on  Monday,  July  10,  1905. 
Then,  for  the  first  time,  knowledge  of  its  existence  was  communi- 
cated to  the  bank's  officials.  During  the  interval  the  fact  that  Order 
Number  Ten  was  in  process  of  transmission  to  St.  Louis  is  said  to 
have  been  communicated  over  the  long  distance  telephone  to  Secre- 
tary of  State  Swanger.  In  the  brief  period  of  time  thus  gained  over 
the  fast  mail  service,  steps  were  taken,  as  will  be  seen  in  the  follow- 
ing chapter,  to  bring  about  the  desired  "concerted  action"  between 
the  State  and  Federal  authorities. 


CHAPTER  XX. 

CONCERTED  ACTION. 

The  Onslaught  of  the  Allies — Cortelyou's  Memorandum  to 
THE  Press — Nation-Wide  Publicity — The  First  Receiv- 
ership— A  New  Kind  of  Bank  Failure — Home  Rule  vs. 
Federal  Usurpation. 

Sunday,  July  8,  1905,  was  a  day  big  with  momentous  consequences 
for  the  People's  Bank.  The  fears  of  the  directors  had  been  lulled 
to  sleep  by  the  delusive  promises  of  the  postmaster-general  and  of 
the  secretary  of  state  that  no  further  action  would  be  taken  without 
notice.  They  did  not  know  that  the  combined  assault  of  the  allied 
Federal  and  State  forces  was  at  hand.  Cortelyou  had  stated  that 
the  fraud  order  would  not  be  issued  on  the  hearing  before  Goodwin 
without  a  hearing  before  himself.  Swanger  had  assured  the  direc- 
tors of  his  confidence  and  had  promised  them  full  co-operation  and 
support.  The  opinion  of  the  attorney-general  that  a  fraud  order 
could  be  legally  issued,  quoted  in  the  Saturday  evening  papers,  did 
not,  therefore,  arouse  any  serious  apprehensions.  No  official  noti- 
fication of  the  fraud  order  was  given  to  the  bank  or  the  press  until 
Monday  morning.  Sunday  was  a  day  of  undisturbed  tranquility  at 
University  City. 

On  the  other  side,  the  generalissimos  of  the  attacking  armies, 
Cortelyou  and  Swanger,  took  advantage  of  the  immemorial  license 
of  military  men  to  fight  battles  on  the  Sabbath,  or  to  make  what- 
ever preparations  the  needs  of  warfare  demand.  The  work  of  war 
does  not  always  admit  of  the  niceties  of  Sabbath  observance.  Many 
eleventh-hour  preparations  were  pre-requisites  of  the  combined  as- 
sault. Cortelyou  and  Swanger  both  broke  the  Sabbath  in  order  to 
make  their  final  dispositions.  Cortelyou  was  at  his  office  until  mid- 
night, Sunday,  awaiting  final  advices  from  his  lieutenants  at  St. 
Louis,  and  working  on  his  official  statement  to  the  press.  Swanger 
is  said  to  have  spent  the  day  of  rest  with  Spencer  in  conference  with 
local  Republican  political  leaders  in  St.  Louis  county,  and  in  pre- 
paring an  application  for  receivership  to  be  presented  early  Monday 
morning. 

the  onslaught  of  the  allies. 

The  blow  fell.  The  St.  Louis  morning  papers  of  Monday,  July 
6,  1805,  bristled  with  scare-heads:  "Fraud  Order  Against  the  Peo- 
ple's Bank:  Postmaster-General's  Reasons  Set  Forth  in  Official 
Memorandum  to  the  Press."  The  evening  papers  printed  the  text 
of  Cortelyou's  memorandum,  and  scare-headed  the  fact  that  Judge 


_iGoss  octuple  four-color  printing  press  on  which  the  Woman's  Magazine  was  printed 
after  having  been   reinstated   in   the   mails 

^Foundation  laid  for  the  above  press  during  May,  igoS,  after  the  second-class  entry 
of  the  Woman  s  Magazine  had  been  withdrawn 


i"»     'T^     ■^^F^,    "f^  ''flP*k  ^^if^    "*"* 


^ 
^•^^- 


% 


"^sid 


'-^MGi^.  . 


'     ■    ■      '        '    ■         '     -  '       '    ..      ■".■  /■'-.  ^s   JUnhlur^   ,>l  III,:   Lciuis  Publishing  Conij\iuy 
'The    larnesl    magncine    press-room    in    the    world,    equipped    with    four-color    octuple 
Goss  Rotary,  three  Kidder  Rotaries,     five  Miehle  flat-bed  printing  presses,  eight  Dexter 
foldv.g   machines  and  all  necessary   appurtenances     -Battery   of  Miehle   flat-hcd  presses 


THE  DREYFUS  CASE  OF  AMERICA  456 

Selden  P.  Spencer  had  been  appointed  receiver  of  the  bank  and  had 
assumed  control.  The  Federal  authorities  thus  prevented  Lewis  or 
any  officers  of  the  bank  from  receiving  further  contributions.  The 
State  authorities  took  from  the  bank's  managers  the  funds  already 
sent  in.  It  was  a  grand  stroke.  So  sudden  and  complete  was  it 
that,  apparently,  the  incident  Avas  closed.  The  story  of  the  People's 
Bank,  so  happily  begun,  seemed  at  an  end.  A  reporter  visiting  the 
bank  to  interview  Lewis,  on  Monday  morning,  found  Spencer  in 
charge.     He  was  told  that  Lewis  had  gone  horseback  riding. 

The  officers  of  the  bank  were  literally  astounded.  The  assurances 
of  Cortelyou  and  Swanger  had  both  been  disregarded.  A  fraud 
order  had  been  issued  against  a  two  and  a  half  million  dollar  State 
banking  institution,  organized  and  operated  in  full  compliance 
with  the  State  banking  laws,  upon  a  hearing  the  inadequate  nature 
of  which  has  already  been  narrated.  A  receiver  had  been  put  in 
charge  of  a  jDerfectly  solvent  bank  without  a  moment's  warning. 
Not  the  slightest  notice  had  been  given  to  the  directorate  of  respon- 
sible business  men,  which  had  been  selected  on  the  request  of  the 
secretary  of  state  and  with  his  full  approval.  Lewis  evidently 
wanted  to  get  away  from  everybody  for  the  moment  to  recover  his 
poise  after  the  shock  of  this  unexpected  onslaught.  He  had  need 
to  take  counsel  with  himself.  A  meeting  of  directors  had  been 
called  for  four  o'clock  on  Monday.  By  that  hour  it  was  his  duty, 
as  the  person  responsible  for  the  defense,  to  make  up  his  mind 
Avhat  action  he  should  recommend.  Had  there  been  a  streak  of 
cowardice  in  Lewis'  make-up,  he  would  have  quit  after  that  horse- 
back ride.  He  would  have  told  his  readers  that  the  combined  powers 
of  the  L^nited  States  and  the  State  of  Missouri  were  too  much  for 
anyone  to  fight.  He  would  have  said  that,  while  he  felt  that  he 
had  done  no  wrong,  he  must  needs  submit  to  the  inevitable.  But, 
had  there  been  any  tinge  of  "yellow"  in  Lewis,  this  story  of  the 
Siege  could  never  have  been  written. 

The  American  people  are  always  interested  in  a  fight.  They 
love  a  fighting  man.  And  their  interest  goes  out  spontaneously  to 
the  under  dog.  The  fight  which  Lewis  started  on  this  occasion  and 
has  kept  up  ever  since  is  by  all  odds  the  most  noteworthy  ever  put 
up  by  a  private  citizen  against  the  combined  powers  and  resources 
of  a  great  State  and  Nation.  All  through  the  Middle  and  Far  West 
Lewis  is  still  talked  of  as  "the  man  who  beat  the  Government." 
There  are  many  who,  upon  the  information  that  they  possess,  think 
Lewis  has  been  somewhat  if  not  wholly  in  the  wrong.  But  all  who 
know  the  facts  cannot  but  applaud  the  courage,  energy  and  opti- 
mism with  which,  during  all  these  years,  he  has  withstood  the 
utmost  power  that  his  opponents  could  array  against  him. 

CORTELYOU'S  MEMORANDUM  TO  THE  PRESS. 

The  public  at  St.  Louis  was  first  apprised  of  the  issuance  of  the 
fraud  order  by  lengthy  news  items  in  the  Monday  morning  papers. 
The   Globe-Democrat   bracketed   these   two   paragraphs   under   the 


466  THE  SIEGE  OF  UNIVERSITY  CITY 

caption,  "Moody's  Arraignment  and  Lewis'  Reply/'  at  the  head  of 
the  Washington  disi3atch  which  follows: 

I  think  there  can  be  no  doubt,  from  the  facts  submitted,  that  E.  G. 
Lewis  is  to  be  regarded  as  conducting  a  scheme  for  obtaining  money 
through  the  mails  by  means  of  false  representations  and  promises.  The 
facts  stated,  represent  him  as  tlie  creator  of  tlie  bank,  and  absolute  mas- 
ter of  its  charter,  directors,  stocks,  and  funds,  and  as  diverting  those 
funds  into  the  hands  of  himself  and  certain  associates  by  way  of  loans  to 
various  companies  of  which  he  is  the  principal  member. — Attorney-General 
Moody's  opinion,  submitted  to  Mr.  Cortelyou. 

I  have  been  publicly  condemned,  tried  and  executed  without  having 
been  granted  the  privilege  of  offering  a  defense.  We  had  no  access  to  the 
report  of  the  postoffice  inspectors,  knew  nothing  except  in  a  general  way 
of  the  cliarges  made  against  us,  and  were  denied  the  right  to  examine 
any  of  the  postoffice  inspectors'  witnesses. — E.  G.  Lewis. 
Special  dispatch  to  the  Globe-Democrat,  Washington,  July  9: 

George  B.  Cortelyou,  the  postmaster-general,  has  issued  a  fraud  order 
against  the  People's  United  States  Bank,  its  officers  and  agents  at  St. 
I^ouis.  The  order  is  dated  July  6  (Thursday),  but  does  not  go  into  effect 
until  tomorrow  (Monday).  The  postmaster-general  has  waited  until  his 
order,  and  instructions  accompanying  it,  had  been  received  in  St.  Louis 
and  every  arrangement  had  been  made  for  complying  with  it.  He  re- 
fused until  midnight  tonight  to  make  any  statement  relative  to  his 
decision.  He  had  a  force  of  clei-ks  and  stenographers  at  the  Postoffice 
Department  this  (Sunday)  afternoon,  and  dictated  a  lengthy  statement, 
in  which  he  goes  into  the  history  of  the  organization  of  the  bank  and  its 
associate  companies. 

Mr.  Cortelyou  spent  the  greater  part  of  the  afternoon  and  evening  at 
his  office  in  the  Postoffice  Building  working  on  the  statement.  During  the 
day  he  refused  to  respond  to  repeated  appeals  to  make  known  his  course 
in  the  matter.  He  stated  to  all  inquirers  tliat  he  had  wired  to  St.  Louis 
at  three  o'clock  Saturday  afternoon  for  information  bearing  on  the  case, 
and  had  fully  decided  to  have  no  word  to  say  until  he  received  a  reply 
from  his  message  of  inquiry.  He  persisted  in  this  attitude,  refusing  to 
give  the  nature  of  his  inquiry  or  the  name  of  the  person  to  whom  it  was 
addressed. 

The  fact  that  the  long-delayed  "concerted  action"  had  come  at 
last  was  chronicled  in  the  evening  papers.  The  Post-Dispatch  ran 
this  eight-column  scarehead  across  its  front  page:  "Judge  Spencer, 
Appointed  Receiver  for  Lewis'  People's  Bank,  Takes  Charge ;  Fraud 
Order  Against  the  Concern."     It  thus  sums  up  the  day's  events: 

Judge  McElhinney  of  the  St.  Louis  county  circuit  court  this  morning 
appointed  Judge  Selden  P.  Spencer  receiver  of  Edward  G.  Lewis'  People's 
United  States  Bank.  The  appointment  was  at  the  request  of  Secretary 
of  State  Swanger.  Judge  Spencer  immediately  qualified,  furnisliing  bond 
for  ^2.'>0,000,  and  went  at  once  to  the  office  of  the  bank  to  take  charge. 
The  action  of  the  secretary  of  state  follows  the  issuance  of  a  fraud  order 
by  Postmaster-General  Cortelyou  on  the  strength  of  which  thousands  of 
letters  being  received  at  the  postoffice,  addressed  to  the  bank,  are  being 
stamped  "fraudulent"  and  returned  to  the  senders.  The  fraud  order  was 
issued  on  a  rejwrt  submitted  by  Postoffice  Inspectors  Fulton,  Sullivan  and 
Stice  of  St.  Louis,  which  was  published  exclusively  in  the  Post-Dispatch 
May  3L  Lewis  was  granted  a  hearing  on  this  recommendation  that  a 
fraud  order  be  issued  aijainst  the  bank  and  made  a  defense  before  Assist- 
ant Attorney-General  Goodwin  in  Wasliington  .lime  16. 

Under  the  caption,  "Postmaster-General  Explains  Fraud  Order," 

Cortelyou's  statement  was  printed  in   full.     After  reciting  briefly 


THE  DREYFUS  CASE  OF  AMERICA  457 

the  substance  of  the  citation  and  hearing,  the  most  damaging  of 
the  inspectors'  charges  against  Lewis  are  summed  up,  and  the  state- 
ment closes  thus: 

The  attorney-general,  to  whom  the  postmaster-general  submitted  the 
matter  for  an  opinion,  said:  "The  existence  of  a  charter  of  incorporation 
— another  legal  'person' — affords  no  protection  to  him.  A  corporation  can 
be  used  as  an  instrument  for  the  violation  of  law.  *  *  *  As  for  the  bank 
and  its  mail,  we  may,  upon  the  facts  stated,  treat  the  constant  public 
representations  of  its  president,  made  with  its  acqulescense,  and  their 
fruits  accepted  by  it,  as  its  own,  or  look  upon  it  as  an  'agent  or  repre- 
sentative' of  Lewis  in  the  reception  of  the  mail.  The  bank  seems,  accord- 
ing to  the  facts  stated,  to  be  no  other  than  Lewis  himself,  under  a  thin 
disguise." 

The  Post-Dispatch,  after  alluding  to  the  fact  that  the  charges 
against  the  bank  are  not  news  to  its  readers,  editorially  contrasts 
the  decisive  action  of  the  Federal  Government  with  the  previous 
inaction  of  the  State  banking  department,  and  holds  Secretary  of 
State   Swanger  to   strict  accountability. 

This  memorandum  of  the  postmaster-general  became  the  basis  of 
the  case  of  the  People's  United  States  Bank  vs.  Goodwin  and  Fulton, 
a  suit  for  libel.     Cortelyou,  examined  under  oath,  said  in  substance: 

This  memorandum  was  prepared  in  the  office  of  the  assistant  attorney- 
general  for  the  Postoftice  Department.  It  was  submitted  to  me  and  sent 
out  in  response  to  inquiries  as  to  why  the  Department  had  acted.  It 
was  very  largely  in  response  to  inquiries  of  stockholders  of  the  bank.  The 
title  on  the  cover  and  also  on  the  inside  of  the  pamphlet  sets  forth  that 
it  is  the  memorandum  of  the  postmaster-general,  as  embodied  in  a  state- 
ment given  to  the  press  July  19,  1905. 

Mr.  Lewis'  side  of  the  question  was  set  out  as  far  as  it  was  possible 
to  do  so.  I  considered  it  a  full  and  fair  statement  of  the  conditions 
existing  at  the  time,  or  it  would  not  have  been  issued.  Mr.  Lewis,  through 
the  medium  of  his  magazines  of  large  circulation,  had  been  stating  his 
side  of  the  case  broadcast  over  the  country.  It  was  due  to  the  Postoffice 
Department  and  the  Government  that  some  publicity  be  given  its  side. 
The  urgency  arose  from  the  fact  that  Lewis  had  flooded  the  country  with 
his  own  side  of  the  case  and  his  promises  and  representations.  It  was  due 
to  the  Government  to  act,  and  it  did  act,  promptly. 

Cortelyou  testified  that  he  does  not  know  who  prepared  this 
statement,  but  that  Fulton  was  called  to  Washington  frequently 
and  helped  to  prepare  a  number  of  statements  in  the  case  and  that 
he  may  have  been  at  this  time  in  Washington. 

Congressman  Redfield,  at  the  Ashbrook  Hearings,  directed  the 
committee's  attention  to  the  fact  that  this  pamphlet  as  issued  from 
the  Postoffice  Department  does  not  bear  the  imprint  of  the  Govern- 
ment printing  office,  and  bears  no  signature.  While  it  purports  to  be 
a  memorandum  by  the  postmaster-general,  it  is  thus,  in  effect,  an 
anonymous  publication.  Responsibility  for  the  statements  which 
it  contains  is  not  directly  assumed  by  anyone.  Cortelyou  states 
that  he  did  not  give  out  this  statement  to  the  press.  But  the  fact 
that  it  was  issued  from  the  Postoffice  Department  as  the  postmaster- 
general's  memorandum,  and  was  followed  by  no  contradiction,  was 


458  THE  SIEGE  OF  UNIVERSITY  CITY 

conclusive  to  the  press  that  it  was  by  authority.     As  such  it  was 
given  instant  and  widespread  publicity. 

NATION-WIDE    PUBLICITY. 

The  bank  project  was  not  only  novel.  The  stockholders  were 
everywhere.  An  expose  is  always  a  preferred  news  item.  The 
official  action  of  the  postmaster-general  freed  the  press  from  all 
caution  as  to  libel.  Lewis  had  by  this  time  employed  a  clipping 
bureau  to  furnish  him  with  news  items,  and  three  large  scrapbooka 
are  taken  up  chiefly  with  clippings  about  the  bank.  Some  idea  of 
the  effect  of  the  postmaster-general's  statement  to  the  press  may 
be  had  from  the  fact  that  computation  by  actual  measurement  of 
the  number  of  lines  of  news  published  about  the  bank  on  July  10 
and  11,  shows  that  the  equivalent  of  at  least  two  hundred  and  sev- 
enty-five full  newspaper  columns  were  published.  The  total  would 
amount  to  the  equivalent  of  three  complete  ordinary  issues,  includ- 
ing advertisements,  of  one  of  the  great  modern  dailies.  During  the 
remainder  of  the  month  of  July  more  than  one  hundred  and  twenty- 
five  additional  columns  were  published,  being  the  equivalent  in  all 
during  July  of  more  than  four  complete  daily  newspapers.  These 
are  only  such  clippings  as  Lewis  chanced  to  preserve.  Large  num- 
bers of  others  were  undoubtedly  printed. 

Every  state  in  the  Union  is  represented  in  this  publicity.  No 
less  than  seventy-five  columns  of  newspaper  space  were  devoted  to 
the  bank  in  the  state  of  Illinois.  The  Missouri  press  comes  next 
with  twenty-eight  columns;  Wisconsin,  twenty-three;  New  York 
with  twenty;  Ohio,  nineteen;  Colorado,  fifteen;  Iowa,  twelve;  Ten- 
nessee, ten;  Minnesota,  ^lichigan,  Indiana,  California,  each  nine 
columns;  Connecticut,  eight;  and  so  on  down  to  Montana,  Arizona, 
Virginia  and  Wyoming,  with  fractions  of  one  column. 

Former  Third  Assistant  Postmaster-General  Madden  comments 
upon  the  postmaster-general's  memorandum  to  the  press  as  follows: 

This  pamphlet  purports  to  state  the  reasons  for  the  issuance  of  the 
fraud  order,  but  includes  only  the  postmaster-general's  side  of  the  case. 
It  does  not  include  the  June  2d  letter  of  the  secretary  of  state  of  Mis- 
souri. It  does  not  state  that  any  person  had  complained  against  this 
bank.  It  does  not  identify  the  statute,  under  which  the  postmaster- 
general  assumed  to  send  his  inspectors  into  the  bank  to  search  its  books 
and  papers  to  find  a  basis  for  "charges,"  which  should  be  used  to  secure 
criminal  indictments  of  the  president.  *  *  *  So  far  as  my  experience  goes 
and  I  h;ive  been  able  to  learn,  the  postmaster-general  has  never  previously 
deemed  it  necessarr  to  issue  such  a  public  statement  explaining  an  oflBcial 
act.  If  the  act  were  correct  under  the  law  and  facts,  its  propriety  is 
assumed.  No  explanation  is  called  for  beyond  what  appears  in  the  fraud 
order  itself.  This  pamphlet  does  not  state  that  it  was  issued  under 
authority  of,  or  in  compliance  with  the  requirements  of  any  law.  On  the 
contrary,  there  are  two  acts  of  Congress  which  seem  tc  forbid  the  spending 
of  public  money  for  such  purpose. 

THE   FIRST  RECEIVERSHIP. 

Lewis  and  his  associates  were  tasting  the  full  bitterness  of  defeat. 
The    St.    Louis    Star-Chroniele    of    Monday    evening — the    day    on 


THE  DREYFUS  CASE  OF  AMERICA  459 

which  the  fraud  order  went  into  effect — tells  the  story  of  the  dra- 
matic moment  when  the  conquering  invader  first  set  foot  in  Lewis' 
citadel.  At  the  foot  of  the  marble  stairway,  like  a  feudal  chieftain 
about  to  yield  up  the  keys  of  a  captured  city,  Lewis  met  the  man 
who  had  come  to  supersede  him  in  authority  and  undo  for  all  time 
the  results  of  his  labors  for  so  many  busy,  happy  months  in  the 
upbuilding  of  the  People's  Bank.  Lewis  could  as  yet  hardly  realize 
what  had  occurred.  He  was  conscious  of  but  one  thing:  the  bank 
was  about  to  be  destroyed.  His  whole  soul  was  upheaved  with 
bitter  protest  and  revolt.  It  was  as  if  his  latest-born  child  was 
about  to  be  torn  from  him  and  foully  done  to  death.  The  thing 
seemed  unbelievable.  Yet,  in  spite  of  his  abhorrence,  the  conscious- 
ness was  forced  upon  him  that  it  must  be  true.  Knowing,  as  we  do, 
something  of  Lewis'  temperament  and  having  caught  in  the  eye  of 
fancy  a  glimpse  of  his  ideal  conception  of  the  People's  Bank,  we 
may  feel,  even  in  the  dry  lines  of  the  newspaper  story  of  this 
episode,  some  slight  palpitation  of  the  heartbreak  that  underran 
Lewis'  reception  of  Selden  P.  Spencer,  first  receiver  of  the  People's 
Bank.  What,  then,  must  have  been  his  bitterness  of  spirit  during 
that  historic  horseback  ride,  while  the  newly  installed  receiver  was 
busily  engaged  in  "protecting"  the  People's  Bank  out  of  existence. 
This  is  the  reporter's  story: 

Judge  Spencer  has  filed  a  bond  for  two  hundred  and  fifty  thousand 
dollars  with  the  United  States  Fidelity  &  Guaranty  Company,  as  surety. 
This  bond  is  subject  to  increase  to  cover  the  assets  of  the  bank.  Accom- 
panied by  State  Bank-Examiner  Cook,  he  went  immediately  to  the  Woman's 
Magazine  Building.  There  it  was  announced  to  E.  G.  Lewis  that  Judge 
Spencer  had  been  appointed  receiver. 

Before  turning  the  affairs  of  the  People's  Bank  over  to  Spencer,  Lewis 
in  the  presence  of  three  witnesses  made  a  formal  protest  to  the  appoint- 
ment. Spencer  acknowledged  the  protest  and  was  then  taken  up  to  the 
fifth  floor  where  he  took  charge.  Almost  his  first  act  was  to  telegraph 
about  fifty  banks  over  the  United  States  not  to  honor  any  more  checks 
on  the  People's  United  States  Bank.  These  bank  checks  had  been  sent  out 
by  the  People's  Bank  for  sale  and  were  purchasable  by  those  who  desired 
to  use  them.  Judge  Spencer  continued  to  use  the  same  clerical  force 
that  had  been  used  by  the  bank  oflacers.  Bank-Examiner  Cook  was  at 
the  institution  all  day,  but  Spencer  said  Cook  was  taking  no  part  in  the 
conduct  of  its  affairs.  He  said,  further,  that  he  would  make  an  endeavor 
to  gather  in  all  the  assets  of  the  institution  for  the  protection  of  the 
depositors,  stockholders  and  creditors,  in  the  order  named.  No  one  was 
permitted  on  the  fifth  floor,  on  whicli  the  bank  offices  are  located,  without 
an  order.  The  words  "Wind  up  the  affairs"  which  were  in  the  order  for 
petitioner's  appointment,  were  stricken  out  by  agreement.  The  signifi- 
cance of  this  change  in  the  ultimate  disposal  of  the  bank's  afPairs,  was 
not  explained. 

The  following  is  a  written  protest  made  to  Judge  Spencer  by  President 
Lewis:  "In  acknowledging  service  upon  me  as  President  of  the  People's 
United  States  Bank  of  an  order  of  the  circuit  court  of  St.  Louis  county, 
dated  July  10,  1905,  whereby  Judge  Selden  P.  Spencer  is  appointed 
receiver  of  said  bank,  I,  acting  as  president  of  this  bank,  do  protest  that 
order  as  unjustified  and  in  every  way  prejudicial  to  the  interest  of  both 


460  THE  SIEGE  OF  UNIVERSITY  CITY 

stockholders    and   depositors   and   do   surrender   said   bank   and   its   assets 
only  under  protest  and  in  obedience  to  said  order  of  the  honorable  court. 

(Signed)       "E.  G.  Lewis,  President." 
Witnesses:     C.  D.  Garnett,  F.  J.  Cabot,  F.  V.  Putxam. 

The  most  amazing  feature  of  the  first  receivership,  and  the  one 
wliich  later  raised  a  storm  of  protest  and  public  criticism,  was  the 
lack  of  any  notice  or  warning  of  his  intended  action  by  the  secre- 
tary of  state.  What  possible  motive,  men  asked,  could  account  for 
this  instant  reversal  from  friendly  co-operation  to  open  war.'* 
Swanger's  first  explanation  was  given  to  a  reporter  of  the  Globe- 
Democrat  in  the  following  interview: 

I  instructed  N.  T.  Gentry  and  John  Kennish,  assistants  to  Attorney- 
General  Hadley,  to  make  application  for  a  receiver  for  the  bank  in  the 
Circuit  Court  at  Clayton.  I  could  not  take  charge  myself  under  the  law, 
as  I  am  only  authorized  to  assume  control  of  banks  that  are  in  an 
insolvent  condition.  The  People's  Bank  is  not  insolvent.  It  is,  however, 
in  an  unsafe  condition.  The  matter  is  now  out  of  my  hands  and  the 
bank  is  in  charge  of  the  courts. 

As  to  the  amount  the  stockholders  in  the  bank  will  receive  back,  I  am 
in  no  position  to  say.  I  believe  that  a  large  majority  of  the  loans  are 
well  secured.  The  largest  loans  are  .$440,000  to  the  University  Heights 
Realty  and  Development  Company,  $400,000  to  the  Lewis  Publishing 
Company,  and  $146,000  which  is  credited  against  promotion  expenses  of 
the  bank.  The  first  two  are  secured  by  the  University  Heights  property 
and  the  AVoman's  Magazine  Building,  business  and  contents.  As  to  the 
promotion  expenses,  I  am  not  prepared  to  say.  None  of  these  loans  were 
made  to  Lewis  personally,  but  he  was  the  prime  factor,  of  course,  in  the 
concerns  to  which  the  money  was  loaned. 

A    NEW    KIND    OF    B^NK    FAILURE. 

The  twenty-four  hours'  developments  after  the  first  receivership 
was  installed  first  perplexed  the  people  of  St.  Louis  and  then  filled 
them  with  amazement.  For  the  public  has  been  taught  by  past 
experience  to  expect  that  the  failure  of  a  bank  or  the  exposure  of  a 
get-rich-quick  concern  will  be  followed  by  sensational  details  of 
defalcation  or  embezzlement,  spiced  by  scandalous  talcs  of  the  mis- 
management or  riotous  living  by  which  the  assets  have  been  dis- 
sipated, and  enlivened  by  the  arrest  of  the  bank's  officials  or  their 
flight  from  justice.  But  here  was  a  bank,  branded  as  fraudulent 
by  the  Federal  Government  and  thrown  into  forced  receivership  by 
the  State  authorities,  which  was  not  only  solvent.  It  had  in  its 
vaults  certificates  of  deposit  for  a  million  and  a  half  dollars — more 
than  five  times  enough  funds  in  ready  cash  to  pay  off  its  depositors 
and  its  current  liabilities  in  full.  True,  it  had  made  loans  of  nearly 
a  million  dollars  to  corporations  controlled  by  Lewis.  But  Lewis 
had  put  his  real  estate  and  publishing  interests  in  pawn  to  protect 
these  loans,  and  they  were  said  by  the  head  of  the  State  banking 
department  himself  to  be  well  secured.  No  law  had  been  broken. 
The  books  had  not  been  falsified.  No  charges  of  theft  or  mis- 
application of  funds  appeared  in  the  public  prints.  Lewis  had  not 
been  playing  the  stock  market,  or  betting  on  horse  races,  or  going 
in  fast  company.     The  only  late  hours  he  had  been  known  to  keep 


THE  DREYFUS  CASE  OF  AMERICA  461 

were  his  vigils  in  his  tower  with  a  fountain  pen  as  his  sole  com- 
panion, save  for  the  spiritual  presence  of  his  readers.  No  funds  of 
the  People's  Bank  had  been  dissipated.  Every  dollar  was  accounted 
for  by  lawful  loans.  Each  was  doing  its  full  share  in  turning  the 
wheels  of  wholesome  industry  and  in  the  upbuilding  of  legitimate 
enterprise.  This  was  a  kind  of  bank  failure  for  which  the  people 
of  St.  Louis  and  of  the  United  States  were  not  prepared  and  which 
at  first  they  could  not  seem  to  understand.  Slowly  it  dawned  upon 
them  that  the  postmaster-general  might  have  committed  a  grave 
injustice  and  that  the  secretary  of  state  in  aiding  and  abetting  him 
might  have  overstepped  the  bounds  both  of  morals  and  of  law. 

The  St.  Louis  Globe-Democrat  of  Tuesday  morning  published 
a  lengthy  news  article,  including  a  photograph  of  Receiver  Spencer 
and  also  a  view  of  the  interior  of  the  Woman's  Magazine  building. 
Under  the  caption,  "Official  Statement  of  Bank's  Condition,"  is 
printed  the  first  public  statement  as  to  the  present  status  and  prob- 
able outcome  of  the  bank's  affairs: 

Judge  Spencer,  the  receiver,  last  night  gave  out  the  following  statement 
of  assets  and  liabilities  of  the  People's  United  States   Bank: 

ASSETS. 

Loans   and  discounts $1,010,183.42 

Bonds    and    stocks    129,469.92 

United  States  bonds  75,000.00 

Cash    and   due    from   banks 1,393,656.06 

Building   and   furniture   and   fixture   account 19,701.05 

Expenses    26,737.88 

Total    $2,654,748.03 

LIABILITIES. 

Capital    $3,435,000.00 

Deposits     219,748.03 

Total    $2,654,748.03 

Included  in  the  loans  and  discounts  are  the  following  items  considered 
br  the  receiver  of  doubtful  value  and  liable  to  shrinkage:  An  unsecured 
note  given  bj  Lewis  and  the  old  directors  for  one  hundred  and  fifty  thou- 
sand dollars,  representing  the  promotion  expense  of  the  bank;  a  loan  of 
three  hundred  and  eighty  thousand  dollars,  secured  by  stock  of  the  Lewis 
Publishing  Company;  a  loan  of  four  hundred  and  forty- four  thousand  dol- 
lars, secured  by  stock  of  the  University  Heights  Realty  and  Development 
Company.  The  balance  of  thirtj-nine  thousand  dollars  is  made  up  of 
smaller  miscellaneous  loans,  many  of  them  on  notes  endorsed  by  Lewis. 

Under  the  caption,  "All  for  Depositors,  Half  for  Stockholders," 
is  this: 

State  Bank-Examiner  R.  M.  Cook  last  night  declared  the  affairs  of  the 
People's  United  States  Bank  were  in  no  very  complicated  condition.  He 
said:  "According  to  an  exajuination  I  made  of  the  assets  and  liabilities, 
I  believe  the  receiver  now  would  be  able  to  pay  all  the  depositors  in  full 
and  have  enough  left  to  par  the  stockholders  fifty  per  cent  of  their 
stock.  Judge  Spencer,  the  receiver,  places  a  more  liberal  estimate  on  the 
bank's  ability  to  pay  the  stockholders.  He  stated  that,  allowing  for 
shrinkage  in  the  collateral,  the  stockholders  might  receive  seventy-five  per 
cent  on  the  dollar." 


462  THE  SIEGE  OF  UNIVERSITY  CITY 

Summarizing  the  day's  events,  attention  is  called  by  the  Globe- 
Democrat  to  the  fact  that  the  receiver  had  made  ajjplication  to 
R.  M.  Fulton,  as  postoffice  inspector-in-charge,  for  the  bank's  mail, 
to  be  delivered  to  him  upon  the  ground  that  it  might  contain  stock 
subscriptions,  deposits  or  other  assets  of  the  bank.  TI)e  demand 
was  refused  with  the  statement  that  "the  procedure  of  the  Depart- 
ment permitted  of  no  lifting  of  the  fraud  order  except  by  injunction 
of  a   Federal  court   or  its   revocation   by   the   postmaster-general." 

The  Chronicle  of  Tuesday  evening  reviews  the  day's  proceedings 
thus : 

Judge  McElhinney  granted  the  request  of  Receiver  Spencer  this  raorn- 
inj;  for  authority  to  pay  tiie  depositors  of  the  People's  United  States  Bank 
on  demand.  The  court  also  increased  Judge  Spencer's  bond  from  $250,000 
to  $1,000,000  at  the  latter's  own  request.  Judge  McElhinney  advised 
that  the  bond  he  distributed  among  several  companies.  Spencer  an- 
nounced that  he  would  begin  an  investigation  of  the  expenses  of  the  bank. 
He  has  engaged  Judge  George  P.  Wolff  and  State  Senator  A.  E.  L.  Gard- 
ner, both  of  St.  Louis  county,  to  represent  him  in  any  legal  phase  that 
might  develop.  The  receiver  stated  to  the  court  that  there  is  sufficient 
money  to  pay  all  present  demands.  He  stated  that  there  were  now  about 
fifty  employees,  including  fifteen  stenographers,  who  would  not  be  needed 
if  the  fraud  order  was  allowed  to  stand. 

The  Post-Dispatch,  in  furtherance  of  its  implacable  hostility, 
ran  under  the  heading,  "Stockholders  Lose  More  Than  Six  Hundred 
Thousand  Dollars  in  Lewis'  Collapse,"  a  four-column  story  open- 
ing thus: 

By  the  collapse  of  the  People's  United  States  Bank,  the  get-rich-quick 
enterprise  of  E.  G.  Lewis,  the  sixty-five  thousand  stockholders  scattered 
throughout  every  state  and  territory  in  the  Union  will  lose  more  than 
six  hundred  thousand  dollars,  even  if  Receiver  Spencer's  greatest  expec- 
tations as  to  the  values  of  the  bank's  securities  are  realized.  Bank-Exam- 
iner Cook,  who  should  be  thoroughly  familiar  with  the  institution's  affairs, 
saj's  the  stockholders  cannot  be  paid  more  than  fifty  per  cent,  thus  en- 
tailing a  loss  of  more  than  one  million  dollars.  According  to  Receiver 
Spencer's  estimate,  he  expects  to  realize  from  the  present  assets  one 
million,  eight  hundred  thousand  dollars  and  pay  back  to  the  stockholders 
seventy-five  per  cent  of  their  holdings. 

The  securities  upon  which  he  contemplates  realizing  seventy-five  per 
cent  on  the  dollar  paid  in  for  stock,  is  the  property  pledged  for  collateral 
to  secure  the  bank's  loans  to  the  two  other  Lewis  concerns,  the  University 
Heights  Company  and  the  Woman's  Magazine,  aggregating  eight  hundred 
thousand  dollars.  This  security  consists  of  two  hundred  acres  of  land 
owned  by  the  University  Heights  Company,  on  one  hundred  acres  of 
which  there  is  a  previous  lien  of  between  one  hundred  seventy  thousand 
dollars  and  two  hundred  thousand  dollars.  The  Woman's  Magazine 
Building,  tlie  printing  ])lants  and  the  subscription  lists  of  the  magazine 
are  included  in  the  security.  The  real  estate  is  conceded  to  be  injured 
in  value  by  its  proximity  to  racetracks  and  saloons  in  that  vicinity.  The 
official  report  of  the  postoffice  inspectors  speaks  of  the  Woman's  Magazine 
Building  and  plants  as  being  "plastered  with  mortgages."  As  for  the 
tangible  value  of  the  magazine  subscription  lisits,  the  report  calls  atten- 
tion to  the  fact  that  the  magazines  are  being  sent  through  the  mails  on  a  , 
temporary  permit,  which  grants  the  privilege  of  tlie  one  cent  per  pound 
rate.  This  permit  is  subject  to  revocation  at  any  moment,  and  such 
action  is  even  now  under  consideration  in  Washington.     If  this  temporary 


THE  DREYFUS  CASE  OF  AMERICA  463 

privilege  should  be  withdrawn,  the  report  points  out  that  the  value  of 
the  Woman's  Magazine  subscription  list  as  collateral  would  at  once 
shrink  to  practically  nothing. 

The  sequel  will  show  the  contrast  between  this  wilfully  pessi- 
mistic view  and  the  actual  situation.  Lewis  no  longer  stood  alone 
opposed  to  a  powerful  newspaper  and  to  both  the  State  and  Federal 
officials.  Thanks  to  Swanger  himself,  he  now  had  powerful  cham- 
pions in  the  newly  elected  members  of  the  bank's  directors.  This 
interview  with  Governor  Stephens  was  published  the  day  after  the 
receivership  took  place: 

Mj'  own  idea  is  that  the  secretary  of  state  acted  hastily  and  not  in  the 
best  interests  of  the  bank.  The  new  board  has  been  acting  in  good  faith. 
It  supposed  that  the  secretary  of  state  had  confidence  in  every  member 
and  was  heartily  co-operaling.  Mr.  Swanger  gave  us  no  notice  of  his  in- 
tention to  place  the  bank  in  the  hands  of  a  receiver,  but  at  all  times 
expressed  his  entire  satisfaction  with  the  plans  announced  to  him  for  th? 
future  conduct  of  the  bank.  I  believe  that  should  we  have  failed  in  resist- 
ing the  fraud  order  the  board  would  have  considered  the  advisability  of 
the  bank's  immediate  liquidation  and  retirement  from  business.  The 
work  of  liquidation  would  have  been  simple  and  rapid.  The  bank  is  wholly 
solvent.  The  deposits  could  have  been  paid  oif  in  full  in  a  single  day.  "We 
should  have  converted  all  the  remaining  assets  into  cash  as  fast  as  possible. 
With  the  cash  on  hand,  we  should  have  paid  an  immediate  cash  dividend  to 
stockholders.  The  balance  or  final  dividend  could  have  been  paid  as  soon 
as  the  remaining  assets  were  realized  upon.  There  would  have  been  little 
expense  to  the  stockholders,  whereas  the  receiver's  expenses  will  be  very 
great. 

Had  Mr.  Swanger  seen  fit  to  treat  us  with  that  courtesy  with  which 
we  have  endeavored  to  treat  him,  and  conferred  with  us  after  the  fraud 
order  had  been  issued,  while  in  the  city  Sunday  or  Monday,  I  believe  we 
could  have  shown  him  the  absolute  inadvisability  of  the  receivership.  The 
board  feels  that  the  secretary  of  state  has  treated  us  with  discourtesy. 
Mr.  Carter  and  I  went  on  the  board  at  the  request  of  many  of  the  friends 
of  the  inptitution  and  with  Mr.  Swanger's  approval.  In  the  light  of 
developments  I  cannot  understand  why  he  wanted  a  new  board  selected 
at  all,  since  he  has  not,  at  a  critical  time,  seen  fit  to  confer  with  it  on 
matters  of  vital  importance. 

Editorially,  the  Post-Dispatch  ran  a  leader  entitled,  "Credulous 
Investors,"  based  on  the  assertion  of  the  postmaster-general  that 
Lewis'  expectations  as  to  profits  could  not  have  been  fulfilled.  It 
closes  with  these  words:  "If  Secretary  of  State  Swanger  was 
moved  by  timidity  in  his  halting  and  easy  method  of  dealing  with 
Lewis'  bank,  the  dangerous  character  of  which  was  fully  known 
to  him,  his  timidity  is  a  menace  to  the  public."  The  secretary  of 
state  was  evidently  pleasing  no  one. 

All  the  New  York  dailies  of  Tuesday  commented  on  the  bank. 
The  Herald  carried  a  three-quarter  column  St.  Louis  dispatch  sum- 
marizing the  news  published  in  St.  Louis.  The  following  para- 
graphs appealed  to  out-of-town  readers,  and  were  widely  re- 
published throughout  the  country: 

The  holding  up  of  Lewis'  mail  is  quite  as  important  an  incident  in  the 
routine  of  the  local  postolfice,  probably,  as  it  is  to  the  persons  most 
concerned.  Lewis  and  his  banking  interests  were  the  Government's  heav- 
iest customers  in  town,  though  the  Woman's  Magazine  was  responsible  for 


464  THE  SIEGE  OF  UNIVERSITY  CITY 

the  largest  part  of  the  mailing  done  and  received.  Not  since  the  days  of 
the  Arnold  get-rich-quick  schemes  and  others  like  it,  has  an  order  on  the 
postofRce  in  St.  Louis  called  for  the  stoppage  of  so  great  a  quantity  of 
mail  matter.  So  vast  did  the  mail  matter  of  the  People's  Bank  become, 
that  a  branch  postoffice  had  to  be  established  in  the  Woman's  Magazine 
Building  for  its  accommodation.  Here  all  the  stamps  were  bought,  and 
this  was  a  tremendous  incidental  to  the  carrying  on  of  this  rapidly  grow- 
ing business.  Incoming  mail  was  received  at  the  downtown  or  general 
postofBce,  and  was  carted  in  wagons  to  the  private  car  of  Lewis  which 
was  daily  sidetracked  at  Seventh  and  Chestnut  streets,  and  thence  trans- 
ferred in  the  car  to  the  publication  office  ouL  in  the  county.  Out-going 
mail  was  similarly  handled,  the  car  taking  it  downtown  to  meet  the 
wagons. 

The  fraud  order  covers  all  mail  but  that  addressed  to  the  Woman's 
Magazine.  All  matters  of  the  People's  United  States  Bank,  its  agents,  or 
E.  G.  Lewis,  will  be  held  up  and  returned  immediately  to  the  sender  if 
proper  endorsement  graces  the  corner  of  letters. 

One  of  Lewis'  claims  as  to  the  superior  safety  of  the  bank its 

freedom  from  "runs" — was  now  made  good.  The  Globe-Democrat 
of  Wednesday,  the  third  day  after  the  fraud  order,  chronicles  the 
first  symptoms  of  a  "run"  on  the  People's  Bank: 

Two  depositors  appeared  at  the  bank  headquarters  to  demand  their 
money.  Both  were  women.  One  was  middle-aged.  She  carried  a  baby  in 
her  arms.  She  lives  in  St.  Louis  and  has  three  dollars  in  the  bank.  Judge 
Spencer  told  her  to  wait  until  later  in  the  day  and  he  would  pay  her. 
She  left,  saying  she  would  come  back  again.  The  other  was  an  old 
woman  who  lives  in  the  East.  She  was  returning  from  a  visit  to  relatives 
out  West  when  she  read  the  news  about  the  bank,  so  she  stopped  off  in 
St.  Louis  to  draw  her  balance.  Judge  Spencer  assured  her  that  her  deposit 
was  safe,  and  that  she  could  draw  out  the  money  by  mail.  He  advised 
her  to  keep  on  her  journey  home.  Judge  McElhinney  has  authorized  the 
receiver  to  pay  depositors  and  it  was  stated  that  applicants  by  mail 
would  be  forwarded  withdrawal  receipts  for  signature.  Depositors  will 
be  paid  on  presentation  of  their  checks.  Affairs  at  the  Women's  Magazin*; 
Building  quieted  down  yesterday  after  the  flurry  of  Monday.  Lewis  spent 
part  of  the  afternoon  downtown  and  visited  several  of  the  banks. 

The  longer  the  affairs  of  the  bank  were  before  the  people  and 
the  more  they  were  investigated,  the  less  like  a  failure  and  get-rich- 
quick  concern  the  bank  appeared  to  be.  Under  the  sub-title,  "Ex- 
aminer Cook  Explains,"  occurred  the  retraction  of  a  previous  inter- 
view in  which  he  had  been  made  to  say  that  a  loss  of  fifty  per  cent 
to  stockholders  was  anticipated: 

State  Bank-Examiner  R.  M.  Cook  yesterday  made  the  following  explana- 
tion in  reference  to  his  published  statement  that  the  bank  would  pay  back 
fifty  per  cent  to  the  stockholders: 

What  I  meant  was  that  the  receiver  will  be  able  to  pay  back  to  the 
stockholders  from  the  cash  assets  on  hand  fifty  per  cent  on  the  dollar, 
after  the  depositors  are  paid  in  full.  The  bank's  statement  shows  that 
after  paying  off  the  deposits  there  will  be  over  a  million  dollars  on  hand, 
or  nearly  enough  to  ])ay  back  fifty  per  cent  to  the  stockholders,  without 
including  the  assets  in  bonds  and  stocks.  This  is  without  taking  into 
accoimt  tlic  collaternl  hold  as  security  for  loans.  It  leaves  the  final  divi- 
dend to  the  stockholders  to  depend  on  the  amount  which  may  be  realized 
on  the  collateral. 

With  this  remarkable  admission  on  the  part  of  the  examiner  who 


THE  DREYFUS  CASE  OF  AMERICA  465 

had  just  completed  a  thorough  investigation  of  the  bank's  affairs, 
this  chapter  may  be  drawn  to  a  close.  The  whole  history  of  bank- 
ing, it  is  believed,  may  be  safely  challenged  to  produce  a  parallel. 
Why  was  a  receivership  forced  upon  a  bank  that  was  afterwards 
admitted  by  the  receiver,  the  head  of  the  State  banking  depart- 
ment and  the  chief  bank-examiner,  to  be  in  a  position  of  almost 
unexampled  strength  and  safety.''  There  was  hardly  a  dubious 
dollar  in  the  bank's  assets.  It  had  a  million  and  a  half  dollars  in 
cold  cash.  It  had  seventy-five  thousand  dollars  in  Government  gold 
bonds.  The  only  large  items  among  its  assets  that  were  open  to 
question  were  the  loans  to  the  University  Heights  and  Lewis  Pub- 
lishing companies.  Even  these  were  said  by  those  best  qualified 
to  judge  to  be  abundantly  secured.  Four  men  out  of  five  on  the 
board  of  directors  were  outsiders,  who  had  just  come  into  the  bank 
with  the  approval  of  the  secretary  of  state,  expressly  to  safeguard 
its  stockholders  and  depositors.  None  of  them  had  a  dollar  of 
interest  in  any  investments  of  the  bank.  These  men  were  business 
men  and  bankers  of  the  highest  standing.  Their  integrity  and 
the  probity  of  their  intentions  were  above  reproach.  Yet  they 
agreed  that  every  loan  of  the  bank  was  amply  protected. 

HOME    RULE    VS.    FEDERAL    USURPATION. 

The  sequel  to  the  "concerted  action"  thus  taken  by  the  State  and 
Federal  authorities  shows  how  much  more  easily  the  people  can  call 
to  strict  accountability  a  local  or  State  official  than  they  can  reach 
a  Federal  officer  at  the  seat  of  national  power.  For,  as  we  shall 
see  in  the  following  chapter,  the  newspaper-reading  public  of  St. 
Louis  and  throughout  the  State  of  Missouri  was  promptly  told  that 
a  great  wrong  had  been  done  by  the  hasty  and  ill-advised  act  of 
the  secretary  of  state  and  were  given  an  opportunity  to  make  their 
indignation   felt. 

To  bring  Cortelyou  to  book  for  his  act  in  issuing  the  fraud  order, 
six  years  of  agitation  and  a  campaign  of  education  extending  to 
every  part  of  the  United  States  and  costing  many  hundred  of  thou- 
sands of  dollars  has  been  required.  Gradually  a  sufficient  popular 
sentiment  has  been  created  to  bring  about  a  congressional  inquiry. 
But  this  has,  itself,  occupied  many  months  and  has  cost  both  the 
people  and  the  complainant  many  thousands  of  dollars.  In  the  end 
justice  will  be  secured,  but  at  what  a  frightful  cost! 

It  is  by  such  lessons  as  this  that  the  principle  of  home  rule  has 
become  dear  to  every  liberty-loving  race.  The  People's  Bank  was 
the  creature  of  the  state  of  Missouri.  It  was  operated  under  the 
State  laws.  If  the  Federal  authorities  had  not  interfered  with  it, 
through  the  abuse  by  the  postmaster-general  of  the  discretion  re- 
posed in  him  by  an  unwise  Federal  law,  the  People's  Bank  might 
still  be  in  existence.  It  might  today  be  the  source  of  countless 
benefits,  past,  present  and  to  come,  to  thousands  of  men  and  women 
throughout  the  United  States. 


CHAPTER  XXI. 

HOME  RULE  VS.  FEDERAL  USURPATION. 

War  is  Declared — Official  Accountability — Swanger  Under 
Fire — The  Early  Birds — The  Early  Birds  on  the  Grill 
— Ouster  of  the  Early  Birds — Spencer  Asks  $1.73  Per 
Minute — First  Steps  in  Liquidation — Exit  Judge  Spen- 
cer— Campaign  in  the  Federal  Courts — McPherson's 
Opinion — The  Defeat  at  St.  Paul — The  Second  Re- 
ceiver— The  Missouri  Supreme  Court  Decision. 

If  the  conservative,  responsible  element  of  St.  Louis  will  make  a  little 
ring  and  give  me  a  fighting  chance  witli  fair  play  I  will  be  willing  to 
defend  mj"^  acts  against  all  comers.  I  have  built  up  here  in  St.  Louis  the 
largest  publishing  business  of  its  sort  in  the  world.  It  furnishes  bread 
and  butter  for  half  a  thousand  St.  Louis  families.  I  have  built  up  from 
cowpastures  what  promises  to  be  your  most  desirable  residence  district.  I 
have  brought  millions  of  money  into  the  city  and  invested  them  in  such  a 
way  that  I  could  not  possibly  run  away  with  or  profit  personally  by  them 
beyond  the  ordinary  comforts  of  life.  For  years  I  and  my  associates 
have  laliored  night  and  day. 

If  ever  I  liave  an  opportunity  to  demonstrate  wliether  my  new  theories 
of  banking  are  right  or  wrong — as  every  one  who  has  a  dollar  at  stake  in 
them  seems  to  wish  me  to  have,— and  if  the  conservative  banking  element 
then  conclude  them  to  be  wrong,  I  am  willing  to  go  out  of  the  banking 
business.  But  I  do  not  intend  to  be  pushed  out  of  it,  if  I  can  help  it. 
The  dearest  rights  of  an  American  citizen  are  to  be  heard  in  his  own 
defense  and  to  be  confronted  by  his  accusers.  These  rights  are  involved 
in  this  struggle.    All  we  ask  is  a  square  deal. 

WAR    IS    declared. 

Such  was  the  ringing  appeal  for  fair  play  with  which  Lewis 
dismissed  the  newspaper  men  who  came  to  ask  if  the  bank  was 
going  to  put  up  a  fight  against  the  allied  forces  of  State  and  Nation. 
The  bank  would  fight.  That  was  the  message  which  the  reporters 
heralded  through  the  press.  Nor  was  Lewis  to  be  single-handed  in 
the  struggle.  The  newly  elected  board  of  directors  was  thoroughly 
incensed  by  the  failure  of  the  postmaster-general  to  make  good  his 
pledge  of  a  further  hearing  before  himself.  They  smarted  under 
the  affront  that  had  been  put  upon  them  by  the  secretarj'^  of  state. 
While  the  clerks  at  the  St.  Louis  postoffice  were  hard  at  work, 
stamping  the  shameful  word  "fraudulent"  upon  mail  addressed  to 
themselves  as  officials  of  the  bank,  and  while  the  newly  appointed 
receiver  was  exercising  his  authority  by  wiring  the  agency  banks 
all  over  the  country  to  suspend  payment  on  all  People's  Bank 
checks,  the  board  gathered  for  conference.  Men  like  Stephens, 
Carter,  Meyer  and  Coyle  could  not  but  resent  the  idea  of  letters 
addressed  to  them  being  returned  to  the  sender  stamped  "fraudu- 

46G 


THE  DREYFUS  CASE  OF  AMERICA  467 

lent."  The  sentiment  was  unanimous.  To  lie  down  under  the  "con- 
certed action"  of  the  State  and  Federal  authorities  would  amount 
to  an  admission  of  guilt.  The  action  taken  had  been  so  drastic  that 
all  possibility  of  compromise  was  shut  off.  A  flag  of  true  could 
only  suggest  willingness  to  surrender.  Any  attempt  to  conciliate 
an  enemy  so  implacable  would  be  to  show  the  white  feather.  The 
challenge  of  the  allies  against  the  bank  was  as  incapable  of  adjust- 
ment without  a  fight  as  that  of  Spain  against  America,  or  of  the 
Boers  against  England.  Fight  they  must,  and  Lewis  felt  that  he 
had  the  people  on  his  side. 

The  Globe-Democrat  of  July  10  says: 

Lewis  talked  bitterly  about  the  action  of  Secretary  of  State  Swanger 
in  putting  the  bank  into  the  hands  of  a  receiver  and  of  the  methods  of  the 
Postoffice  Department  in  issuing  the  fraud  order.  The  other  directors 
were  reticent  and  would  make  no  comment.  Former  Governor  Lon.  V. 
Stephens  was  the  first  arrival.  There  was  a  long  wait  before  all  had  as- 
sembled, during  which  Mr.  Stephens  divided  the  time  between  occasional 
chats  with  Lewis  and  telling  funny  stories  to  the  reporters.  He  referred 
to  the  directors  as  the  "ex-board"  and  a  "board  without  a  bank"  and  said 
he  didn't  know  what  was  going  to  be  done  until  it  was  done.  After  the 
meeting  Lewis  let  himself  out  in  an  impassioned  declaration  : 

"Fight?  I  should  say  we  are  going  to  fight  to  the  last  ditch,"  he  de- 
clared. "I  consider  the  actions  of  Secretary  Swanger  and  the  postoflBce 
inspectors  unwarranted  to  the  last  degree.  By  these  proceedings  they 
have  utterly  destroyed  my  credit  and  branded  me  from  Maine  to  Cali- 
fornia, all  without  a  cause.  The  bank  is  solvent.  Every  dollar  of  its 
loans  is  good.  A  board  of  directors  of  Secretary  Swanger's  own  selection 
says  so.     Then,  without  any  notice,  he  secures  a  receiver. 

"Fighting  the  Postoffice  Department,  in  a  fraud  order  proceeding,  is 
like  going  against  a  man  with  a  club  in  a  dark  room  with  your  hands 
tied.  There  is  no  trial  or  hearing  worthy  of  the  name.  Assistant  Attor- 
ney-General Goodwin  told  us  in  Washington  that  the  postoffice  inspectors 
had  found  us  guilty  and  that  we  were  so  adjudged  until  we  satisfied  him 
otherwise.  We  could  not  see  the  inspectors'  reports  containing  the 
charges.  We  could  not  do  anything  except  make  a  statement  without 
knowing  what  we  had  to  refute. 

"The  board  was  making  every  effort  to  comply  with  Secretary  Swanger's 
demands  to  take  up  the  two  loans  to  the  Lewis  Publishing  Company  and 
the  University  Heights  Company.  They  were  not  due  until  October.  But 
in  a  few  weeks  we  would  have  had  them  straightened  out." 

The  minutes  of  this  meeting  read  thus: 

The  President  reported  that  a  "Fraud  Order"  had  been  issued  against 
the  bank  and  himself  by  the  postmaster-general  and  that  Judge  Selden  P. 
Spencer  had  been  appointed  receiver  of  the  assets  of  the  bank  by  the 
circuit  court  of  St.  Louis  county,  Missouri,  today.  Mr.  Carter  offered  the 
following    resolution,    which    was    adopted    unanimously: 

Resolved,  that  the  members  of  this  board  hereby  put  on  record  their 
expression  of  protest  against  the  action  of  Hon.  John  E.  Swanger,  secre- 
tary of  State  of  Missouri,  in  procuring  the  appointment  of  a  receiver  of 
the  People's  Bank  upon  an  application  to  the  circuit  court  of  St.  Louis 
county,  Missouri,  without  notice  of  any  kind  to  this  bank  or  any  of  its 
officers,  after  having  expressed  his  entire  satisfaction  with  this  board 
and  with  the  plans  which  it  had  announced  to  him  for  the  future  course 
of  this  bank,  and  while  this  bank  is  in  an  entirely  solvent  condition. 

This  board,  furthermore,  puts  on  record  this  expression  of  its  protest 
against  the  fraud  order  issued  by  the  postmaster-general  of  the  United 


468  THE  SIEGE  OF  UNIVERSITY  CITY 

States,  after  refusing  an  application  for  a  hearing  before  said  postmaster- 
general,  and  refusing,  by  the  assistant  attorney-general  for  the  PostofBce 
Department,  to  permit  the  representatives  of  this  bank  or  its  attorneys 
to  examine  the  reports  of  the  postoffice  inspectors,  whose  statements  had 
been  submitted  to  the  said  assistant  attorney-general  for  the  PostoflSce 
Department  as  part  of  the  evidence  considered  at  the  alleged  hearing  held 
at  Washington,  D.  C,  June  16  and  17,  1905.  This  board  protests  that  there 
is  no  evidence  whatsoever  of  any  improper  action  by  this  bank  and  none 
was  presented  at  said  hearing  or  has  been  presented  at  any  time. 

Resolved,  That  it  is  the  opinion  of  this  board  that  the  action  of  the 
postmaster-general  in  the  matter  aforesaid  is  subversive  of  the  constitu- 
tional rights  of  the  officers  and  stockholders  of  this  bank  and  is  un- 
American  and  a  warning  to  all  citizens  of  the  United  States  that  no  one, 
having  large  or  small  interests  at  stake,  is  immune  from  such  arbitrary 
action,  and  that,  in  our  opinion,  some  correction  of  the  law  and  practice 
upon  that  subject  should  be  invoked  at  the  hands  of  our  representatives 
in  Congress. 

The  following  resolution  was  moved  by  Mr.  Carter  and  seconded  by 
Governor  Stephens:  Resolved,  Tliat  the  attorneys  for  this  bank  be  in- 
structed to  take  such  steps  as  in  their  judgment  may  be  necessary,  to 
cause  to  be  discharged  the  receivership  of  this  bank  this  day  appointed  by 
the  circuit  court  of  St.  Louis  county  and  to  cause  to  be  vacated  the  fraud 
order  heretofore  issued  against  this  bank,  by  the  Postoffice  Department. 

After  voicing  their  protest,  the  officers  of  the  bank  resolved  them- 
selves into  a  council  of  war  to  plan  a  campaign  that  should  wrest 
victory  from  defeat.  The  outlook  seemed  desperate.  All  the 
bank's  resources  were  in  the  hands  of  the  enemy.  Every  dollar  of 
its  funds  was  tied  up  by  the  receivership.  The  incoming  mails 
bearing  succor  were  being  impounded.  Lewis  and  his  associates 
thus  found  themselves  cut  off  from  the  sinews  of  war  and  con- 
fronted by  the  prospect  of  a  double  campaign  of  costly  litigation 
against  opponents  backed  by  unlimited  resources  and  by  the  pres- 
tige of  State  and  Nation.  The  odds  seemed  absolutely  overwhelm- 
ing. Anything  less  than  a  just  cause  must  have  sunk  under  the 
combined  attack.  The  cause  of  the  bank  looked  like  a  forlorn  hope. 
Yet  its  officers  did  not  falter.  Once  the  decision  to  fight  had  been 
recorded,  every  member  of  the  reorganized  directorate  came  out 
in  a  public  interview  declaring  that  an  outrage  had  been  done,  and 
asserting  that  the  bank  would  fight  for  its  rights  to  the  last  gasp. 
The  definite  and  positive  stand  upon  the  side  of  the  bank  taken  by 
such  well-known  St.  Louisans  as  Messrs.  Stephens,  Carter,  Meyer 
and  Coyle  arrested  public  attention.  The  revelation  of  its  solvency 
and  of  the  ample  security  of  its  loans  and  investments  set  people 
to  thinking.  The  events  that  followed  brought  about  a  revulsion 
of  feeling  in  St.  Louis  which  was  vigorously  expressed  in  the  col- 
umns of  the  press. 

OFFICIAL    ACCOUNTABILITY. 

The  helplessness  of  the  citizen  against  Federal  interference  in 
local  affairs  was  illustrated  by  the  comparative  immunity  from 
criticism  of  the  postmaster-general.  Nobody  seemed  to  know  much 
about  the  rights  of  that  official  to  issue  a  fraud  order.  All  the  ma- 
chinery of  the  postal  inspection  service  and  of  the  Department  at 


THE  DREYFUS  CASE  OF  AMERICA  469 

Washington,  whereby  this  fell  stroke  had  been  brought  about,  was 
shrouded  in  mystery.  That  phase  of  the  affair  struck  the  common 
mind  with  a  sense  of  bewilderment.  The  figure  of  the  postmaster- 
general  alone  stood  out  in  the  public  view  fronting  the  blame. 
His  exalted  position,  his  apparent  remoteness  from  any  personal 
interest  in  tlie  People's  Bank,  and  his  prestige  as  a  member  of  the 
President's  official  family,  combined  to  place  him  beyond  the  imme- 
diate reach  of  local  criticism. 

Not  so  as  to  the  secretary  of  state.  The  people  of  Missouri,  and 
especially  of  the  city  of  St.  Louis,  felt  that  Swanger  was  one  of 
themselves.  All  his  comings  and  goings  were  under  the  observance 
of  newspaper  men.  It  was  felt  that  his  every  act  was  properly 
subject  to  public  comment.  The  campaign  of  the  Post-Dispatch 
against  the  People's  Bank  was  still  green  to  memory.  The  recent 
cou})  by  which  that  newspaper  had  thwarted  Lewis'  attempt  to  buy 
a  rival  publication  was  perfectly  well  known  and  understood  by 
the  local  public.  It  was  known  that  the  Post-Dispatch  had  advo- 
cated the  election  of  Swanger;  also  that  it  had  then  asked  him  to 
seize  the  bank,  and  that  it  had  scourged  him  mercilessly  for  his 
hesitant  and  vacillating  policy.  All  of  a  sudden  Swanger  had 
changed  his  mind.  Between  Saturday  night  and  Monday  morning 
he  had  resolved  to  act.  Whence  this  new  impulse?  Why  this  sud- 
den change?  How  account  for  this  mad  rush  after  so  many  weeks 
of  hesitation.  These  questions  flew  from  lip  to  lip,  in  the  business 
offices,  cafes,  streets  and  clubs  of  St.  Louis,  and  out  among  the 
corner  groceries  and  farm  houses  of  the  rural  districts  of  Missouri. 

The  sequel  should  drive  home  to  the  mind  of  every  thoughtful 
citizen  the  dangers  of  encroachment  of  Federal  power  in  local 
affairs.  For  such  is  the  lesson  taught  by  the  contrast  between  the 
ease  with  which  Swanger  was  brought  to  book,  as  compared  with 
the  difficulty  of  reaching  Cortelyou  and  his  aids,  by  which  for  many 
years  they  have  escaped  scot-free. 

The  story  of  the  rout  of  the  secretary  of  state  and  the  ousting  of 
the  first  receiver  of  the  People's  Bank  is  well  worth  the  telling. 
Not  only  is  it  full  of  picturesqueness  and  local  color;  it  also  stands 
out  in  bold  and  significant  contrast  to  the  campaign  against  the 
fraud  order  that  followed  in  the  Federal  courts,  in  which  the  bank 
went  down  to  final  ruin  and  defeat.  The  whole  history  of  the  liti- 
gation of  the  bank  during  the  summer  of  1905  and  after,  shows  that 
under  the  principle  of  home  rule  the  stockholders  and  depositors  of 
the  People's  Bank  could  have  been  adequately  protected  by  the 
State  banking  laws  of  Missouri  as  administered  in  the  Missouri 
courts.  Any  abuse  of  power  by  a  State  official  could  have  been 
promptly  corrected  by  judicial  procedure  and  by  pressure  of  local 
public  opinion.  But  neither  the  stockholders  and  depositors,  nor 
the  officers  of  the  bank  on  their  behalf,  could  protect  themselves 
against  the  usurpation  of  administrative  power  by  a  Federal  official, 
because  of  the  refusal  of  the  Federal  courts  to  intervene.     The  vital 


470  THE  SIEGE  OF  UNIVERSITY  CITY 

issue  of  home  rule  against  the  abuse  of  Federal  power,  thus  sharply 
drawn,  gives  point  to  the  newspaper  controversy  between  the  direc- 
tors of  the  People's  Bank  and  the  secretary  of  state,  and  to  the 
editorial  discussion  of  the  latter's  conduct. 

The  episode  of  the  first  receiver  of  the  bank,  whose  appointment 
Avas  procured  by  Swanger  and  for  the  propriet}^  of  whose  conduct 
he  was  therefore  held  accountable,  adds  a  welcome  bit  of  farce- 
comedy  to  Avhat  is  otherwise  a  grimly  tragic  story,  unrelieved  by  any 
humorous  touch.  For,  like  the  famous  king  of  France  of  nursery 
lore,  the  first  receiver  marched  up  the  hill  at  University  City,  only 
to  march  down  again,  a  sadder,  perhaps  a  wiser,  but  certainly  not 
a  richer  man. 

SWANGER   UNDER   FIRE. 

The  Republic,  in  a  three-column  summary  of  the  events  of  the 
great  day  of  the  joint  attack  and  victory  of  the  allies,  thus  dis- 
cusses the  opening  of  the  bank's  campaign: 

W.  F.  Carter,  a  prominent  attorney,  recently  elected  director  of  the 
People's  United  States  Bank,  last  night  declared  that  Secretary  of  State 
Swanger  has  violated  promises  made  to  the  directors  of  the  bank  and 
through  his  unbusiness-like  methods  has  wasted  over  one  himdred  thousand 
dollars. 

"I  am  unable  to  account  for  the  actions  of  Mr.  Swanger,"  said  Mr. 
Carter.  "He  misrepresented  matters  to  me  without  cause  or  provocation. 
Last  Saturdaj  evening  he  came  to  my  office  to  use  his  own  language, 
'purely  on  a  social  visit.'  He  said  he  was  en  route  to  his  home  in  Jeffer- 
son City  from  down  on  James  river  where  he  had  been  fishing.  He  re- 
mained at  my  office  for  about  an  hour,  and  before  departing  asked  me 
what  steps  1  thought  the  authorities  at  Washington  would  take  in  the 
Lewis  bank  matter.  I  told  him  I  had  received  information  from  a  certain 
congressman  that  the  matter  would  be  satisfactorily  adjusted.  He  de- 
clared tliat  he  could  not  agree  with  me,  but  said  that  if  Lewis  was 
removed  from  the  position  of  president  of  the  institution  and  if  the  two 
notes  amounting  to  eight  hundred  thousand  dollars  were  removed,  the 
matter,  he  believed,  would  be  settled  all  right.  He  declared,  however,  he 
had  not  received  an  inkling  of  what  action  would  be  taken. 

"On  leaving  my  office  he  promised  to  see  me  Sunday  and  also  assured 
me  that  in  the  event  of  a  fraud  order  being  issued  he  would  consult  the 
directors  of  tlie  bank  before  appointing  a  receiver.  About  six  o'clock 
in  the  evening  I  read  the  dispatch  from  Washington  saying  that  a  fraud 
order  would  likely  be  issued.  I  then  realized  the  significance  of  Swan- 
ger's  visit.  I  teleplioned  the  Southern  Hotel,  but  was  told  that  he  was  not 
there.  I  then  telephoned  to  Jefferson  City  and  learned  that  he  had  been 
there  Friday  and  was  not  returning  from  a  fishing  trip  as  he  had  said. 
I  was  unable  to  get  into  communication  with  him  all  Saturday  night  and 
Sunday  morning.  He  did  not  come  to  my  office  as  he  had  promised  to  do. 
From  a  conversation  with  Judge  Spencer  on  Monday,  I  learned  that  he 
and  Swanger  were  together  Saturday  afternoon.  They  appeared  at  the 
courthouse  in  Clayton  before  nine  o'clock  Monday  morning  with  a  .$350,000 
bond  signed  by  tiie  United  State  Fidelity  and  Deposit  Company.  Besides 
the  petition  asking  for  a  receiver,  they  presented  an  exhibit  composed  of 
twenty-five  typewritten  pages.  This  alone  is  enough  to  lead  me  to  believe 
that  they  were  together  the  greater  part  of  Saturday  and  Sunday  prepar- 
ing the  exliibit.  I  have  not  seen  Mr.  Swanger  since  and  he  has  failed  to 
communicate  with  any  of  the  directors  as  he  had  promised." 

The  Chronicle  published  a  statement  attributed  to  Governor  Ste- 


*/4    single   day's    incoming    mail   during    the    reorganization    of    the    Peoples'    United 

States  Bank  as  the  Peoples'  Savings   Trust  Company 

^Average  daily  incoming  mail  of  the  Lewis  enterprises  of  about  5,000  letters 

^Lewis   Publishing   Company's   incoming    mail   of   May   24,    1904,   said    to    contain    26,000 

subscriptions   to    the    Woman's   Magazine 


Two  of  the  incoming;  d  nly  mails  of  the  American   li'omdii's  League 

^Mail   of    the    day    after    Christmas,    J909,    containing    magazine    subscription    orders 

amounting  to  $3s,40j.P2    ",1  l.i"  ■■/■■:lv  ni,iil  ,hiring  a  busy  season,  July  5,   l^io,  containing 

$26,657.22 


THE  DREYFUS  CASE  OF  AMERICA  473 

phens  that  "the  affairs  of  the  bank  would  be  wound  up  by  the  di- 
rectors, if  necessary,  without  expense  and  further  remuneration/' 
with  this  editorial  comment: 

Director  Stephens  is  not  only  a  former  governor  of  iMissouri,  but  a 
banker  of  recognized  skill,  experience  and  integrity.  He  has  wound  up 
many  banks  in  trouble,  notably  one  in  St.  I.ouis,  where,  through  his  skill 
and  industry,  depositors  were  most  agreeably  disappointed  by  the  richness 
of  the  returns. 

The  charges  of  the  directors  that  the  secretary  of  state  had 
broken  his  promises  were  then  dwelt  upon  as  follows: 

The  depositors  and  stockholders  are  largely  of  a  class  that  cannot 
afford  to  lose  anything  that  could  be  saved  for  them.  Therefore,  when 
Secretary  of  State  Swanger's  own  specially  selected  and  loudly  endorsed 
directors  charge  him  with  saddling  on  them  an  entirely  unnecessary  and 
highly  expensive  receivership,  they  are  hitting  him  very  hard  indeed. 
When  they  add  that  to  bring  about  this  unnecessary  and  enormous  expendi- 
tures of  funds  sorely  needed  by  thousands  of  poor  people,  the  secretary 
of  state  violated  his  pledges  and  had  recourse  to  most  remarkable  haste 
and  secrecy  in  getting  to  Clayton  ahead  of  all  comers,  they  put  his  high 
ofiBce  on  a  pillory  from  which  he  must  remove  it  or  take  the  consequences. 

This  editorial  struck  a  popular  chord  and  was,  as  we  shall  see, 
much  discussed  and  quoted.  The  secretary  of  state,  indeed,  appears 
to  have  pleased  no  one  by  his  apparent  willingness  to  carry  water 
on  both  shoulders.  The  Post-Dispatch  of  Wednesday  evening  bit- 
terly assails  him  with  the  charge  that  Lewis  got  thirty-five  thousand 
dollars  in  additional  subscriptions  to  stock  on  the  strength  of 
Swanger's  letter  of  June  2,  i:)ublished  by  the  former  immediately 
after  the  Post-Dispatch  extra,  in  order  to  allay  the  fears  of  the 
stockholders  and  depositors.  Editorially  the  same  newspaper,  how- 
ever, springs  to  the  defense  of  the  secretary  of  state  against  the 
attacks  of  Governor  Stephens  and  other  directors  by  alleging  that 
they  had  failed  to  comply  with  Swanger's  demands.  The  editorial 
thus  concludes: 

The  secretary  of  state  does  not  owe  an  apology  to  the  board  of  directors 
of  this  fraudulent  concern  for  putting  it  in  the  hands  of  a  receiver  after 
the  Federal  postal  authorities  had  put  in  out  of  business.  Rather  he  owes 
the  public  an  explanation  of  his  incomprehensible  conduct  and  his  extra- 
ordinary letter  of  endorsement. 

The  secretary  of  state  promptly  came  out  in  an  interview  in  re- 
sponse to  the  strictures  of  the  bank's  directors.  This  gives  us  the 
first  clear  expression  of  his  views.  It  throws  light,  moreover,  on 
the  mode  whereby  "concerted  action"  can  be  had  between  Federal 
officials  and  State  authorities  when  they  happen  to  be  of  the  same 
political  faith.  The  testimony  of  Director  Carter,  an  unimpeach- 
able witness,  given  before  the  Ashbrook  Committee,  is  of  interest 
in  this  connection.  Mr.  Carter  recalls  that  Swanger  seemed  "anxious 
as  to  what  the  Postoffice  Department  would  do  about  the  bank." 
After  criticising  Governor  Stephens  for  absence  from  the  city  and 
alleged  inaction,  Swanger  says: 

In  explanation  of  my  early  action  in  notifying  the  attorney-generai, 
I  will   sav  that   late   Saturdav   night   I   was   informed   that  the    Postoffice 


474  THE  SIEGE  OF  UNIVERSITY  CITY 

Department  would  put  in  effect  early  Monday  a  fraud  order  against  the 
bank.  I  believed  prompt  action  was  required.  I  took  the  course  I  did  in 
order  that  some  agent  of  the  court  might  be  in  possession  of  the  assets  of 
the  bank  as  soon  as  possible.  When  I  talked  with  Mr.  Carter  on  Saturday 
I  had  no  definite  knowledge  that  the  fraud  order  would  be  issued,  but  told 
him  that  in  the  event  it  was,  I  should  certainly  take  steps  to  take  charge 
of  the  bank.  Mr.  Carter  seems  to  lay  great  stress  on  my  failure  to  meet 
him  on  Sunday,  but  it  was  inconvenient  for  me  to  do  so.  If  I  had  seen 
him  I  could  not  have  imparted  that  information  to  him,  for  that  was  given 
me  under  strict  confidence  of  the  Department  and  then  only  late  Saturday 
night. 

I  do  not  question  the  integrity  of  the  board;  yet  the  fact  remains  that 
they  had  failed  to  comply  with  the  requirements  of  this  department,  although 
given  a  month  to  do  so.  They  were  unable  to  successfully  resist  the  fraud 
order,  although  this  department  gave  them  its  endorsement  and  good-will 
as  a  board  having  its  approval.  At  the  time  the  receiver  was  appointed 
they  were  the  directors  of  a  bank  which  had  been  declared  by  the  Post- 
office  Department,  through  its  highest  officials,  a  fraud.  The  delivery  of 
the  mails  to  E.  G.  Lewis,  the  People's  United  States  Bank,  its  officers  and 
agents  as  such,  had  been  prohibited.  Now,  I  submit,  how  could  the  board 
of  directors  possibly  liquidate  the  affairs  of  the  bank  when  they  were  pro- 
hibited from  receiving  mail.  Imagine  this  board  trying  to  wind  up  the 
affairs  of  this  bank  whose  depositors,  creditors  and  stockholders  are  scat- 
tered all  over  the  United  States  and  some  in  foreign  countries,  when  the 
only  way  one  could  communicate  with  them  was  in  person,  by  messenger  or 
by  the  use  of  telephone,  telegraph  or  express. 

THE   EARLY   BIRDS. 

These  contradictory  interviews  of  Carter  and  Swanger  afforded 
all  the  light  that  the  newspapers  could  throw  on  the  incomprehensible 
suddenness  of  the  latter's  change  of  policy.  Swanger  admitted  that 
the  news  of  the  fraud  order  had  been  imparted  to  him  "under  strict 
confidence  of  the  Department  late  Saturday  night."  More  he  would 
not  say.  The  secrets  of  Federal  interference  in  local  affairs  are 
jealously  safeguarded.  Such  is  the  inscrutable  policy  of  the  De- 
partment. The  true  history  of  the  inner  action  by  which  Fulton's 
policy  of  "concerted  action"  was  put  into  effect,  has  long  been 
snugly  hidden.  Only  by  weaving  together  threads  from  many  lines 
of  investigation  and  by  close  study  of  the  surrounding  circumstances 
has  the  true  interplay  of  personalities  and  motives  been  revealed. 
The  whole  machinery  of  the  courts  of  justice  and  the  Congress  of 
the  United  States  had  finally  to  be  invoked  to  drag  these  matters 
into  the  light  of  day.  At  last  the  story  can  be  made  so  clear  that 
he  who  runs  ma)'  read. 

Inspector-in-Charge  Fulton  wrote  Vickery  that  he  would  try  to 
get  the  help  of  a  State  bank-examiner.  He  told  the  Congressional 
Committee  that  he  went  to  Jefferson  City  to  invoke  the  aid  of 
Swanger  and  afterwards  kept  in  close  touch  with  the  secretary  of 
state.  The  Washington  correspondents  of  the  St.  Louis  dailies  told 
how  someone,  on  the  eve  of  the  hearing  before  Goodwin,  brought 
a  message  to  the  postmaster-general  from  the  secretary  of  state  of 
Missouri.  They  added  that  tlie  postmaster-general  refused  to  give 
to  the  press  the  name  of  this  messenger  or  the  subject  of  his  com- 
munication.    Later,  they  told  how  Cortelyou  wired  to  St.  Louis  on 


THE  DREYFUS  CASE  OF  AMERICA  475 

Saturday  afternoon,  while  the  fraud  order  was  in  the  mails  en  route 
to  St.  Louis,  to  someone  whose  name  he  would  not  disclose.  They 
described  how  he  remained  at  the  postoffice  building  until  mid- 
night of  Sunday  waiting  for  the  word  that  all  was  well,  before  he 
would  give  out  his  memorandum  to  the  press. 

Selden  P.  Spencer,  close  personal  friend  and  political  associate 
of  Swanger,  was  present  as  counsel  for  that  official  at  the  confer- 
ence on  June  2  between  the  State  authorities  and  the  officials  of 
the  bank.  He  afterwards  admitted,  in  a  deposition,  that  he  it  was 
who  waited  on  the  postmaster-general  in  behalf  of  Swanger.  He 
further  recites  that  on  the  Saturday  evening  after  Swanger's  "pure- 
ly social  visit"  with  Director  Carter,  he  (Spencer)  was  closeted 
with  Swanger  in  the  latter's  room  at  the  Southern  Hotel.  Came  a 
knock  at  the  door.  Enter  Fulton  and  the  assistant  postmaster  of 
St.  Louis,  brother  to  Postmaster  Wyman.  They  hold  secret,  whispered 
converse.  Even  Spencer  is  excluded.  They  then  take  their  mys- 
terious departure. 

Swanger  now  admits  to  Spencer  that  the  fraud  order  will  issue. 
Even  to  Spencer  he  will  say  no  more.  Forthwith,  all  negotiations 
with  the  bank  are  broken  off.  Follow  the  activities  of  Sunday:  the 
trip  to  Clayton,  the  preparation  of  the  petition,  the  order  of  court, 
the  exhibit.  Comes  next  the  descent  upon  the  bank  on  Monday 
morning.     The  early  birds  caught  the  worm. 

Was  there  a  prearranged  plan  whereby  the  reward  for  "con- 
certed action"  should  take  the  form  of  secret  advance  news  of  the 
fraud  order,  Did  the  agreement  specify  that  such  news  should 
come  early  enough  to  permit  the  secretary  of  state  to  get  into  court 
and  apply  for  a  receivership,  before  the  officials  of  the  bank  could 
take  that  step,  or  any  other,  in  their  own  behalf?  Why  so  much 
secrecy?  Why  these  mysterious  comings  and  goings?  Why  whis- 
pered conferences?  Why  the  refusal  of  the  postmaster-general  to 
enlighten  the  public  through  the  press  ?  The  courts  of  Missouri  have 
ruled  definitely  that  a  fraud  order  issued  by  the  Federal  Government 
is  an  act  with  which  the  State  banking  department  of  Missouri  had 
not  the  slightest  concern.  Did  not  all  who  took  part  in  these  secret 
conferences,  these  agreements,  these  prearrangements  whereby  "con- 
certed action"  was  brought  about,  know  the  law?  Did  they  per- 
chance suspect  that  a  "gentleman's  agreement"  among  them  as  to 
"concerted  action"  would  not  bear  close  inspection  in  the  light  of 
day?  Is  it  not  conceivable  that  these  two  astute  and  ambitious  poli- 
ticians were  aware  that  the  people  of  Missouri  would  be  quick  to 
resent  Federal  dictation  or  interference  in  the  relations  of  the  State 
authorities  with  a  local  institution? 

THE    EARLY    BIRDS   ON   THE    GRILL. 

That  the  explanation  of  the  secretary  of  state  was  not  acceptable 
to  the  local  public  is  clearly  shown  by  extracts  taken  from  the  news- 
papers of  St.  Louis  city  and  St.  Louis  county.  The  belief  was 
evidently  general  that  Swanger's  haste  was  due  to  motives  of  self- 


476  THE  SIEGE  OF  UNIVERSITY  CITY 

interest,  rather  than  to  those  of  official  duty.  He  was  freely  and 
publicly  accused  of  sacrificing  the  welfare  of  the  investors  in  the 
People's  Bank,  in  order  to  pay  political  debts  by  securing  a  fat 
receivership  for  an  influential  friend,  and  by  placating  an  offended 
newspaper  ally.  The  action  of  the  court  in  dismissing  the  receiver- 
ship left  him  defenseless  against  these  criticisms.  Nor  did  the 
conduct  of  the  receiver  for  whose  selection  he  was  responsible  ap- 
prove his  judgment.  For  the  receiver,  as  we  shall  see,  attempted  to 
charge  the  bank  a  fee  which  was  generally  thought  to  be  extortion- 
ate. Nor  did  he  yield  gracefully  to  public  protest,  or  even  to  the 
decision  of  the  courts,  but  persisted  in  his  demands  with  a  degree  of 
ardor  worthy  of  a  better  cause.  None  of  these  events,  as  current 
newspaper  comments  show,  were  lost  sight  of  by  the  lynx-eyed 
gentlemen  of  the  press.  The  Globe-Democrat  of  Tuesday,  July  11, 
chronicled  the  first  news  of  the  bank's  campaign  of  defense: 

Attorneys  for  Lewis  filed  a  motion  in  the  circuit  court  at  Clayton  yes- 
terday afternoon  to  vacate  the  receivership  ordered  Monday  by  Judge  Mc- 
Elhinney.  The  petition  sets  up  nine  counts  why  the  court  should  set  aside 
the  receivership.  The  general  ground  is  that  the  court  exceeded  its  au- 
thority under  the  Missouri  statute.  Notice  was  served  on  Receiver  Spencer 
to  give  hirn  an  opportunity  to  appear  and  contest  the  motion.  The  motion 
argues  that  the  court  has  no  jurisdiction  to  appoint  u  receiver  when  a  bank 
is  solvent,  except  in  cases  where  its  continuance  in  business  would  seriously 
jeopardize  the  depositors.  The  order  is  void,  it  is  alleged,  because  it  was 
issued  without  notice  to  the  bank's  officers  and  without  proof  of  facts  suffi- 
cient to  warrant  it.  No  rule  was  made  for  the  officials  of  the  bank  to  show 
cause  why  the  order  should  be  made.  They  were  thus  deprived  of  the  op- 
portunity to  be  heard.  There  was  no  call  to  show  the  bank's  condition. 
Other  reasons  assigned  are  that  it  is  an  absolute  decision  without  a  hear- 
ing; that  the  bond  for  $250,000  is  to  the  state  and  does  not  indemnify  the 
slockholders;  that  the  bond  is  worthless,  as  it  affords  no  protection;  that 
the  petition  states  no  ground  for  a  receivership,  was  not  verified  by  oath 
of  any  officer,  and  is  contrary  to  the  Constitution,  which  guarantees  im- 
munity from  unreasonable  seizure  of  property  without  proper  process. 

A  note  of  more  intimate  knowledge  of  the  inner  workings  of 
how  all  these  things  were  brought  about  now  begins  to  be  heard. 
The  Censor  and  the  Mirror  came  out  on  Thursday  and  devoted 
much  space  to  the  bank's  affairs.     Said  the  Censor: 

They  have  poor  Lewis  down  at  last,  and  are  wiping  their  feet  on  him. 
The  thing  was  inevitable;  for  Lewis  boldly  entered  into  competition  with 
Ihe  Big  Cinch,  the  gang  that  owns  and  exploits  everything  to  its  own  profit 
in  this  town.  Lewis  was  securing  depositors  from  the  country.  This  would 
lessen  the  financial  strength  of  the  country  banks  which  are  the  feeders 
of  the  Big  Cinch,  a  perquisite  that  belongs  exclusively  to  itself.  The  Big 
Cinch  is  very  powerful.  There  is  scarcely  a  doubt  that  it  exercised  in- 
fluence at  Washington  to  have  the  order  issued  to  put  I>ewis  down  and  out. 
When  the  Big  Cinch,  tlirough  action  at  Washington,  had  hira  going,  th? 
jiolitical  curs  in  Missouri  rushed  forward  to  complete  the  process  of  throw- 
ing him  down  and  taking  his  money  away  from  him.  The  daily  newspapers 
likewise  joined  the  hue  and  cry. 

Even  if  all  they  say  about  Lewis  is  true,  he  is  no  worse  than  the  sordid 
motives  that  worked  his  undoing.  While  his  scheme  was  original  and  had 
some  peculiarities  of  get-rich-quick  nature,  it  has  not  yet  been  demon- 
strated that  it  would  not  wf)rk  out  as  he  said  it  would — yea,  even  as  he 
believed  it  would.     The  loaning  to  himself  of  the  money  of  the  bank,  and 


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Letters  hy  Lezvis  to  himself  and  ether  officers  of  the  Peoples'  United  States  Bank; 
mail  of  the  Lewis  Publishing  Company;  household  mail,  and  personal  mail  of  Mr.  and 
Mrs.  Lewts,  including  picture  post-card,  all  stamped  ''Fraudulent."  These  envelopes 
illustrate  the  sweeping  nature  of  the  fraud  order  and  the  abuses  to   which  it   is  liable 


'CHAW    BACON"    SAYS    UNCLE   SAM 


rE'H^?E^r!^FE£'2^S^aHHS 


July,   J905 
Riner  in  1908 


THE  DREYFUS  CASE  OF  AMERICA  479 

the  making  of  everybody  but  himself  figureheads,  may  look  bad;  but,  from 
the  temperamental  peculiarities  of  Lewis,  I  am  convinced  that  he  was 
tempted  to  this  action  by  what  he  believed  were  opportunities  for  big 
profits.  Whatever  defects  his  plan  may  have  had,  Lewis'  enemies  have 
not  jet  shown  that  he  was,  in  cold-blood,  trying  to  promote  a  scheme  to 
swindle  people.     That  is  significant. 

His  scheme  may  have  been  doomed  to  failure.  I  should  rather  say  that 
he  was  a  victim  of  his  own  optimism.  He  is  peculiarly  a  man  of  ideals 
and  enthusiasms.  A  get-rich-quick  swindler  would  never  have  done  what 
Lewis  had  done.  He  would  never  have  been  fool  enough  to  put  his  money 
into  a  costly  building;  employ  four  or  five  hundred  people  on  model  lines; 
cultivate  the  beautiful  as  well  as  the  useful;  try  to  become  a  model  em- 
ployer; set  up  a  pressroom  that  is  the  finest  outside  of  New  York  or  Chi- 
cago; invest  large  sums  in  the  development  of  real  estate.  A  cynic  will 
of  course  say  that  these  substantialities  were  but  the  "suckers'  bait."  They 
are  far  too  substantial  for  that,  and  too  expensive.  As  a  mere  lure,  a 
better  showing  could  have  been  made  on  the  expenditure  of  far  less  money 
and  especially  far  less  thought,  enthusiasm  and  finish  than  Lewis  has  em- 
ployed. 

If  he  is  a  fraud,  as  his  enemies  allege,  he  has  worked  his  game  to 
mighty  poor  profit  to  himself.  Out  of  something  like  three  millions  of  dol- 
lars, about  nine  hundred  thousand  dollars  is  charged  to  himself,  and  he 
has  claimed  all  along  that  for  this  the  bank  holds  good  collateral.  Much  of 
it  is  supposed  to  be  invested  in  real  estate  which  is  as  good  as  money. 
Even  in  this  crisis  Lewis'  optimism  does  not  desert  him.  After  vehement 
protest  that  his  bank  is  entirely  solvent  (which  it  seems  is  not  disputed), 
he  says  he  will  take  his  case  to  the  Federal  courts  and  secure  justice.  It 
takes  optimism  to  say  this  and  believe  it.  The  Big  Cinch  is  against  him. 
He  is  an  enemy  to  the  existing  order.  Is  it  likely  then  that  any  court  will 
give  him  relief?     I  doubt  it. 

This  stricture  of  an  irresponsible  local  newspaper  upon  the 
probable  attitude  of  the  Federal  judiciary  strikes  a  jarringly  dis- 
cordant note  to  the  ear  of  every  thoughtful  citizen.  All  would  fain 
believe  that  a  time-serving  corporation  lawj^er  or  a  capable  pot- 
house politician^  can  be  turned  into  an  incorruptible  guardian  of 
popular  liberty  by  simply  wrapping  him  in  a  black  robe  and  plant- 
ing him  on  a  woolsack.  Stern  reality  has  taught  the  people  that 
no  such  magic  transformation  can  occur.  The  dog  will  go  back  to 
his  vomit  again.  The  sow  that  was  washed  will  return  to  her  wal- 
lowing in  the  mire.  The  noble  traditions  of  the  Anglo-Saxon  judi- 
ciary are  still  upheld  by  the  Federal  bench  as  a  whole.  Doubtless, 
they  work  powerfully  to  restrain  human  prejudice  and  passion. 
But  that  mere  political  appointees  who  become  judges  cease  thereby 
to  be  men  of  like  passions  with  ourselves  is  a  notion  that  experience 
does  not  sustain,  as  the  present  popular  demand  for  the  recall  of 
judges  fully  testifies.  The  sequel  will  show  that  in  this  case  the 
editor  of  the  Censor  turned  oxit  to  be  no  bad  prophet. 

The  Censor  further,  under  the  title,  "Spencer's  Snap,"  contrib- 
utes thus  to  the  element  of  farce-comedy: 

Judge  Selden  P.  Spencer  is  a  shining  example  to  the  Y.  M.  C.  A.,  and 
one  of  the  prominent  churchmen  in  the  city.  He  is  rated  among  the  ultra- 
godly.  He  has  that  extreme  respectability  which  pains  the  victim  lest 
something  should  happen  that  is  not  altogether  proper.  *  *  *  Despite 
the  fact  that  he  is  a  strong  believer  in  the  odious  "lid,"  he  is  not  the  sort 
of  a  man  to  allow  the  Lord's  Day,  or  his  great  religious  pose,  to  interfere 


480  THE  SIEGE  OF  UNIVERSITY  CITY 

with  matters  that  have  such  pith  and  substance  as  the  Lewis  receivership. 
The  judge  evidently  regards  this  as  a  "work  of  necessity." 

The  fraud  order  was  received  by  Postmaster  Wjman  at  9  a.  m.  Mon- 
day. Half  an  hour  afterwards  the  announcement  of  the  appointment  of 
u  receiver  was  made.  In  such  an  affair  it  is  necessary  to  draw  up  a  long 
})etition  for  a  receivership,  make  out  a  formal  order  for  the  court  to  sign, 
and  draw  up,  sign  and  have  witnessed  the  bond  of  the  receiver.  All  this 
clerical  work  would  require  perhaps  a  half-day's  time.  There  is  no  ques- 
tion that  all  these  papers  were  drawn  before  the  fraud  order  reached  St. 
Louis.     They  were  drawn  on  Sunday. 

It  is  easy  to  imagine  what  happened.  Before  Swanger  could  reach 
Carter  to  complete  the  matter  of  the  receivership,  he  was  nailed  by  Spen- 
cer. Spencer  had  just  returned  from  Washington.  This  in  itself  is  a  thing 
most  significant.  He  evidently  had  inside  information  as  to  the  issuance 
of  the  fraud  order.  Perhaps,  he  even  helped  to  promote  it  and  drew  his 
fee  from  the  Big  Cinch  for  doing  it,  or  else  began  away  back  there  to 
create  himself  a  receivership. 

Not  the  least  ugly  feature  is  the  voluntary  action  of  Spencer  in  peti- 
tioning to  have  his  own  bond  increased.  This  is  not  because  Spencer  is 
afraid  of  his  own  honesty,  as  might  appear;  but  is  due  to  his  desire  to 
increase  his  percentage  of  commission,  as  it  seems  the  commission  varies 
in  amount  with  the  size  of  the  bond.  The  receiver  now  thinks  the  bank 
will  pay  seventy-five  per  cent  on  the  dollar.  It  would  pay  one  hundred 
cents  on  the  dollar,  if  not  forced  to  pay  for  the  receivership. 

Yet  the  deal  was  fixed  on  Sunday,  the  holy  day,  on  which  all  forms  of 
labor,  not  to  single  out  labor  which  involves  the  working  out,  covertly,  of 
a  politico-financial  job,  is  absolutely  forbidden !  And  here  was  this  ex- 
emplar of  the  coldest,  most  Puritanical  conception  of  religion,— this  monitor 
to  v/icked  men  who  were  not  averse  to  a  sinful  glass  of  beer  on  this  terri- 
fying day, — out  at  Clayton,  putting  up  a  job  through  underhanded  political 
pull,  to  beat  all  rivals  to  this  rich  receivership. 

The  public  disapproval  of  this  hasty  action  became  daily  more 
apparent.  The  two  St.  Louis  county  local  papers,  the  Argus  and 
the  Watchman-Advocate,  of  July  14  now  took  a  hand  in  the  con- 
troversy. The  Advocate  quoted  from  the  Star-Chronicle  editorial 
alread)'^  given,  which  appears  to  have  struck  a  note  of  popular  ap- 
proval, and  voiced  this  conclusion: 

The  unwarranted,  hasty  action  of  Mr.  Swanger  in  this  matter  was  noth- 
ing short  of  a  high-handed  proceeding.  It  certainly  lays  him  open  to 
severe  and  uncomplimentary  criticism.  Unless  he  is  capable  of  offering 
a  more  convincing  explanation  than  he  has  yet  made,  public  confidence  in 
him  and  his  official  character  will  remain  severely  and  unalterably  shaken. 

The  Argus,  in  addition  to  a  lengthy  news  item  in  which  it  is 
alleged  that  "Judge  Spencer  was  named  to  take  charge  of  the  bank, 
in  pursuance  of  what  seems  to  be  a  previously  concocted  scheme 
between  himself,  Swanger  and  Attorney-General  Hadley,"  prints 
a  lengthy  editorial,  from  which  some  paragraphs  may  be  quoted  as 
showing  the  way  in  which  the  receivership  was  looked  upon  as  legal 
spoil : 

Judge  Selden  P.  Spencer  is  at  last  in  a  position  to  receive  his  reward 
for  the  strenuous  manner  in  which  he  whooped  it  up  for  the  Republican 
ticket  in  Missouri  last  year.  The  position  as  the  receiver  of  the  People's 
United  States  Bank  is  a  bigger  slice  of  pie,  so  far  as  money  is  concerned, 
than  all  the  other  spoils  of  victory  that  have  or  will  come  to  the  Republican 
party  in  Missouri  during  the  present  administration.  Spencer  was  slated 
tor  a  certain  judgeship,  but  lost  out.     He  received  a  number  of  votes  for 


THE  DREYFUS  CASE  OF  AMERICA  481 

Cockrell's  seat  in  the  United  States  Senate,  but  was  not  elected.  His  ap- 
pointment as  receiver  of  the  Lewis  bank  was  plainly  prearranged.  There 
is  not  a  bit  of  doubt  that  the  scheme  was  concocted  between  himself  and 
the  secretary  of  state,  when  the  investigation  first  revealed  the  fact  that 
the  bank  was  iiliely  to  become  a  target  for  oiBcial  interference. 

Swanger  "happened"  to  be  in  St.  Louis  on  Saturday  night  when  the 
first  "confidential"  information  was  noised  about  that  the  bank  would  on 
Monday  morning  be  denied  the  mails.  In  a  drizzling  rain  on  Sunday  morn- 
ing *  *  *  he  got  his  good  friend,  Spencer,  and  together  they  came 
to  Clayton,  where  it  was  arranged  that  a  receivership  should  be  applied 
for  early  Monday.  When  court  opened  they  were  on  hand.  Judge  Spencer 
had  his  bond  ready.  Lewis  was  neither  warned  nor  notified  of  what  was 
to  take  place.  He  was  kicked  out  summarily  and  without  opportunity 
for  defense  or  explanation.  Judge  Spencer  was  installed.  The  political 
debt  of  Swanger,  Hadley  and  Company  was  paid. 

Thus  frankly  are  the  official  acts  of  State  and  local  officers  sub- 
ject to  public  scrutiny  and  analysis.  Meantime,  what  of  the  real 
author  of  all  this  mischief,  George  Bruce  Cortelyou.''  Back  East, 
a  thousand  miles  away,  surrounded  by  the  adulation  of  official 
Washington,  he  sat  like  the  high  gods  upon  Olympus,  in  an  at- 
mosphere remote  from  the  noisy  strife  of  tongues.  As  to  him,  the 
press  was  silent.  The  voice  of  criticism  was  still.  For  one  thing, 
the  St.  Louis  public  hardly  knew  the  man.  He  was  too  far  away. 
For  another,  it  is  not  well  for  a  newspaper  to  antagonize  the  guar- 
dians of  the  mails.  Nor  does  a  Washington  correspondent  prosper 
who  criticizes  too  freely  the  official  conduct  of  influential  members 
of  the  Cabinet.  Not  a  single  daily  newspaper  in  St.  Louis  lifted  its 
voice  in  earnest  protest  against  the  act  of  the  i^ostmaster-general  in 
issuing  the  fraud  order  itself. 

The  State  authorities  of  Missouri,  meanwhile,  despite  all  criti- 
cism, had  no  idea  of  giving  up  the  bank  without  a  struggle.  Even 
after  their  motives  had  been  impugned  as  mercenary,  they  insisted 
upon  the  legality  and  propriety  of  their  course  and  prepared  to 
defend  their  action  in  the  courts.  The  Post-Dispatch,  on  July  14, 
hit  off  the  humor  of  the  situation  in  the  two-column  cartoon  entitled, 
"Typewriter  Pyrotechnics,"  reproduced  elsewhere.  It  also  ran  an 
editorial  leader  entitled,  "Culpable  Bank  Management,"  criticising 
equally  the  secretary  of  state  and  the  People's  Bank  officials.  Under 
the  title,  "Continuance  Taken  in  Case  of  Lewis'  Bank,"  it  says: 

Arguments  for  and  against  the  motion  to  set  aside  the  receivership  of 
the  People's  United  States  Bank  were  heard  before  Judge  McElhinney 
today  and  the  hearing  was  continued  until  Saturday  morning  to  enable 
Attorney-General  Hadley  to  look  up  authorities.  He  stated  that  the  Peo- 
ple's United  States  Bank  was  "an  unusual  and  extraordinary  institution 
and  required  closer  scrutiny  than  others"  *  *  *  He  was  not  prepared, 
he  said,  to  dispute  at  once  the  contentions  of  the  attorneys  on  the  other 
side.     He,  therefore,  asked  for  time  to  consult  authorities. 

"On  Saturday,"  says  the  Globe-Democrat,  "Receiver  Selden  P. 
Spencer,  by  his  attorneys,  filed  an  inventory  showing  that  the  assets 
of  the  People's  United"  States  Bank  totaled  $2,679,244.74."  A  list 
of  the  assets  was  published  in  full  in  both  of  the  morning  papers, 
the  Republic  adding:     "The  report  is  voluminous.     It  consists  of 


482  THE  SIEGE  OF  UNIVERSITY  CITY 

five  exhibits  comprised  in  fifteen  closely  typewritten  pages.  The 
receiver  stated  that  he  had  placed  for  collection  such  loans  as  were 
already  due,  except  that  for  the  promotion  expenses,  which  had  not 
yet  been  adjusted."  Under  the  sub-title,  "Lawyers  Criticise  Swan^- 
er,"  the  Republic  carried  an  item,  the  effect  of  which  on  current 
public  opinion  in  St.  Louis  was  decisively  against  the  State  officials 
and  which  foreshadowed  the  final  action  cf  the  courts.     It  says: 

Isaac  H.  Lionberger,  former  Assistant  United  States  Attorney-General 
and  a  prominent  member  of  his  profession  in  St.  Louis,  declared  yesterdaj 
that  he  regarded  the  action  of  Secretary  of  State  Swanger  as  being  hastj 
and  unwarranted.  He  said  the  case  had  caused  unusual  comment  among 
members  of  the  St.  Louis  bar  and  that  the  majority  were  of  the  same  opin- 
ion as  he.  *  *  *  "While  I  do  not  criticize  the  postmaster-general," 
said  Mr.  Lionberger,  "I  do  say  that  the  appointment  of  the  receiver  is  cal- 
culated to  arouse  the  gravest  suspicions." 

OUSTER   OF  THE  EARLY  BIRDS. 

A  marked  falling  off  in  the  number  of  newspaper  clippings  from 
the  out-of-town  press  on  Monday,  July  17,  seemed  to  indicate,  how- 
ever, that  the  nine  days'  wonder  over  the  bank  had  about  run  its 
course.  Then,  suddenly,  the  people  of  St.  Louis  were  electrified  and 
national  interest  was  revived  by  the  startling  news  thrown  on  the 
streets  as  "extras"  on  that  day  by  the  St.  Louis  evening  papers. 
The  receiver  had  been  ousted  and  the  bank  returned  to  the  custody 
of  its  own  officials.  So  intense  was  the  local  interest  that  the  Post- 
Dispatch  not  only  brought  out  the  story  as  an  "extra,"  but  ran  it 
under  no  fewer  than  four  separate  make-ups  in  course  of  the  after- 
noon. Under  the  title,  "Court  Dissolves  Lewis  Receivership:  Blames 
Swanger,"  the  Post-Dispatch  thus  tells  the  story: 

Judge  McElhinney,  today,  ordered  the  dissolution  of  the  receivership  of 
the  People's  United  States  Bank.  He  directed  the  receiver  to  make  a  re- 
port to  the  court  of  his  accounts.  Notice  of  the  court's  decision  was 
served  on  the  receiver  by  the  sheriff.  The  receiver  notified  Lewis  of  the 
court's  action,  surrendered  the  bank  and  left  the  banking  room.  By  this 
decision.  Judge  McElhinney  sustained  the  motion  of  the  attorneys  for 
Lewis,  filed  and  argued  last  week.  He  revoked  the  order,  issued  a  week 
ago,  on  which  Judge  Spencer  was  appointed.  In  announcing  his  decision 
from  the  bench  at  the  opening  of  the  court.  Judge  McElhinney  stated, 
merely,  that  he  was  without  jurisdiction.     To  a  reporter  he  said: 

"I  revoked  the  receivership  order  chiefly  on  the  ground  that  no  state  of 
insolvency  liad  been  shown.  Secretary  of  State  Swanger  had  no',  even 
taken  cliarge  to  ascertain  whether  the  condition  was  unsafe.  *  ^  *  It 
is  plainly  the  intention  of  the  law  that  the  secretary  of  state  should  as- 
sume charge  of  the  bank  and  ascertain  its  condition  before  asking  for  a 
receiver.  The  application  was  illegal.  This  was  the  decisive  feature  of 
the  case." 

Judge  Spencer  refused  to  discuss  the  court's  action.  He  was  asked 
what  the  cost  of  the  receivership  would  lie,  which  the  State  will  now  have 
to  pay,  but  said  he  did  not  know.  One  item  of  five  thousand  dollars  is  for 
Spencer's  million  dollar  surety.  Secretary  of  State  Swanger,  interviewed 
at  Jefferson  City,  stated  that  the  decision  was  an  entire  surprise.  It 
seemed  to  him  to  have  been  given  under  a  misapprehension  of  the  law. 
He  stated  that  in  his  judgment  the  court  failed  to  grasp  the  real  point 
of  the  case. 


THE  DREYFUS  CASE  OF  AMERICA  483 

If  anyone  ever  doubted  that  University  City  was  in  a  state  of 
siege,  the  above  facts  ought  to  convince  him.  The  Star-Chronicle 
announced  the  news  that  the  receiver  had  been  ousted,  in  a  two- 
column  article,  which  read  thus: 

The  directors  of  the  People's  United  States  Bank  will  resume  control 
following  the  court's  decision  ousting  the  receiver.  They  went  into  execu- 
tive session  at  1:00  p.  m.,  for  the  purpose  of  determining  whether  or  not 
anj  more  money  should  be  returned  to  depositors.  Only  about  twenty- 
five  thousand  dollars  has  thus  far  been  returned.  The  bank's  books,  papers 
i'.nd  funds  are  now  in  charge  of  the  president  and  directors.  Until  a  for- 
mal charge  of  insolvency  is  preferred  the  People's  United  States  Bank 
will  be  open  for  business. 

The  return  of  the  bank  to  its  own  officers  once  more  put  them  in 
control  of  a  well-supplied  war  chest.  The  directors  met  immediate- 
ly to  put  the  bank  into  a  posture  of  defense  and  to  plan  a  further 
campaign  against  the  postmaster-general  in  the  Federal  courts.  The 
effect  of  the  ouster  of  the  first  receiver  was  to  confirm  the  feeling  in 
local  business  and  banking  circles  that  an  outrage  had  been  done, 
and  to  revive  public  sympathy  for  the  distressed  institution.  Hard- 
ly had  the  directors  assumed  charge  of  the  bank,  moreover,  than  it 
was  found  that  the  first  receiver  had  fixed  the  value  of  his  services 
while  "clothed  with  a  little  brief  authority,"  at  the  sum  of  twelve 
thousand  dollars.  Furthermore,  with  regard,  doubtless,  to  the 
maxim  that  possession  is  nine  points  of  the  law,  he  had  deposited 
that  sum,  subject  to  the  order  of  the  court,  in  another  bank. 

SPENCER  ASKS   ONE   DOLLAR  AND   SEVENTY-THREE    CENTS   PER    MINUTE. 

This  was  more  than  the  public  could  stand.  Not  only  did  Lewis 
and  the  directorate  of  the  bank  denounce  this  proceeding.  Practi- 
cally, the  entire  press  of  St.  Louis  exploded  with  indignation,  sar- 
casm and  invective.  The  sympathy  of  the  public  was  by  this  time 
pretty  definitely  with  the  People's  Bank.  It  became  the  common 
gossip  of  the  streets  that  an  attempt  had  been  made  to  wreck  a 
solvent  institution  in  the  interests  of  a  group  of  political  spoilsmen. 
The  extent  to  which  the  pressure  of  the  Federal  administration  had 
been  brought  to  bear  upon  the  secretary  of  state  was  hidden  from 
the  press.  The  part  played  by  Federal  spies,  the  postoffice  inspec- 
tors, in  their  secret  goings  and  comings,  their  mysterious  conferences 
with  the  officials  of  the  State  banking  department  in  hotel  rooms 
and  other  private  places,  was  not  known.  All  this  was  decently 
screened  from  public  view.  Swanger,  in  short,  was  left  in  the  role 
of  the  cat  which  pulled  the  monkey's  chestnuts  out  of  the  fire. 
Practically  tlie  whole  onus  of  newspaper  criticism  rested  upon  him. 

Had  the  secretary  of  state  and  the  first  receiver  acquiesced  in 
the  decision  of  the  court,  they  would  have  been  spared  much  of  the 
agitation  and  criticism  which  followed.  True,  Judge  Spencer  an- 
nounced that  he  would  not  personally  contest  the  motion  to  vacate 
the  receivership,  because,  as  an  officer  of  the  court,  he  was  not 
properly  a  party  to  the  controversy.  That  duty,  he  said,  devolved 
upon  the  State  officials.     The  secretary  of  state  and  the  attorney- 


484  THE  SIEGE  OF  UNIVERSITY  CITY 

general,   however,    promptly    took    up    the    cudgels    in    his    behalf. 

Both   sides  were  now   fighting  bitterly.      The  newspaper   agitation 

and  discussion  was  thus  prolonged.     Under  the  title,  "Swanger  and 

the  Bank,"  the  Republic  thus  comments  editoriallj'^ : 

By  revoking  the  order  which  threw  the  People's  United  States  Bank 
into  receivership,  Judge  McElhinney  imphedly  raps  the  eminent  secretary 
of  state  over  the  knuckles  for  hot  haste  and  disregard  of  the  shareholder's 
interest.  *  *  *  Proceeding  evidently  on  the  notion  that  it  is  the  early 
bird  that  catches  the  worm,  jMr.  Swanger,  accompanied  by  his  warm  friend, 
the  receiver,  had  gone  to  Clayton  bright  and  early  at  the  first  possible  op- 
portunity after  the  issuance  of  the  fraud  order.  Everything  was  in  a  state 
of  preparation  in  so  far  as  their  petition  and  bond  were  concerned.  They 
procured  the  receivership  order  without  notice.  *  *  *  The  public  will 
not  soon  forget  this  conduct  of  the  secretary  of  state.  He  is  seen  to  have 
been  too  zealous  on  the  side  of  placing  a  political  favor.  *  *  *  It  was 
a  crude,  a  raw  piece  of  business.  It  was  an  abuse  of  office.  Was  it  not 
an  attempted  spoils-grabbing  by  a  State  functionary  in  the  interests  of 
politics  and  party. 

Meanwhile,  some  bitterness  was  being  shown  among  the  attack- 
ing forces.  The  Post-Dispatch,  commenting  editorially  on  "Mr. 
Swanger's  Responsibility,"  says: 

It  is  a  pity  that  the  insufficiency  of  the  petition  did  not  occur  to  the 
court  before  the  order  for  a  receivership  was  issued.  The  mess  caused  by 
the  bungling  of  all  the  parties  to  the  receivership  is  not  an  edifying  spec- 
tacle. 

Lewis'  friend,  the  Star-Chronicle,  on  Tuesday  remarks: 
Somebody  blundered,  and  blundered  so  badly  that  the  State  or  some 
one  besides  the  bank,  must  lose  seven  thousand  dollars  and  whatever  costs 
may  accrue  to  put  the  concern  back  where  it  was.  The  contention  that 
the  bank  should  pay  these  sums  seems  to  a  layman  as  preposterous  as 
would  the  claim  of  a  burglar  caught  in  the  act,  for  the  loss  of  dynamite 
used  to  get  in,  the  tools  captured  by  the  police  and  the  time  spent  in  pre- 
paring for  and  carrying  out  the  raid. 

Then  came  the  item  of  news  above  mentioned  touching  the  enor- 
mous fees  claimed  by  the  receiver  for  his  services.  This  was  first 
published  in  the  Thursday  moi'ning  papers  July  20.  It  gave  new 
zest  to  the  newspaper  scandal  touching  the  first  receivership.  The 
Republic  devotes  two  columns  to  the  "day's  events  in  the  Lewis  bank 
case"  under  the  heading,  "Spencer's  Fees  $12,000."  The  article 
proceeds : 

Judge  Selden  P.  Spencer,  the  ousted  receiver  of  the  People's  United 
States  Bank,  had  deposited  $12,100  of  the  bank  funds  in  the  St.  Louis 
County  Bank  at  Clayton  for  his  fees  and  the  expenses  of  ten  days'  admin- 
istration of  the  assets  of  that  institution.  This  item  was  stated,  among 
others,  in  Spencer's  final  report  to  Judge  McElhinney  in  the  Clayton  Cir- 
cuit Court.  Of  this  amount,  it  was  said  the  receiver  paid  $5,000  for  a 
bond.  His  attorneys  will  probably  receive  about  $1,000.  Tyrell  Williams, 
a  young  attorney  in  Judge  Spencer's  office,  was  paid  one  hundred  and  fifty 
dollars  for  three  opinions  he  gave  last  week.  The  incidental  expenses 
probably  will  run  the  cost  up  to  $7,000,  leaving  a  $5,000  fee  for  the  re- 
ceiver. This  ift  an  average  of  $500  a  day  for  the  ten  days  of  his  service. 
This  matter  of  costs,  however,  is  a  mooted  point.  Spencer's  attorneys  claim 
that  the  bank  is  liable.    This  is  disputed  by  its  legal  advisers.    They  con- 


THE  DREYFUS  CASE  OF  AMERICA  485 

tend  that  the  costs  in  all  cases  are  assessed  against  the  losing  party.    They 
say  the  state  of  Missouri  must  pay. 

The  Post-Dispatch  of  Thursday  evening  publishes  at  the  head  of 
a  three-column  story  a  tabulation  of  statistics  upon  which  Receiver 
Spencer  claims  total  fees  of  $12,150.  This  was  entitled,  "Receiver 
Spencer  Asks  $1.73  for  Each  Crowded  Minute."  The  duration  of 
the  receivership  was  stated  as  eight  days.  The  cost  of  two  lawyers 
per  day  was  put  at  $125.  The  lawyers  were  said  to  have  made  no 
appearance  in  court.  They  appeared  once  at  the  receiver's  office, 
were  visited  by  Judge  Spencer  on  two  occasions,  and  filed  but  one 
document  with  the  court.  The  time  Judge  Spencer  devoted  to  the 
receivership,  namely,  eight  days,  reckoned  at  an  average  time  per 
day  of  six  hours,  was  shown  to  represent  a  cost  for  his  services  of 
$625  per  day,  $10kl6  per  hour,  or  $1.73  per  minute! 

Under  the  caption,  "Swanger  Says  Law  Forbids  Him  Control," 
occurs  this  explanation: 

There  are  two  courses  open  under  the  Missouri  law  to  the  secretary  of 
state  in  closing  up  the  affairs  of  a  bank.  First,  if  the  secretary  of  state 
finds  that  the  bank  is  being  conducted  on  irregular  or  imsafe  lines,  it  is  his 
duty  to  report  this  fact  to  the  attorney-general,  who  shall  petition  the 
proper  court  to  appoint  a  receiver,  or  to  order  such  other  remedy  as  the 
court  may  think  best  suited  to  the  case.  Second,  if  a  bank  is  found  in- 
solvent the  secretary  of  state  shall  immediately  lake  charge.  The  law 
provides  that  he  shall  have  charge  for  not  more  than  sixty  daj'^s.  A  re- 
ceivership follows  in  this  case  also.  While  in  all  bank  statements  the  capi- 
tal stock  is  listed  as  liabilities,  the  courts  have  held  that  the  stockholders 
are  the  bank.  A  bank  is  not  insolvent,  therefore,  unless  it  is  unable  to 
pay  its  depositors  and  other  creditors,  not  includhig  stockholders.  The 
Lewis  bank  is  not  insolvent  in  this  sense.  The  deposits  are  small  com- 
pared with  the  paid-up  capital  stock.  Therefore,  I  cannot  under  the  law 
take  charge.  For  this  reason  I  took  the  action  first  set  forth.  The  mat- 
ter is  now  in  the  hands  of  Judge  McElhinney. 

Under  the  sub-title,  "Judge  Considering  Renaming  Receiver," 
the  following  item  is  printed: 

Judge  McElhinney  said  today  that  he  was  still  undecided  whether  to 
lenew  the  appointment  of  a  receiver  for  the  People's  United  States  Bank. 
He  is  giving  the  matter  deep  consideration  and  expects  to  hand  down  an 
opinion  within  the  next  few  days.  He  said  that  the  fraud  order  compli- 
cated matters  somewhat,  but  would  not  necessarily  justify  a  receivership. 

Under  the  caption,  "Directors  Ready  to  Wind  Up  Bank  Affairs," 
the  following  statement  was  attributed  to  ex-Governor  Stephens: 

The  board  of  directors  probably  will  proceed  to  liquidate  the  affairs  of 
the  bank  if  the  fraud  order  remains  in  force.  The  directors  wish  to  have 
the  matter  passed  upon  by  the  liighest  judicial  authority.  If  it  should  be 
finally  determined  that  the  bank  cannot  continue  in  the  mail  order  busi- 
ness, then,  in  my  judgment,  there  will  be  nothing  left  for  us  to  do  but  to 
return  to  the  depositors  and  stockholders  their  money.  The  present  board 
believes  that  every  depositor  and  stockholder  will  get  dollar  for  dollar  of 
the  amount  put  into  the  bank.     No  receiver  will  be  necessary  to  its  affairs. 

The  Censor  thus  summarizes  the  gossip  of  the  streets  for  the  week : 

The  weather  on  Monday  was  decidedly  torrid,  but  it  is  a  safe  bet  that 

despite  the  weather  Brothers  Spencer,  Swanger  and  Niedringhaus  had  cold 

chills.     For  Judge  McElhinney  that  day  declared  the  receivership  of  the 


486  THE  SIEGE  OF  UNIVERSITY  CITY 

Lewis  bank  vacant.  He  thus  struck  from  their  eager  hands  a  juicy  sine- 
cure of  something  like  $iJOO,000. 

The  thing  was  all  fixed.  Spencer  had  been  to  Washington  and  presum- 
ably returned  loaded  with  conclusive  information  that  a  fraud  order  was 
on  its  way.  He  seized  Swanger,  who  was  in  town  that  Sunday,  and  it  is 
easy  to  believe  that  they  and  others  of  the  Niedringhaus  faction  fixed  up 
the  job.  Swanger  and  Spencer,  with  a  long  petition,  an  unsigned  order 
of  the  court,  and  Spencer's  bond,  were  to  appear  liefore  Judge  McElhinney 
at  Clayton  and  persuade  him  to  sign  the  order  before  he  could  give  the 
matter  any  thought.  That  this  was  done,  is  sliown  by  Judge  McElhinney 
in  rescinding  his  own  action.  Swanger  had  his  man  appointed,  and  his 
petition,  bond  and  order  of  court  in  evidence  half  an  hour  after  Wyman 
received  the  fraud  order. 

Then  Receiver  Sj)encer  discovered  that  his  own  bond  was  not  nearly 
big  enough.  He  vohmtarily  increased  it  to  one  million  dollars,  a  little 
proceeding  which  will  cost  somebody  $5,000.  If  Spencer  had  stayed  in, 
the  stockholders  must  have  footed  the  bills.  The  increased  bond  was  given 
to  enormously  enlarge  the  sum  which  the  stockholders  would  have  had  to 
pay.  Besides  these  fees,  the  gang  was  looking  forward  to  all  kinds  of 
attorney  and  other  fees  and  expenses  for  their  retainers.  It  was  about 
the  juiciest  thing  that  ever  fell  to  the  lot  of  Missouri  politicians,  *  ♦  * 
and  then,  just  as  tliey  were  ready  to  enjoy  it.  Judge  McElhinney  took 
the  whole  proposition  out  of  their  hands.     Ah !     Cruel,  Cruel  Judge ! 

The  Censor  also  propounds  the  query  whether  "Brother  Spencer" 
thinks  the  loss  of  the  Lewis  receivership  a  providential  punishment 
for  having  desecrated  the  Sabbath  by  drawing  up  the  legal  papers 
and  making  the  trip  to  Clayton  for  the  conference  at  which  the 
preliminaries  were  agreed  upon. 

The  Watchman-Advocate,  a  St.  Louis  county  local  paper,  after 
reviewing  the  history  of  the  receivership  and  stating  that  Spencer 
had  been  ousted,  comments  as  follows: 

This  should  have  ended  the  whole  scandalous  affair.  The  wrong  inflicted 
would  thus  have  been  in  a  degree  palliated;  but,  Mr.  Swanger,  instead  of 
allowing  the  matter  to  rest  here,  again  rushes  into  court  with  all  the  legal 
machinery  at  his  command,  pleading  that  something  be  done  to  justify 
his  action. 

FIRST   STEPS   IN    LIQUIDATION. 

Once  the  bank  was  restored  to  its  directors,  Lewis  and  his  asso- 
ciates began  to  take  active  steps  toward  liquidating  its  affairs.  The 
directors  were  of  the  opinion  that  the  bank  could  pay  its  stock- 
holders and  depositors  dollar  for  dollar,  with  the  possible  exception 
of  the  promotion  expenses  represented  by  the  directors'  note  and 
the  cost  of  litigation  touching  the  receivership  and  fraud  order. 
The  loans  of  the  bank,  as  we  have  seen,  were  fully  secured.  It 
was  believed  that  they  could  be  taken  up  without  loss  at  their 
maturity.  Steps  were  taken,  however,  to  raise  funds  to  take  up 
these  loans  forthwith.  The  St.  Louis  Globe-Democrat  of  Saturday, 
July  22,  contained  the  following  news  item: 

The  first  steps  toward  liquidating  the  loan  of  $114,000  made  by  the  bank 
to  the  University  Heiglits  Keally  and  Dcvclojimcnt  Company  will  begin 
today  when  the  two  hundred  and  ten  lots  belonging  to  the  company  will 
be  offered  for  sale.  These  lots  form  a  part  in  the  eighty-five  acre  tract 
of  land  on  which  the  bank  has  a  first  lien.    The  directors  state  that  if  the 


f,y]Z'^V'/f/  "'"S'^y"  of  the  Lewis  Publishing  Company  in  the  prosperous  year  of  1904, 
priot    to    tlie  attacks  of   the   Government  '  <•'■*• 

uyj°"i-  °^   "'iP'oyes   ready    to   welcome    Lewis  on    the   occasion    of   his   acquittal  by 
Judge  Riner,   May   14.   igoH  '  ^  ■ 


^Original  subscription  orders  of  the  Woman's  Magazine  and  the  IVoman's  Farm 
Journal,  counted  hv  the  Citizens'  Committee  and  the  Government  (Fetlis)  Commis- 
sion.    They  were  left  in  this  condition  at  the  close  of  the  latter  count 

-Fettis  Commission   at  work     "Citircns'   Committee  at  worI\- 

'^C^tisens'    Committee  at  work 


THE  DREYFLfS  CASE  OF  AMERICA  489 

lots  bring  a  minimum  price,  the  loan  will  be  paid  off  and  leave  a  balance 
of  more  than  $200,000. 

This  has  nothing  to  do  with  the  loan  to  the  Lewis  Publishing  Company 
amounting,  originally,  to  about  four  hundred  thousand  dollars,  and  secured 
by  a  lien  on  the  Woman's  Magazine  property.  This  indebtedness  is  in  the 
nature  of  a  graduated  loan,  payable  in  monthly  payments.  The  amount 
has  now  been  reduced  to  about  three  hundred  and  eighty  thousand  dollars. 
The  directors  held  a  meeting  last  night.  Arrangements  for  the  sale  of 
lots  today  were  perfected,  but  in  the  absence  of  Director  Meyer  no  for- 
mal business  was  taken  up.  "It  was  a  sort  of  experience  meeting,"  said 
ex-Governor  Stephens.  The  directors  will  meet  again  this  afternoon,  when 
they  may  outline  the  future  policy  of  the  bank. 

Under  the  title,  "Many  Purchases  Made  of  Lewis  Tract  of  Lots," 
the  Sunday  Republic  gives  news  of  the  sale: 

Many  prominent  residents  of  St.  Louis  were  at  the  sale  of  the  tract  of 
land  which  was  disposed  of  by  E.  G.  Lewis  yesterday,  and  purchased  lots. 
Judge  George  H.  Shields  and  Judge  Shepard  Barclay,  each  made  pur- 
chases. They  will  erect  homes  on  the  property.  Theodore  F.  Meyer  and 
James  F.  Coyle,  former  Governor  Stephens  and  several  other  business 
men  secured  lots.  The  majority  of  the  sales  were  merely  investments.  The 
sale  was  at  University  Heights,  where  Mr.  Lewis  has  31,000  front  feet  of 
real  estate  which  has  recently  been  sub-divided.  While  not  all  of  the  land 
was  disposed  of,  the  sale  was  an  unusual  success.  , 

Notwithstanding  the  steps  thus  taken  by  the  directors  to  liquidate 
the  loans  of  the  bank,  the  State  officials  and  the  receiver  continued 
their  active  opposition.  The  receiver  still  persisted  in  his  intention 
to  collect  his  fees.  The  proceedings  which  followed  gave  Lewis 
and  his  associates  the  tirst  opportunity  they  had  enjoyed  to  testify 
as  to  the  security  for  the  loans  of  the  bank,  and  the  circumstances 
under  which  they  had  been  made.  Many  of  these  details  now  be- 
came known  for  the  first  time  to  the  local  public,  with  the  effect  that 
additional  sympathy  for  the  distressed  institution  was  aroused. 

EXIT    JUDGE    8PENCER. 

On  Monday,  July  30,  ex-Receiver  Spencer  filed  a  supplemental 
report  in  the  nature  of  a  rejoinder  to  the  bank  in  the  matter  of  his 
claim  for  fees  and  expenses.  This  action  led  to  considerable  news- 
paper comment.  The  Globe-Democrat,  after  stating  the  legal 
points  involved,  announced  that  a  decision  as  to  whether  the  bank 
should  pay  these  expenses  was  expected  on  Saturday.  The  article 
continues: 

Regarding  his  claim  against  the  bank,  Judge  Spencer  said,  "The  entire 
expense  of  the  receivership  was  less  than  half  of  one  per  cent  of  the 
amount  passing  through  my  hands.  I  might  have  asked  in  fairness  for 
much  more  than  I  did.  I  should  be  glad  to  donate  my  services  if  it  would 
materially  help  the  poor  depositors  and  stockholders,  for  in  all  the  history 
in  the  world  no  more  pathetic  accumulation  of  money  has  ever  been  brought 
to  public  notice.  Much  of  it  represents  the  small  savings  of  the  very  poor. 
It  is  the  all  of  many  a  widow,  orphan  and  invalid.  It  means  suffering  to 
hundreds  if  such  sums  are  wasted. 

The  Chronicle  thus  comments  editorially  on  the  above  interview: 
No  truer  or  more  pathetic  words  were  ever  spoken  than  those  used  by 
Judge  Selden  P.  Spencer,  removed  receiver  of  the  Lewis  Bank,  in  describ- 
ing the  present  crisis  of  that  concern.    They  reflect  equal  credit  on  his  acu- 


'490  THE  SIEGE  OF  UNIVERSITY  CITY 

men  as  a  lawyer,  his  discernment  as  a  financial  expert,  and  his  broad  and 
kindly  sympathy  as  a  man.  To  waste  such  a  fund  would  be  a  crime  of 
crimes.  To  take  away  from  such  unfortunates  the  little  sums  hoarded  to 
alleviate  the  hardships  of  sickness,  misery  and  old  age  would  be  more 
cruel  than  to  take  away  their  lives.  Isn't  it  singular,  therefore,  that  so 
humane  a  man  should  use  should  language  in  a  legal  argument,  the  purpose 
of  which  is  to  collect  for  himself  S12,000  out  of  these  "pathetic  accumu- 
lations," as  the  price  of  a  receivership,  as  to  which  Judge  McElhinney  has 
decided  that  it  had  no  warrant  of  law.  *  *  *  If  a  mistake  was  made 
in  the  hurry  and  rush  of  that  trip  out  to  Clayton  and  into  the  court  to 
get  the  receivership  aforesaid,  why  should  the  "very  poor"  be  made  to  pay 
the  piper? 

The  amended  petition  of  Attorney-General  Hadley  asking  the 
court  to  take  charge  of  the  bank  came  up  for  argument  before 
Judge  ^IcElhinney  on  Friday,  August  11.  Practicalh^  the  entire 
day  was  taken  up.  Attorney-General  Hadley  was  said  to  have  de- 
livered a  severe  two-hour  arraignment  of  Lewis  and  the  bank. 
General  Shields,  in  behalf  of  the  bank,  replied  in  a  strain  of  sar- 
casm touching  the  recent  appointment  of  Receiver  Spencer.  He 
declared  that  the  evidence  on  which  the  bank  had  been  thrown  into 
a  receivership  was  hear-say.  Tlie  institution,  he  said,  was  solvent. 
The  question  of  Judge  Spencer's  fees  was  postponed.  The  hearing 
was  resumed  on  Saturday,  August  12.  The  Globe-Democrat  of 
Sunday  morning  thus  reports  the  proceedings : 

Three  affidavits  made  for  the  purpose  of  showing  why  the  court  should 
not  take  charge  of  the  bank  were  filed  by  Judge  Barclay.  One  was  made 
by  E.  G.  Lewis,  president,  another  by  Theodore  F.  Meyer,  secretary,  ths 
third  by  N.  Lee  Travers,  an  attorney.  Mr.  Lewis  avers  that  since  a  time 
prior  to  the  filing  of  the  amended  petition  by  the  attorney-general,  the 
bank  has  not  had  any  of  its  funds  invested  in  stocks  of  other  companies 
to  which  the  State  bank -examiners  objected.  Touching  the  loan  to  the 
University  Heights  Company,  which  it  was  alleged  was  insufficiently  se- 
cured, Mr.  Lewis  places  the  value  of  the  property  at  $900,000.  The  value 
of  the  Woman's  Magazine  property,  also  held  as  collateral,  he  placed  at 
over  a  million  dollars.  The  $55,000  indebtedness  mentioned  in  Swanger's 
letter  to  Hadley  as  a  personal  loan  to  Lewis,  it  was  said,  had  been  wiped 
out.  The  items  of  one  hundred  forty-six  thousand  dollars  alleged  organi- 
zation expenses,  it  was  stated,  had  been  referred  by  the  secretary  of  state 
to  the  board  of  directors  to  audit  and  adjust,  after  ascertaining  the  proper 
amount  to  be  charged  off  in  that  manner. 

At  the  conclusion  of  the  hearing,  the  attorney-general's  motion  to 
vacate  the  order  of  court  ousting  tlie  receiver  was  overruled.  The 
only  phase  of  the  first  receivership  still  open — n.-^mely,  the  question 
of  the  receiver's  compensation  for  his  services  and  expenses — came 
up  for  adjudication  on  Tuesday,  September  5.  The  Post-Dispatch 
then  printed  this  news  item  under  the  headlines,  "Spencer  Gets 
Only  $2,500  for  His  $10,000  Claim": 

Judge  McElhinney  handed  down  his  opinion  Tuesday  on  the  motion, 
reoently  filed  l\v  tlie  People's  United  States  Bank,  to  compel  former  Re- 
ceiver Spencer  to  return  certain  funds  to  the  bank  amounting  to  $12,100. 
These  he  had  reserved  to  cover  his  alleged  "just  and  reasonable  expenses" 
while  acting  as  receiver.  Judge  McElhinney  cuts  Spencer's  claim  for  $10,000 
to  $2,500.  He  says  the  receiver's  claim  for  $10,000  was  evidently  made  on 
the  basis  of  professional  service,  whereas  the  chief  value  of  a  receiver  lies 


THE  DREYFUS  CASE  OF  AMERICA  491 

in  the  ability  and  integrity  required.  He  reduces  tlie  $1,000  charge  for 
attorneys'  fees  to  $500,  because  two  attorneys  were  employed  while  only 
one  was  necessary.  He  then  ruled  that  the  expenses  of  the  receivership 
cannot  be  withheld  out  of  the  bank's  funds,  but  must  be  taxed  as  costs  in 
the  case,  to  be  paid  in  case  of  appeal,  by  the  losing  litigant. 

The  court's  opinion  was  delivered  orally  and,  at  the  request  of 
Judge  Spencer  and  the  bank  attornej^s.  Judge  McElhinney  with- 
held the  delivery  of  his  opinion  until  the  beginning  of  the  Sep- 
tember term.  The  Republic,  commenting  editorially  on  the  reduc- 
tion of  Judge  Spencer's  claim,  concludes: 

The  older  the  first  transaction  grows  the  worse  it  looks.  It  bids  fair 
to  stand  as  a  lasting  discredit  to  the  political  motives  which  inspired  the 
secretary's  hasty  plan  and  half-baked  action. 

Without  tracing  in  further  detail  the  history  of  this  receivership, 
it  may  be  here  recorded  that  the  Supreme  Court  of  Missouri,  during 
the  April  term  of  1906,  sitting  in  banc,  sustained  the  decision  of 
Judge  McElhinney.  The  opinion  of  the  court  was  rendered  by 
Judge  Leroy  D.  Valliant.  After  reciting  the  circumstances  of  the 
receivership,  the  fraud  order  and  the  revocation  of  the  receivership, 
it  proceeds: 

On  October  21,  1905,  the  motion  of  the  receiver  for  his  costs  and  com- 
pensation came  on  for  hearing.  The  court  then  made  an  order  allowing 
him  two  thousand,  five  hundred  dollars  compensation  for  seven  days'  serv- 
ices, five  hundred  dollars  for  his  attorney's'  fees,  and  one  hundred  fifty 
dollars  legal  advice  from  another  attorney.  It  was  further  ordered  that  a 
total  amount  of  three  thousand,  one  hundred  and  fifty  doUars  be  taxed  as 
costs  incurred  by  the  plaintiff  in  this  action.  From  that  order  the  receiver 
has  prosecuted  this  appeal.  There  are  two  points  urged  by  the  appellant, 
first,  that  the  sum  allowed  is  inadequate;  second,  that  he  should  have  been 
allowed  to  retain  the  sum  out  of  funds  that  had  come  into  his  hands  as 
receiver,  without  the  hazard  of  having  it  taxed  as  costs  to  abide  the  result 
of  suit. 

After  reviewing  the  claims  of  the  appellant  and  dismissing  the 
fraud  order  as  a  proceeding  with  which  the  State  courts  had  nothing 
to  do,  the  court  concludes: 

We  must,  therefore,  proceed  to  the  consideration  of  the  question  befor*^ 
us  with  the  conclusion  that  the  learned  trial  judge,  after  due  deliberation 
and  second  thought,  was  aright  when  he  said  that  his  act  in  appointing  the 
receiver  was  "without  authority  and  jurisdiction."  It  was  absolutely  wrong 
and  a  violation  of  the  defendant's  rights.  *  *  *  We  have  not  been 
pointed  to  any  authority  which  holds  that  where  there  was  absolutely  no 
justification  in  the  act  of  appointing  a  receiver,  and  the  act  was  in  its 
nature  to  the  injury  of  the  defendant,  that  he  should  nevertheless  pay  for 
the  injury  which  was  done  him.  And  if  there  are  any  such  authorities  we 
do  not  care  to  see  them.  *  *  *  The  fact  that  the  State  of  Missouri  is 
the  plaintiff,  and  that  no  judgment  for  costs  can  be  rendered  against  the 
State,  cannot  alter  the  result.  If  the  defendant  is  not  otherwise  liable, 
it  cannot  be  rendered  liable  by  the  fact  that  there  is  no  one  else  against 
whom  the  judgment  can  go.  The  learned  trial  judge  decided  this  point 
correctly.     The  judgment  is  affirmed. 

Even  after  the  foregoing  opinion  had  been  delivered,  a  motion 
for  rehearing  of  the  case  was  filed.  Judge  Spencer  took  the  ground 
that  a  portion  of  his  expense  consisted  of  attorneys'  fees.     These, 


4d2  THE  SIEGE  OF  UNIVERSITY  CITY 

he  alleged,  had  been  paid  by  liim  in  cash,  and  for  these  he  felt 
that  he  should,  therefore,  have  been  reimbursed.  He  insisted  that 
he  was  appointed  as  receiver  "merely  to  preserve"  the  assets  of  a 
bank  which,  in  the  nature  of  the  case,  the  bank  could  not  for  a  time 
preserve  for  itself,  and  that  the  court  had  failed  to  recognize  the 
difference  between  his  compensation  as  receiver  and  the  amounts 
actually  paid  Out  of  his  own  pocket  in  the  preservation  of  the  estate. 
The  case  may  be  drawn  to  a  close  by  an  amusing  comment  in  the 
brief  filed  by  counsel  for  the  bank,  from  which  we  quote: 

The  persistency  which  the  learned  receiver  exhibits  in  this  melting  sum- 
mer weather  is  perhaps  only  a  manifestation  of  that  sort  of  Christian 
charity  which  is  said  to  "begin  at  home."  *  *  *  With  all  respect  due 
to  the  honored  jurist,  the  supposed  contention  "decisive  of  the  case,"  to 
quote  from  his  motion  for  rehearing,  appears  singularly  like  one  of  a  dis- 
tinguished Irish  counsel  who  once  argued  a  motion  for  a  new  trial  before 
a  patient  judge.  His  Honor,  having  consecutively  overruled  the  first  two 
points  of  the  learned  counsel,  was  paralyzed  by  his  next  remark,  "In  that 
event  I  have  another  point  to  submit  which  is  equally  as  conclusive." 
*  *  *  The  main  contention  and  ruling  of  the  court  is  soimd,  safe  and 
sane  from  every  standpoint,  legal  and  moral.  Where  the  order  appointing 
a  receiver  is  void,  (as  in  this  case,  for  want  of  jurisdiction,  for  want  of 
notice  and  for  want  of  facts  alleged  to  warrant  summary  action  of  that 
sort),  the  receiver  has  no  standing  to  claim  compensation  for  his  services. 
Still  less  can  he  claim  to  charge  the  estate,  over  which  he  has  no  lawful 
power,   by  incurring  expenses  for   attorneys. 

The  appointment  is  void.  And  it  would  be  a  curious  kind  of  jurispru- 
dence which  would  allow  a  void  seizure  of  a  solvent  and  sound  bank  to 
furnish  ground  to  force  the  victims  of  such  an  attack  to  pay  any  part  of 
the  expenses  of  the  performance.  *  *  *  The  parties  who  took  a  hand 
in  that  void  and  imwarranted  attack  on  the  bank,  have  left  at  best  a  sorry 
record.  At  that  very  moment  it  should  have  been  accorded  the  protection 
which  the  Missouri  laws,  under  which  it  was  incorporated,  afford.  These 
very  parties  should  have  given  the  bank  their  sup])ort  against  the  cruel 
and  un-American  assault  made  upon  it  by  the  Federal  authorities.  But, 
perhaps  the  most  remarkable  part  of  that  record  is  the  insistence  of  the 
learned  receiver  that  the  expenses  of  his  part  in  those  void  proceedings 
should  be  paid  out  of  the  bank's  own  funds.  The  idea  is  unique.  But  a 
court  would  be  strangely  constituted,  indeed,  which  would  tolerate  it  for 
a  moment. 

The  Supreme  Court  in  banc  entered  an  order  on  July  30,  1906, 
overruling  the  appellant's  motion. 

Judge  Spencer,  in  a  letter  to  the  chairman  of  the  Ashbrook  Com- 
mittee, complains  that  "Lewis  so  manipulated  aff'airs  that  he  never 
received  any  compensation  for  his  services."  More  recently,  a  final 
decision  has  assessed  the  costs  of  the  case  against  the  State  of 
Missouri.  The  way  is  now  open  for  the  presentation  of  a  bill  to 
the  Missouri  House  of  Representatives  for  an  appropriation  from 
the  treasury  for  this  purpose,  which  action,  if  taken,  will  bring  the 
costly  and  ill-advised  campaign  of  the  State  authorities  against  the 
People's  United  States  Bank  to  an  inglorious  end. 

Let  us  now  inquire,  how  went  the  campaign  against  the  Federal 
authorities  which  was  being  waged  at  the  same  time  by  the  officers 
and  counsel  for  the  bank. 


{^    I  ■  n^^     \3.e^aj. 


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Tabulated  summaries  (greatly  reduced)  of  the  count  of  the  ^"bjcription  lists  of  the 
Wonian's  Magazine,  signed  and  certified  by  the  supervisors  and  accountant  of  tne 
Citizens'  Committee,  February  jgod 

The  total  482,595  paid  in  advance  subscriptions  shown  for  >''<^  y'°'-yf'f-,J'l^  *"'''[ 
597,465  for  J905  These  figures  were  afterwards  substantwlly  confirmed  by  the  Govern- 
ment (Fettis)   Commission 


y/  — ^<ghr  laiimaii]9  Jlagagint.  g^^ — 


„/.  [my,,Hf^.//itt,-A^zi^^i.'»^ 


fclut     }n.   fHytrii^. 


I^^MMS^'fii^^MiiESk^rt^^M^ii^^ 


i///j/u, 


(^//<j  tt/'W'/,)  ///rr/////,)j  c/ii^^M/u/t  /wj/  mm/waff/^  / 

_____=-t^^;&."*iiimia.~fflcu.^^:f— r 


^Jh-JrWlfiUii^. 


Certificates  of  the  Association  of  American  Advertisers,  showing  the  circulation 
of  the  Woman's  Magazine  and  the  Woman's  Farm  Journal  for  the  year  1903  as 
',545,905  and  619,084,  respectively,  according  to  the  standards  of  that  body.  Shortly 
thereafter  the  mailings  were  arbitrarily  limited  by  the  Postmaster  of  St.  Louis 
to  about  one-third  of  these  figures. 


THE  DREYFUS  CASE  OF  AMERICA  496 

The  proceedings  in  the  Federal  court,  as  shown  by  the  official 
transcript  of  the  record  of  the  People's  United  States  Bank,  appel- 
lant, vs.  Gilson  et  al.,  were  initiated  by  the  filing  of  a  petition  in 
equity  praying  for  an  injunction  against  the  fraud  order.  To  this 
were  attached  as  exhibits  a  statement  of  the  condition  of  the  bank 
as  of  July  8,  and  copies  of  the  citation  to  appear  at  Washington, 
the  Lawrence  memorandum  and  the  motion  made  at  the  hearing 
before  Goodwin  to  dismiss  the  charges.  The  first  fanfare  of  trum- 
pets before  the  contest  opened,  appeared  in  the  Globe-Democrat  of 
Tuesday,  July  11,  in  the  form  of  an  interview  with  Judge  Shepard 
Barclay  of  counsel  for  the  bank.  Under  the  heading,  "People's 
Bank  to  Open  Fight  in  Court  Today,"  is  this  annoimcement : 

Application  for  an  injunction  to  prevent  the  enforcement  of  the  fraud 
order  will  be  filed  this  morning  in  the  United  States  Circuit  Court.  Judge 
Shepard  Barclay,  attorney  for  Lewis,  had  the  petition  drawn  up  last  night. 
It  contains  an  extended  recital  of  the  bank's  organization,  affairs,  and 
methods.  It  shows  that  the  bank  is  dependent  on  the  use  of  the  mails 
for  the  transaction  of  business.  The  fraud  order  is  attacked  on  the  ground 
that  it  deprives  the  petitioner  of  rights  and  property  without  due  process 
of  law.  The  entire  system  of  fraud  order  procedure  in  the  Postoffice  De- 
partment is  arraigned  as  illegal,  unfair,  un-American,  and  in  conflict  with 
the  Federal  Constitution. 

In  support  of  this  contention,  the  court  is  asked  to  take  cognizance  of 
certain  assertions  of  fact.  These  are  in  substance:  that  the  postmaster- 
general  refused  to  hear  the  case  in  person;  that  the  assistant  attorney- 
general  for  the  Postoffice  Department  refused  to  submit  the  report  of  the 
postoffice  inspectors  to  the  petitioner  in  order  to  permit  a  proper  defense; 
that  he  accepted  the  charges  in  the  report  as  prima  facie  evidence  of  fraud 
contrary  to  a  spirit  of  fairness  and  justice;  and  that  the  petitioner  was  not 
allowed  to  examine  the  Government's  witnesses  under  oath.  It  is  held  that, 
by  this  procedure,  Lewis  is  not  only  foimd  guilty  of  fraud,  or  attempted 
fraud,  against  the  postal  laws,  but  is  likewise  adjudged  guilty  or  the  equiva- 
lent thereto,  of  criminal  conduct,  all  without  such  a  trial  as  is  contem- 
plated by  law.  The  petition  makes  a  general  denial  of  all  charges  of  fraud 
or  deceyjtion  in  organizing  and  operating  the  bank.  It  represents  the 
bank  as  solvent  and  as  able  to  continue  so,  but  for  the  intervention  of  the 
postoffice  authorities. 

CAMPAIGN    IN    THE    FEDERAL     COURTS. 

The  result  of  this  first  skirmish  is  thus  chronicled  in  a  Post- 
Dispatch  news  item  on  July  12,  under  the  sub-head  "Temporary 
Order  Stops  Stamping  of  Mail  'Fraudulent'": 

A  temporary  restraining  order  was  issued  at  11:30  a.  m.,  by  Judge  Smith 
McPhcrson  of  Iowa  in  the  United  States  District  Court.  This  runs  against 
Henry  J.  Gilson,  in  charge  of  the  Winner  Branch  postoffice;  Frank  Wy- 
man,  postmaster,  and  Henry  P.  Wyman,  assistant  postmaster.  It  re- 
quires them  to  discontinue  stamping  the  mail  of  the  People's  L'^nited  States 
Bank  and  E.  G.  Lewis'  "fraudulent,"  and  forbids  them  to  return  it  to 
the  senders.  The  defendants'  are  cited  to  appear  next  Tuesday,  July  18, 
jind  show  cause  why  an  injunction  should  not  issue  against  them.  Mean- 
time, mail  will  not  be  delivered  to  the  bank  or  Le\ds.  It  will  be  held  at 
the  St.  Louis  postoffice  without  being  stamped  "fraudulent,"  pending  final 
action. 

This  order  was  obeyed  and  for  some  time  thereafter  the  incoming 
mail  of  the  bank  could   neither  be  delivered  to  its  officers  nor  re- 


496  THE  SIEGE  OF  UNIVERSITY  CITY 

turned  to  the  sender.  It  was  impounded  at  the  St.  Louis  postoffice. 
The  Post-Dispatch  on  Monday,  July  17,  in  course  of  an  article 
on  the  ousting  of  the  receiver,  prints  this  item  under  the  sub-head 
"Thousands  of  Letters  Await  Lewis  Fraud  Order   Decision": 

Judge  McPherson  is  expected  to  decide  Tuesday  on  the  application  for  an 
injunction  against  the  enforcement  of  the  fraud  order.  The  local  post- 
oflice  oflBcials  hope  there  will  be  no  delay,  because  the  interrupted  mail  is 
assuming  huge  proportions.  There  are  letters  twenty-three  feet  deep  in 
the  cashier's  vault,  where  they  are  being  kept  for  safety.  Hundreds  of 
these  letters  are  addressed  to  E.  G.  Lewis,  President  of  the  Woman's 
Magazine,  and  marked  "Personal."  There  is  notliing  to  show  they  are 
intended  for  the  bank.  They  are  held  under  the  general  terms  of  tli« 
fraud  order.  Hundreds  of  these  letters  are  addressed  by  women.  They 
come  from  cities  and  remote  postofRces  all  over  the  Nation.  These  are 
specially  scrutinized,  for  the  wife  of  the  promoter  is  visiting  out  of  the  city 
and  the  postoffice  officials  are  eager  to  deliver  any  she  may  write.  They 
say,  however,  it  is  practically  impossible  for  them  to  distinguish  between  a 
letter  from  Mrs.  Lewis  and  one  from  a  customer  of  the  bank.  If  Judge 
McPherson  grants  the  injunction,  these  letters  will  be  delivered  at  once 
to  Lewis.  If  not,  the  letters  and  postoffice  money  orders  will  be  at  once 
returned  to  the  writers. 

The  Globe-Democrat  of  Tuesday,  July  18,  summarized  thus  the 
argument  of  counsel  in  the  first  legal  battle  of  the  bank  with  the 
Federal  forces: 

In  argument  before  Judge  Smith  McPherson  today,  attorneys  for  E.  G. 
Lewis  declared  that  he  was  not  opposing  the  fraud  order  against  himself. 
The  presentation  was  said  to  be  by  the  People's  United  States  Bank,  only. 
Attorneys  for  the  bank  argued  that  the  representations  complained  of  were 
made  by  Lewis  before  the  organization  of  the  bank.  A  ])romoter'.s  con- 
tract, they  said,  cannot  be  fastened  on  a  corporation,  unless  the  latter 
adopts  it  or  accepts  its  benefits.  Counsel  for  the  Government  argued  that 
Congress  had  constituted  the  postmaster-general  in  such  cases,  a  court  of 
last  resort.  His  act,  they  claimed,  cannot  be  attacked,  unless  he  is  charged 
with  fraud  or  malice.  The  use  of  the  mail  was  alleged  to  be  a  mere  privi- 
lege conferred  by  Congress.  The  withholding  of  that  privilege  for  reasons 
authorized  by  Congress  was  said  to  be  not  a  violation  of  the  Constitution. 

m'pherson's  opinion. 

The  general  interest  was  again  fanned  into  a  blaze,  and  more 
fuel  was  added  to  the  flames  by  the  amazing  outcome  of  this  hear- 
ing. The  consequences  of  this  episode  are  strangely  interwoven  in 
the  pattern  of  Lewis'  after-life.  It  is  worthy  of  more  than  passing 
notice.  On  Wednesday,  July  19,  the  court  handed  down  an  order 
denying  the  relief  prayed  for.  Not  content,  however,  with  a  for- 
mal order,  and  an  opinion,  based  upon  the  law  and  the  judicial 
precedents  thought  by  him  to  be  controlling,  His  Honor  delivered 
an  opinion  scoring  in  unmeasured  terms  the  entire  enterprise.  The 
Post-Dispatch  signalized  the  news  of  tliis  decisive  victory  for  the 
Federal  forces  in  a  three-column  article  under  five-column  scare 
heads.  This  was  accompanied  by  the  pen  picture  of  Federal  Judge 
McPherson  wliich  is  elsewhere  reproduced.     The  article  opens : 

Judge  Smith  McPherson  refused,  Wednesday,  the  injunction  asked  by 
the  Lewis  bank  against  Postmaster  Wyman,  to  restrain  him  from  carrying 
out  the  fraud  order.     He  set  aside  the  temporarr  restraining  order,  issued 


THE  DREYFUS  CASE  OF  AMERICA  497 

a  week  ago,  on  which  the  postmaster  has  been  compelled  to  hold  the  Lewis 
mail.  Immediately  after  the  decision,  Assistant  Postmaster  Henry  P.  Wy- 
man  gave  instructions  to  clerks  to  begin  stamping  "Fraudulent"  and  re- 
turning to  senders,  the  thousands  of  letters  that  have  been  accumulating 
since  the  restraining  order  was  issued  a  week  ago.  It  is  expected  that  all 
this  mail  will  be  sent  out  by  Wednesday  night.  Judge  Barclay,  who  rep- 
resented the  Lewis  bank,  immediately  asked  the  court  to  grant  time  to  file 
a  supplemental  bill.  He  also  asked  that  the  temporary  restraining  order 
be  continued  in  force  until  after  further  hearing.    This  the  court  refused. 

Under  the  caption — "Court's  Comments  Are  Cause  of  Amuse- 
ment," the  following  bit  of  buffoonery  is  attributed  to  the  presid- 
ing judge: 

During  the  progress  of  the  hearing  considerable  amusement  was  created 
by  Judge  McPherson's  comments,  interjected  between  arguments  of  coun- 
sel. At  one  point  of  former  Judge  Barclay's  speech,  in  which  counsel  took 
occasion  to  describe  the  tons  of  mail  being  held  in  the  vaults  of  the  post- 
office,  addressed  to  the  bank,  the  court  interrupted.  "Judge,"  asked  Judge 
McPherson  of  Barclay,  "Have  you  ever  read  Irving's  'Great  Mississippi 
Bubble?'"  "I  have,  your  Honor,"  replied  Judge  Barclay,  surprised.  "Well," 
said  Judge  McPherson,  with  a  smile,  "you  doubtless  remember  then  how 
the  eager  investors  during  the  first  six  months  of  the  bubble  became  greatly 
enraged  because,  owing  to  the  rush  to  invest  in  that  speculation,  they  could 
not  get  in  quick  enough,  and  how  for  the  next  six  months  they  were  more 
enraged  because  they  could  not  get  out  fast  enough."  A  ripple  of  laughter 
went  through  the  courtroom.  "I  have  been  through  a  like  experience  my- 
self," said  Judge  McPherson,  "and,  judging  from  the  knowing  smiles  I 
now  see  on  the  faces  of  those  in  this  courtroom,  I  am  inclined  to  believe 
there  may  be  others  here  who  can  say  the  same.  I  cite  this  example  merely 
to  show  you  that  people  may  be  wrong  in  their  judgment.  The  fraud  order 
may  not  prove  such  a  great  hardship  after  all." 

The  opinion  of  Judge  McPherson  was  then  given  in  full  by  the 
Post-Dispatch  and  thus  launched  on  its  devastating  course  through 
the  columns  of  the  press.  Shortly  afterward,  it  was  reprinted  by 
the  Government  Printing  House  as  a  public  document  and  distributed 
from  the  office  of  Assistant  Attorney-General  Goodwin  to  all  in- 
quirers about  the  bank.  Recognizing  that  he  could  not  recall  it  or 
counteract  its  influence,  Lewis,  after  the  fashion  of  the  pioneers, 
who  learned  to  head  off  prairie  fires  by  burning  a  strip  of  the  dry 
grass  in  advance  of  the  conflagration,  resolved  to  meet  fire  with  fire. 
He  came  out  in  the  October  issue  of  the  Woman's  Magazine  in  an 
editorial  *  entitled,  "Something  Interesting,"  in  which  he  urged  his 
patrons  to  send  for  copies  of  this  document  end  read  it.  Later,  its 
drastic  and  sweeping  phrases  became  familiar  to  his  readers  from 
being  quoted  in  his  agitation  against  the  fraud  order.  McPherson's 
opinion  has  thus  become  one  of  the  basic  documents  of  the  Lewis 
case. 

The  following  is  a  brief  but  sufficient  digest.  The  court  first  re- 
cites the  allegations  of  the  bill  in  equity  filed  by  counsel  for  the  bank. 


•See  Order  Numbkr  Ten,  by  E.  G.  Lewis,  a  volume  of  Lewis'  editorials  during  his 
controversy  with  the  Government;  reprinted  from  the  Woman's  Magazine;  published 
by  University  City  Publishing  Company,  University  City,  St.  Louis,  Mo.,  1911; 
224  pp.,  6mo;  price,  fifty  cents,  postpaid. 


498  THE  SIEGE  OF  UNIVERSITY  CITY 

Tliis  amounts  in  brief  to  a  summary  of  the  history  of  the  bank.     The 
court  next  proceeds : 

The  defendants  have  made  a  return  to  the  order  to  show  cause  why  an 
injunction  should  not  issue.  This  return  presents  many  questions  of  fact 
calling  for  evidence  requiring  the  appointment  of  a  Master.  But  the  court, 
believing  the  matter  was  urgent,  requested  counsel  to  present  the  case  as 
though  pending  on  the  verified  bill  in  equity  only.  The  case  has  been  ar- 
gued with  an  ability  and  eloquence  very  gratifying  to  the  court.  It  has 
been  seen  what  the  bill  charges.  As  affirmative  relief  is  asked,  it  is  perti- 
nent to  consider  what  the  bill  does  not  recite. 

Next  follows  a  series  of  questions  as  to  the  organization  of  the 
bank  and  the  conduct  of  its  affairs  which,  in  the  opinion  of  the 
court,  ought  to  have  been  answered  by  the  pleadings.  The  court 
then  proceeds: 

At  all  events,  on  the  allegations  of  the  bill,  knowing  only  the  information 
thus  imparted,  it  is  strange  that  any  intelligent  person  should  be  found 
who  would  invest  a  dollar  in  this  bank.  I  do  not  know  what  the  facts  are, 
and  from  what  is  before  the  court,  the  facts  cannot  be  stated.  If  the  true 
situation  is  that  of  an  honest,  well-managed  and  profitable  bank,  as  is 
claimed,  the  facts  can  easily  be  disclosed.  If,  on  the  other  hand,  the  bank 
was  organized  by  insolvents,  or  if  it  is  controlled  by  men  who  are  not  finan- 
cially responsible,  or  if  the  bank  has  its  being  to  furnish  large  salaries,  or 
to  advance  money  under  the  guise  of  loans  to  favorites  who  could  not  other- 
wise nor  elsewhere  borrow,  and  sometimes  on  doubtful  security,  then  all 
fair-minded  men  will  approve  of  the  action  of  the  assistant  attorney-gen- 
eral and  the  postmaster-general  in  denying  the  use  of  the  mails  to  the  con- 
cern. And  it  is  no  wonder  that  those  officers  held  the  showing  insufficient, 
if  it  was  as  meager  as  is  now  and  here  made  by  the  bill. 

After  ruling  that  it  was  not  necessary  for  the  Postoffice  Depart- 
ment "To  disclose  the  name  of  those  complaining  of  the  bank,  or 
the  evidence  relied  upon,"  the  court  proceeds: 

Everyone  knows  that  the  postmaster-general,  in  person,  cannot  attend 
to  the  innumerable  duties  of  the  Department.  It  is  enough  to  know  that 
he  acted,  provided  the  acts  are  legal,  and  the  legality  in  no  manner  de- 
pends upon  the  fact  that  he  was  assisted  by  others  in  the  Department.  It 
appears  from  the  bill  that  the  bank  was  given  a  hearing  before  the  post- 
master-general, acting  by  the  assistant  attorney-general.  The  bank  had 
a  prima  facie  case  to  overcome.  It  offered  evidence.  There  was  a  contro- 
verted question  of  fact.  On  that  question  the  constituted  authority  found 
adversely  to  the  bank. 

No  man  has  the  right  to  have  his  mail  delivered  to  him  at  his  door  free 
of  charge.  It  is  a  privilege  only.  And  the  fact  that  it  is  a  privilege  so 
general  as  to  be  quite  near  universal,  does  not  make  it  less  a  privilege.  Ob- 
scene letters  and  literature  have  no  right  to  the  mails,  because  it  is  the 
policy  of  the  Government  not  to  become  a  distributive  agency  for  such 
filth.  And  the  same  is  true,  and  for  the  same  reasons,  as  to  literature  and 
mails  building  up  or  connected  with  a  fraudulent  scheme.  Calling  the  con- 
cern a  bank  does  not  make  it  a  bank.  The  fact  that  parts  of  its  business 
are  legitimate  gives  it  no  right  to  do  any  illegitimate  lousiness.  And  the 
Government  is  not  called  on  to  separate  the  illegitimate  from  the  legiti- 
mate business,  but  will  suppress  the  whole  from  the  mails.  Such  business 
cannot  be  separated.  If  it  is  an  illegitimate  business,  the  fact  that  men 
of  good  repute  and  of  high  standing  are  connected  with  it  does  not  lessen 
the  evil,  but  greatly  aggravates  it,  because  of  the  influence. 


THE  DREYFUS  CASE  OF  AMERICA  499 

After  reviewing  briefly  the  opinion  of  Judge  Amidon  in  "Rosen- 
berger  vs.  Harris/'  chiefly  relied  upon  by  counsel  for  the  bank, 
the  court  makes  the  following  comment: 

Applying  those  laws  and  the  reasons  therefor  to  the  case  at  bar,  what  do 
we  have?  Some  one,  not  disclosed,  made  complaint  of  the  bank  in  ques- 
tion. Postoffice  inspectors  were  assigned  to  investigate  it.  They  are  Gov- 
ernment officers  acting  under  oath.  The  responsibilities  of  their  office  are 
great,  and  but  seldom  is  one  found  who  is  derelict.  But  for  them  this  great 
postal  system,  that  works  with  the  regularity  of  a  clock,  would  be  clogged 
and  honeycombed  with  all  kinds  of  abuses.  Their  acts  are  of  the  greatest 
importance  and  their  reports  carry  great  weight. 

And  it  is  unreasonable  to  ask  that  the  postmaster-general  shall  resort 
to  the  methods  of  taking  evidence  according  to  the  rules  prevailing  in  the 
courts.  The  reports  are,  of  necessity,  evidence  on  which  he  will  act.  They 
made  their  reports,  and  their  reports,  in  the  language  of  the  statute,  was 
"evidence  satisfactory  to  him,"  the  postmaster-general,  that  the  bank  was 
engaged  in  a  scheme  to  defraud.  Tben  and  thereupon  the  postmaster- 
general  could  have  issued  the  "fraud  order,"  but  with  that  spirit  of  fairness 
which  we  would  expect,  he  notified  the  bank  to  rebut  that  evidence.  Tlie 
bank  had  no  right  to  make  that  showing.  It  was  not  obligatory  upon  the 
part  of  the  Government.  It  was  a  privilege  accorded.  And,  in  the  judg- 
ment of  that  officer,  no  sufficient  showing  was  made. 

The  court  thereupon  recited  further  legal  precedents  and  arrived 
at  the  following  astonishing  conclusion: 

The  proposition  conceded  by  all,  that  if  the  postmaster-general  com- 
mitted an  error  of  law,  this  court  should  enjoin  the  enforcement  of  the 
fraud  order,  is  made  the  basis  of  an  attack  thereon  by  complainant's  coun- 
sel. It  is  urged  that  if  the  evidence  on  which  the  fraud  order  was  issued 
was  meager  or  lacking,  then  the  postmaster-general  committed  an  error  of 
law.  There  is  no  authority  to  sustain  the  contention  in  any  of  the  re- 
ported cases.  To  sustain  such  a  contention  would  be  equivalent  to  a  writ 
of  error  from  this  court  to  review  the  decisions  of  that  officer,  on  the  gfound 
that  his  findings  are  not  supported  by  the  evidence.  But  he  did  have  evi- 
dence before  him.  That  evidence  may  or  may  not  have  been  legal  evidence 
according  to  the  standard  of  the  text-books.  It  may  have  been  hearsay. 
It  may  have  been  secondary.  It  may  have  been  delivered  by  an  incompe- 
tent witness.  Or  it  may  have  been  such  as  the  courts  would  receive.  But, 
whatever  it  was,  it  was  evidence  "satisfactory  to  him!" 

The  above  paragraph  has  already  played  an  important  part  as  will 
be  hereafter  seen  in  the  fight  that  has  been  made  in  Congress  to 
eliminate  wholly  the  present  fraud  order  process.  Undoubtedly,  it 
will  play  no  small  part  in  the  further  fight  which  must  be  made 
to  bring  about  that  necessary  result.     The  opinion  thus  closes: 

The  postmaster-general  had,  under  the  power  with  which  he  is  clothed, 
the  right  to  investigate  the  subject-matter.  It  was  his  right  and  duty  to 
ascertain  whether  the  methods  of  the  bank  were  to  further  a  scheme  by 
the  use  of  the  mails  to  obtain  money  by  fraudulent  means.  His  findings  of 
fact  were  that  such  practices  were  carried  on.  He  had  the  power  to  act. 
He  committed  no  error  of  law.  And  his  findings  of  fact  are  not  open  to 
inquiry  by  the  courts.  The  restraining  order  heretofore  issued  is  vacated. 
The  writ  of  injunction  prayed  for  is  denied. 

The  astounding  character  of  McPherson's  opinion  was  reflected 

in  the  columns  of  the  press.     The  St.  Louis  World  in  an  editorial 

entitled  "An  Extraordinary  Decision/'  comments  thus: 


600  THE  SIEGE  OF  UNIVERSITY  CITY 

In  a  debate  in  the  British  Parliament,  a  few  years  ago,  a  somewhat 
excited  member  told  Joseph  Chamberlain  that  a  decision  in  a  certain  case 
was  not  endorsed  by  various  distinguished  Ia\vj-ers.  "Lawyers,"  said  Cham- 
berlain, with  that  sneer  for  which  he  is  famous,  "I  know  of  no  bigger  fools 
than  lawyers, — unless  it  be  the  judges."  One  Smith  McPherson,  a  United 
States  district  judge,  hailing  from  Red  Oak  in  the  neighboring  state  of 
Iowa,  has  rendered  judgment,  refusing  to  grant  the  injunction  sought  by 
the  People's  United  States  Bank,  for  reasons  that  will  appear  to  the  aver- 
age layman  to  be  little  short  of  grotesque.  Stated  briefly,  his  reasons  are 
as  follows: 

That  no  court  has  a  right  to  review  the  decisions  of  the  postmaster- 
general. 

That  the  postmaster-general  in  all  cases  pertaining  to  the  postoffice,  is  a 
court  of  last  resort. 

That  the  right  of  a  person  to  receive  mail  is  not  actually  a  right,  but  a 
privilege. 

That  the  previous  decisions  to  the  contrary  by  United  States  courts  are 
not  worthy  of  consideration,  for  the  reason  that  those  decisions  have  been 
appealed  and  the  appeals  are  now  pending. 

Leaving  out  all  question  as  to  the  merits  of  this  particular  case,  no  fair- 
minded  person  will  doubt  that  Smith  McPherson  has  amply  demonstrated 
that,  in  some  cases  at  least,  Joseph  Chamberlain's  opinion  of  the  judi- 
ciary was  merited.  The  assumption  that  no  court  has  the  right  to  review 
the  decisions  of  an  appointive  officer  may  appeal  to  Russian  aristocrats,  but 
would  hardly  find  endorsement  among  any  class  of  Americans. 

After  commenting  upon  the  fact  that  the  acts  of  other  adminis- 
trative officers  are  subject  to  judicial  review,  the  editorial  thus 
proceeds : 

His  rulings,  absurd  though  they  are,  do  not  constitute  Judge  McPher- 
son's  worst  offense.  At  the  opening  of  the  afternoon  session  of  the  court, 
addressing  the  attorneys  for  both  sides,  he  said  that  he  had  paid  a  great 
deal  of  attention  to  the  present  case,  and  had  read  much  about  it  in  the 
newspapers.  "It  is  a  part  of  honesty  to  tell  you  this,"  said  the  court,  "but, 
at  the  same  time,  what  attention  I  have  given  the  case  was  necessarily  hur- 
ried and  incomplete.  In  reading  over  the  petition  for  the  injunction.  I  could 
not  fail  to  observe,  not  only  what  was  alleged  in  that  petition,  but  also  what 
was  omitted  about  the  bank — purposely  as  it  seemed  to  me,  for  reasons 
best  known  to  counsel  for  the  bank."  The  court  then  proceeded  to  read 
certain  statements  that  had  appeared  in  the  St.  Louis  Post-Dispatch,  the 
newspaj)er  that  has  been  fighting  the  People's  L^nited  States  Bank  for  sev- 
eral months.  Jurors  are  debarred  by  the  courts  from  reading  newspaper 
accounts  of  matters  in  litigation.  Smith  McPherson  was  both  judge  and 
jury  in  this  case.  Yet,  on  his  own  admission,  he  went  otitside  of  the  law 
ami  evidence,  and  permitted  his  mind  to  he  influenced  by  newspaper 
articles,  and  grossly  ])rejudiccd  newspaper  articles  at  that. 

The  Post-Dispatch,  the  same  day,  appeals  editorially  to  the  di- 
rectors to  "Protect  the  Deluded  Investors,"  if  the  final  decision  of 
Judge  ^McPherson  should  leave  the  bank  in  their  charge.  The  lat- 
tcr's  remarkable  opinion  is  taken  as  giving  license  for  these  vivid 
sentences: 

The  questions  suggested  by  Judge  MePherson's  opinion  go  to  the  vitals 
of  tlie  fraud  on  which  the  bank  was  founded,  and  the  rotten  conditions  ex- 
isting in  the  institution.  These  questions  arc,  in  effect,  deadly  criticisms 
of  the  false  representations  by  which  Promoter  Lewis  obtained  absolute  con- 
trol of  the  bank  and  loaned  capital  to  himself  and  his  own  enterprises. 

How  questions  which  purport,  on  their  face,  to  be  asked  for  in- 


THE  DREYFUS  CASE  OF  AMERICA  601 

formation  which  the  judge  admittedly  did  not  possess,  can  show 
anything  except  his  Honor's  ignorance,  is  not  apparent.  McPher- 
son's  peculiarly  worded  opinion  was  confessedly  based  only  on  the 
"fact  stated  in  the  bill."  Its  criticisms  took  the  form  of  questions 
as  to  matters  of  fact  on  which  the  court  was  ignorant.  Yet  the 
hostile  spirit  which  it  breathed  throughout  served  to  enable  the 
Post-Dispatch  to  justify  itself  in  its  campaign  of  vilification. 

Not  content  with  the  brief  notice  given  in  the  Post-Dispatch  of 
his  facetious  comparison  of  the  People's  Bank  with  the  "Mississippi 
Bubble,"  Judge  McPherson,  a  few  days  later,  granted  to  a  reporter 
for  that  newspaper  an  interview  apropos  -of  investigations  then 
being  made  of  a  number  of  alleged  get-rich-quick  concerns  in  St. 
Louis.  After  commenting  on  "tlie  desire  of  people  to  get  some- 
thing for  nothing,"  and  describing  "the  pitiable  sight  of  thousands 
of  people  scrambling,  shoving,  fighting  to  place  their  money  in  the 
hands  of  absolute  strangers,"  the  judge  thus  comments  on  the  col- 
lapse which  in  his  opinion  must  result : 

It  is  only  another  Mississippi  Bubble  burst.  It  is  only  another  John 
Law,  a  man  of  more  brains  than  honor,  sweeping  in  his  victims,  rifling  their 
pockets  and  thrusting  them  out  again.  If  every  man  or  woman  about  to 
invest  in  such  a  scheme  would  read  Washington  Irving's  short  story,  "The 
Mississippi  Bubble,"  there  would  be  fewer  tales  of  widows  losing  the  hard- 
earned  savings  of  years.    There  would  be  fewer  get-rich-quick  concerns. 

Everyone  has  heard  the  story  how  John  Law  of  England  went  to 
France  and  secured  the  help  of  Louis  XV.  in  his  scheme  to  inflate  the 
finances  of  the  coimtry.  The  people  besieged  him,  fighting  in  their  mad  fear 
that  all  the  paper  money  would  be  gone  before  they  had  opportunity  to 
change  their  coin  for  it.  The  bills  of  Law's  bank  were  to  bear  interest  and 
it  was  rumored  that  coin  would  show  diminution  in  value.  Irving  said: 
"So  great  became  the  rush  of  depositors  and  so  intense  their  eagerness  that 
there  was  quite  a  crowd  and  struggle  at  the  bank  door.  A  ludicrous  panic 
was  awakened,  as  if  there  was  danger  of  their  not  being  admitted.  An 
anecdote  of  the  time  relates  that  one  of  the  clerks  with  an  ominous  smile 
called  out  to  the  struggling  multitude,  "Have  a  little  patience,  my  friends, 
we  mean  to  take  all  your  money."  It  is  so  today  and  even  more  pronounced 
than  then. 

More  than  one  hundred  and  twenty-five  alleged  fraud  concerns,  I  have 
been  informed,  are  now  under  investigation  by  the  postoffice  inspectors  in 
St.  Louis.  My  views  on  these  matters  are  well  known,  but  it  would  hardly 
be  ethical  for  me  to  refer  to  any  one  concern.  I  am  in  favor  of  guarding 
the  people's  money  as  well  as  it  can  be  done.  I  have  stated  from  the 
bench  that  I  believe  the  law  giving  the  postmaster-general  authority  to  is- 
sue fraud  orders,  on  evidence  satisfactory  to  him,  is  a  good  law.  ♦  ♦  • 
People  should  remember  that  it  is  impossible  to  get  something  for  nothing. 

Postoffice  Inspector-in-Charge  Fulton,  protecting  the  people's 
money  by  the  investigation  of  over  a  hundred  alleged  fraudulent 
concerns ;  the  Post-Dispatch,  self-appointed  guardian  of  the  people's 
funds;  and  Judge  IMcPherson,  defender  of  the  Administration,  are 
here  seen  in  the  role  of  a  pleasant  mutual  admiration  society. 

While  McPherson's  opinion  does  not  appear  to  have  been  tele- 
graphed generally  over  the  country,  the  substance  of  it  was  com- 
municated by  mail  to  out-of-town  papers  through  their  St.  Louis 
exchanges.     The  phrase,  "It  is  strange  that  any  intelligent  person 


602  THE  SIEGE  OF  UNIVERSITY  CITY 

could  be  found  who  would  invest  a  dollar  in  the  bank,"  was  wrested 
from  its  context  and  widely  published  as  a  deliberate  condemnation 
from  the  Federal  bench  of  the  entire  institution.  The  New  York 
Commercial^  for  example,  after  quoting  the  above  sentence,  adds  the 
following  comment:  "The  judge  uttered  this  after  going  over  the 
charges  as  presented  by  both  sides  of  the  controvers3\"  The  facts 
are  precisely  to  the  contrary.  There  had  been  no  hearing  whatever 
upon  the  merits  of  the  case.  There  was  no  foundation  for  this 
extraordinary  statement  of  the  court  other  than  he  could  obtain 
from  the  jaundiced  columns  of  the  Post-Dispatch  or  from  other 
newspapers.  The  injury  to  Lewis'  reputation,  and  the  resulting  loss 
of  prestige  to  his  publishing  enterprise,  from  this  apparently  ad- 
verse decision  of  a  Federal  judge  has  been  incalculably  great.  Prac- 
tically all  of  the  news  items  published  throughout  the  country  at  this 
time  quote  the  above  sentence.  Tlie  judge's  admission  that  he  did 
not  know  what  he  was  talking  about  when  he  made  this  state- 
ment, was  most  generally  omitted. 

THE  DEFEAT  AT  ST.  PAUL. 

In  pursuance  of  their  settled  policy  to  fight  the  case  to  the  last 
gasp,  the  officers  of  the  bank  determined  upon  one  more  legal  bat- 
tle. Leave  to  renew  the  proceedings  for  an  injunction  had  been 
granted  by  Judge  McPherson  Avhen  he  denied  the  original  applica- 
tion. Hence,  on  Saturday,  August  5,  the  bank  presented  an  amended 
bill,  and  renewed  its  application  for  an  injunction,  in  the  United 
States  Circuit  Court  at  St.  Paul.  This  action  was  thus  reviewed  in 
the  Globe-Democrat  on  Sunday  morning: 

The  new  bill  will  go  before  either  Judge  Sanborn  or  Judge  Van  Devanter, 
judges  of  the  Eighth  Federal  Circuit,  at  St.  Paul.  The  bank  took  advantage 
of  its  option  to  bring  the  bill  before  any  other  circuit  judge,  instead  of 
having  it  reheard  ])y  Judge  McPherson.  Attached  to  the  petition  is  a  no- 
tice to  District  Attorney  Dyer  that  the  bank's  attorneys  will  make  applica- 
tion at  St.  Paul  at  ten  o'clock  tomorrow.  Colonel  Dyer  will  probably  ap- 
pear for  the  Government  on  account  of  his  familiarity  with  the  case.  The 
amended  bill  renews  all  the  charges  of  the  original,  but  also  contains  much 
new  material  concerning  the  operation  of  the  bank.  This  is  designed  to 
answer  pointed  comments  and  questions  put  by  Judge  McPherson  in  his 
memorandum  of  opinion. 

The  evening  newspapers  of  Monday,  August  15,  contained  the 
news  that  Judge  ^lePherson's  decision  had  been  sustained.  The 
authority  of  the  postmaster-general  to  issue  the  fraud  order  was 
r.ffirmed.  The  application  of  the  bank  for  a  F'ederal  injunction  was 
irrevocably  lost.  Thus,  while  the  bank  was  winning  its  battles  in  the 
State  courts  against  the  State  authorities  though  led  by  the  attor- 
ney-general and  secretary  of  State,  the  Federal  forces,  under  the 
captaincy  of  Assistant  Attorney-General  Goodwin  had  scored  in 
the  Federal  courts  a  decisive  victory.  The  Chronicle  of  Monday 
evening,  August  14,  comments  thus  under  the  headlines  "Injunction 
Against  Fraud  Order  Is  Denied  to  Lewis": 

The  temporary  injunction  asked  by  the  People's  United  States  Bank  has 
been  denied  at  St.  Paul  l)y  Judge  Willis  Van  Devanter.     The  case  was  ar- 


THE  DREYFUS  CASE  OF  AMERICA  603 

gued  last  Monday.  Attorney  Dyer  in  behalf  of  the  Government  made  no  ar- 
gument. He  merely  stated  that  the  application  for  a  restraining  order  had 
been  argued  before  a  judge  of  concurrent  jurisdiction,  and  that  the  appli- 
cation for  hearing  at  St.  Paul  was  simply  a  change  of  venue.  He  asked 
that  the  case  be  sent  back  to  the  United  States  Circuit  at  St.  Louis.  Judge 
Van  Devantcr,  however,  passed  upon  the  whole  matter.  His  decision  is,  in 
eflFect,  that  the  postmaster-general  has  the  right  to  issue  fraud  orders  at 
his  own  discretion. 

Judge  Barclay  said  on  Monday  morning  he  did  not  know  what  course 
is  now  open  to  the  People's  United  States  Bank,  further  than  that  steps 
will  be  taken  to  continue  the  case  upon  appeal.  It  is  generally  under- 
stood that  the  adverse  decision  of  the  court  at  St.  Paul  will  necessitate  the 
appointment  of  a  receiver  by  Judge  McElhinney.  Otherwise,  stockholders 
living  outside  the  state  will  be  likely  to  ask  for  a  receiver  in  the  Federal 
courts.  Should  the  directors  attempt  to  liquidate  the  affairs  of  the  bank 
they  would  be  deluged  with  suits.  A  receiver  would  be  protected  bj  the 
court  and  would  not  be  thus  handicapped. 

All  recognized  that  the  defeat  of  the  bank  at  St.  Paul  marked 
a  crisis  in  its  career,  but  few  were  prepared  for  the  denouement 
that  followed.  Important  as  the  announcement  of  Judge  Van 
Devanter's  decision  seemed  on  Monday,  it  was  overshadowed  by 
next  day's  advices.  The  morning  newspapers  of  Tuesday,  chroni- 
cled the  fact  that  the  directors  of  the  bank  had  voted  to  go  into  volun- 
tary liquidation.  But  even  this  news  was  relegated  to  second  place 
by  the  evening  papers.  They  bristled  with  the  headlines,  "Second 
Receiver  Appointed  for  the  People's  Bank."  Despite  the  resolution 
of  the  directors  to  liquidate  its  affairs,  the  bank  had  once  more  been 
placed  in  the  hands  of  a  receiver,  this  time  with  definite  instructions 
to  wind  up  its  affairs  under  the  authority  of  the  courts. 

THE   SECOND   RECEIVER, 

An  entirelj^  new  turn  was  given  to  the  affair,  however,  by  the  sur- 
prising news  that,  unmindful  of  the  announced  desire  of  the  State 
authorities,  the  court  had  declined  to  reappoint  the  first  receiver. 
On  the  contrary,  acting  upon  the  recommendation  of  counsel  for 
the  bank,  he  had  selected  a  citizen  of  St.  Louis  county.  The 
views  of  the  newly  appointed  receiver  were  known  to  be  opposed 
to  those  of  the  State  authorities.  He  was  even  said  to  be  personally 
acceptable  to  Lewis  and  his  associates.  The  outcome  of  the  first 
receivership  had  been  a  decisive  victory  for  the  bank.  The  contest 
in  the  Federal  courts  had  been  an  equally  decisive  conquest  for  the 
Federal  forces.  The  struggle  over  the  second  receivership  was  a 
drawn  battle.  The  State  authorities  indeed  forced  the  bank  into 
liquidation.  But  the  fruits  of  victory  were  snatched  from  them 
when  the  receivership  passed  from  their  hands  to  one  of  their 
political  opponents.  Comes  now  a  lull.  A  truce  was  declared  be- 
tween the  bank  and  the  second  receiver,  with  consent  of  the  court, 
under  which  the  bank  agreed  to  suffer  the  liquidation  of  its  affairs. 
A  basis  for  the  receiver's  compensation  was  agreed  upon,  which  as 
compared  to  the  charges  of  the  first  receiver,  was  nominal.  A  pro- 
viso was  made  that  the  case  should  be  carried  to  the  Supreme  Court 
of  Missouri  for  final  adjudication.     The  newly  appointed  receiver 


604  THE  SIEGE  OF  UNIVERSITY  CITY 

filed  his  bond  in  court  on  the  next  morning,  and  announced  his 
projjosed  policy,  according  to  the  Republic,  as  follows: 

I  will  take  charge  of  the  institution  with  a  view  to  closing  up  its  busi- 
ness in  the  shortest  possible  time  and  with  the  least  cost.  I  want  the  bank's 
co-operation  and  expect  to  secure  it.  The  officers  of  the  banii  will  be  rec- 
ognized at  every  stage.  I  could  not  do  myself  justice  nor  those  who  are 
financially  interested  without  such  support.  I  will  not  accept  the  fee  usu- 
ally allowed  by  the  court  nor  half  of  such  amount.    My  fee  will  be  nominal. 

The  receiver's  bond  was  first  fixed  by  the  court  at  one  million  dollars. 
At  the  suggestion  of  Judge  Shepard  Barclay,  attorney  for  the  bank,  it  was 
later  reduced  to  $250,000.  Barclay  said  the  receiver  would  not  at  any  one 
time  come  into  possession  of  all  the  assets.  Essen,  when  interviewed  by 
the  court  and  by  Judge  Barclay,  refused  to  accept  the  appointment,  if 
vacation  or  ouster  proceedings  were  to  be  instituted  against  him.  It  was 
then  agreed  that  such  proceedings  would  be  merely  formal.  His  possession 
of  the  assets  of  the  bank  would  not  be  disturbed.  Judge  Barclay  then 
filed  a  motion  to  vacate  and  announced  his  intention  of  taking  an  appeal. 
He  did  not,  however,  file  a  supersedeas  bond.  Thus,  by  the  time  the  mat- 
ter is  passed  on  by  the  Supreme  Court,  the  hank's  business  will  probably 
have  been  wound  up  by  the  receiver.  The  filing  of  these  motions,  it  was 
stated,  was  simply  for  the  purpose  of  preserving  the  bank's  rights. 

The  removal  of  the  bank's  assets  once  more  from  the  hands  of  its 
officers  was  regarded  at  Washington  and  at  Jefferson  City  as  in  some 
sense  a  justification  of  the  Federal  and  State  authorities.  The  al- 
lies pointed  to  the  court's  action  as  their  defense  against  the  at- 
tacks of  Lewis  and  his  associates  and  the  adverse  criticism  of  the 
press.  The  receiver  was  not  personally  to  their  liking.  But  since 
the  bank  was  being  wound  up  by  an  officer  of  the  court,  the  State 
authorities  had  the  right  to  intervene.  This  they  did  from  time  to 
time,  ostensibly  in  behalf  of  the  stockholders  and  depositors,  but 
actually  in  furtherance  of  their  joint  campaign  with  the  Federal 
authorities  to  put  both  the  bank  and  Lewis  out  of  business.  The 
secretary  of  state  and  attorney-general,  smarting  over  the  loss  of 
the  first  receivership  and  the  consequent  newspaper  criticism,  kept 
a  jealous  and  watchful  eye  upon  the  process  of  liquidation  of  the 
bank  during  the  fall  and  winter  of  1905  and  1906.  They  objected 
to  the  decision  of  the  reorganized  directorate  to  cancel  the  joint 
note  of  the  first  board  of  directors  for  $146,000  and  charge  off  that 
sum  as  promotion  expenses.  They  insisted  that  the  receiver  be  in- 
structed to  bring  suit  for  this  amoimt  against  I^cwis  and  the  other 
makers.  They  criticized  freely  Lewis'  attempts  to  gain  control  of 
the  funds  invested  in  the  bank.  They  even  tried  to  thwart  his  ef- 
forts. To  this  end  they  moved  the  court  to  set  aside  the  transfers 
to  Lewis  by  the  stockholders  and  depositors  in  the  bank  of  their 
evidences  of  indebtedness.  They  alleged  that  Lewis  had  misrepre- 
sented the  facts  and  that  the  holders  of  these  securities  did  not 
understand  the  actual  situation.  They  undertook,  in  short,  to  act 
upon  the  theory  advanced  by  the  secretary  of  state  in  formulating 
his  original  demands,  namely,  that  the  plans  of  the  bank  being 
novel  and  the  stockholders  being  widely  scattered,  it  was  incumbent 


THE  DREYFUS  CASE  OF  AMERICA  505 

upon  him  to  take  a  more  than  ordinary  degree  of  interest  in  its 
affairs. 

Imagine,  then,  the  consternation  in  the  camp  of  the  allies,  when 
the  lower  court  was  reversed  by  the  Supreme  Court  of  Missouri 
and  the  second  receiver  was  also  ousted !  The  continuation  of  the 
policy  of  "concerted  action,"  whereby  the  State  and  Federal  authori- 
ties kept  up  the  iight  on  Lewis  during  the  fall  and  winter  of  1905 
and  1906  will  be  considered  in  the  next  chapter.  The  present  chap- 
ter may  be  brought  to  a  close  with  the  story  of  the  moral  victory 
thus  finally  gained  by  the  bank  over  the  allies.  This  was  signal- 
ized by  the  decision  of  the  Supreme  Court  of  Missouri  in  the  case 
of  the  State  ex  rel.  Hadley,  Attorney-General,  vs.  People's  United 
States  Bank,  appellant.  The  opinion  of  the  court  sitting  in  banc 
was  lianded  down  on  June  20,  1906.  This  opinion  is  writcen  by  J. 
Lamm.     It  expressed  the  court's  unanimous  judgment. 

THE   MISSOURI   SUPREME    COURT  DECISION. 

The  court  held  in  brief  that  the  appointment  of  a  receiver  under 
the  statutes,  to  wind  up  the  bank,  was  not  authorized  for  the  reason 
that  it  was  in  a  solvent  condition.  It  was  the  purpose  of  this  stat- 
ute, said  the  court,  "not  to  vex  or  hinder,  but  to  aid  the  banking 
business."  It  was  held  that  the  purchase  of  the  stocks  of  other 
corporations  by  the  bank,  though  prohibited  by  the  statutes,  could 
not  be  made  a  ground  for  a  receivership,  because  the  bank  had 
promptly  disposed  of  the  stock  when  requested  and  had  thus  atoned 
for  its  offense.  The  contrary  said  the  court,  "would  be  sour  ad- 
ministration of  the  law  and  would  defeat  the  very  purpose  of  the 
statutes."  The  contention  of  the  secretary  of  state  and  the  inspec- 
tors that  it  was  improper  for  Lewis  to  carry  the  stock  of  the  bank 
in  his  own  name,  during  its  formative  period,  was  distinctly  nega- 
tived. The  court  held  that  the  carrying  of  the  stock  in  the  name 
of  its  president,  who  was  also  the  bank's  promoter,  was  no  ground 
for  appointing  a  receiver.  Swanger's  contention  that  the  receiver- 
ship was  necessitated  by  the  fraud  order  was  also  positively  nega- 
tived by  the  court.  Two  reasons  were  stated:  First,  "because  the 
fraud  order  does  not  rise  to  the  dignity  of  an  adjudication  by  a 
court";  and  second,  "because  the  order  alone  was  pleaded,  not  the 
facts  and  evidence  on  which  the  order  was  based."  Finally,  the 
court  ruled  that  where  the  evils  complained  of  in  the  management 
of  a  solvent  bank  were  "correctable  in  other  ways  than  by  the  ex- 
treme method  of  appointing  a  receiver,"  that  method  ought  not  to 
be  adopted.  The  entire  decision  was  a  sweeping  condemnation  of 
the  unwarrantable  and  wrongful  interference  of  the  State  authori- 
ties in  the  bank's  affairs. 

After  a  resume  of  the  history  of  the  case,  the  court  states,  as  a 
chief  contention  of  the  plaintiff,  their  insistence  that  "because  of 
promises  made  by  a  promoter  before  the  incorporation  of  a  bank, 
broken  after  its  incorporation,  the  bank  should  be  taken  as  born  in 
the  gall  of  bitterness  and  in  the  bond  of  iniquity,  so  to  speak,  as 


506  THE  SIEGE  OF  UNIVERSITY  CITY 

a  pre-conceived  and  elaborate  scheme  to  defraud  and,  hence,  the  arm 
cf  the  law  should  lift  its  properties  and  affairs  out  of  the  hands  of 
its  board  of  directors  and  administer  them  through  the  court's  re- 
ceiver." This  sentence  has  been  sometimes  quoted  as  a  conclusion 
of  the  court.  The  contrarj'  is  true.  It  is  stated  as  a  contention  of 
the  attorne3'-i^eneral  in  which  the  court  docs  not  concur. 

The  court  next  proceeds  to  review  the  history  of  the  organiza- 
tion and  promotion  of  the  bank  and  sums  up  in  a  single  paragraph 
a  truly  remarkable  iour  de  force  of  metaphor  and  hyperbole  culled 
from  the  many  hundred  pages  of  Lewis'  promotion  literature.  The 
court  is  thereupon  tempted  to  a  rhetorical  flight  which  puts  the  cap 
sheaf  of  climax  upon  Lewis'  alleged  misrepresentations.     The  court 

says : 

It  needs  not  the  test  of  a  cold  judicial  touchstone  to  determine  that  a 
good  deal  of  the  foregoing  is  (using  the  word  in  its  primal  meaning)  af- 
tiatus-rhodomontade.  Thus:  Heart's  blood,  wealthy  scoundrel,  Croesus! 
I  would  advise  my  own  mother  to  put  the  last  penny  she  had  in  the  world 
into  it !  profits  that  will  burn  one's  hands !  the  promise  to  sacrifice  the 
flesh  of  his  body !  the  sweetest  wine  that  can  pass  a  man's  lips,  to-wit,  love 
and  confidence !  tower  of  safety !  strength  to  a  million  families !  stumbling 
blocks  in  the  path  of  a  man  whose  greed  for  wealth  shall  tempt  him  to 
stock -job  or  bleed  the  bank,  that  would  break  his  neck !  a  hope  to  see  the 
day  when  an  election  to  the  board  of  directors  would  be  harder  to  gain  and 
more  sought  after  than  an  election  to  Congress ! — what  is  all  this  but  a  flour- 
ish of  trumpets  of  advertising  rhetoric  of  the  type  used  in  the  exploitation 
of  bitters,  Peruna,  and  liver  pills — the  transparent  use  of  bold  hyperbole, 
of  wh'ch  rhetorical  figure  it  is  said  that  "it  lies  without  deceiving" — all  lu- 
brications of  that  ilk  failed  to  reach  either  the  form  or  substance  of  enforce- 
able promises. 

"When  the  mass  is  put  in  a  reducing  crucible  of  common  sense 
and  the  dross  of  mere  verbiage  is  burned  and  refined  away,"  the 
court  concludes,  however,  that  "promises  were  made  by  him  and 
that,  too,  of  a  substantial  sort."  The  court  thereupon  enumerates 
Lewis'  alleged  promises  and  concludes  them  to  have  been  broken. 
Lewis  was  doing,  says  the  court,  "in  a  circuit  (as  the  fox  runs)  ex- 
actly what  he  had  promised  should  not  be  done  in  a  straight  line 
(as  the  bee  flies),  to-wit,  loan  the  bank's  funds  to  himself  or  its 
directors."  The  court  concludes,  therefore,  that  the  secretary  of 
state  was  quite  right  in  demanding  a  reorganization  of  the  board  of 
directors.  It  then  points  out,  however,  that  such  reorganization  had 
actually  l)ccn  made  and  that  the  personnel  of  the  board  was  accepta- 
ble to  tlie  State  at  the  very  time  of  the  appointment  of  the  receiver. 

The  attentive  reader  will  remember  that  Lewis  does  notdeny  having 
borrowed  the  funds  of  the  bank,  contrary  to  his  original  intention, 
but  contends  that  his  acts  in  that  regard  were  in  the  interests  of 
the  bank  and  its  stockholders  and  were  brought  about  by  force  of 
unexpected  circumstances.  He  further  contends  tliat  all  these  loans 
were  abundantly  secured.  The  court  remarks  that  the  secretary  of 
state  objected  to  these  loans  on  two  grounds:  first  as  unsafe,  and  sec- 
ond as  made  in  violation  of  Lev/is'  promises  as  promoter.  It  then 
finds  that  Swanger  had  exceeded  his  authority  in  "laying  his  com- 


THE  DREYFUS  CASE  OF  AMERICA  507 

mands  upon  the  bank  that  they  should  be  speedily  eliminated."  The 
court  finds  that  the  loans  were  not,  in  fact,  unsafe  "so  as  to  put  the 
bank  in  present  jeopardy"  and  the  court  so  holds.  "Conceding  the 
loans  as  safe  investments  at  the  time  of  the  application  for  a  re- 
ceiver," the  court  next  inquires  whether  the  fact  that  "loans  made 
by  the  bank  after  its  incorporation  in  substantial  violation  of  Lewis' 
promises  as  promoter  are  grounds  for  a  receivership."  It  says:  "The 
remedy  proposed  by  the  State  in  this  instance  is  to  seize  and  ad- 
minister upon  the  assets  of  the  corporation,  i.  e.,  in  eifect  to  destroy 
it — not  to  cure  the  corporate  sickness — which  is  somewhat  akin  to  a 
watchmaker  smashing  a  watch,  out  of  repair,  instead  of  mending  it. 
The  vice  of  this  position,  we  apprehend,  is  further  illustrated  when 
we  consider  that  no  creditor  is  complaining  here  nor  are  the  sub- 
scribing stockholders  complaining.  For  aught  that  ajjpears  in  the 
petition  the  subscribers  may  have  acquiesced  in  the  change  of  plans 
"and  may  have  released  all  right  of  action,  if  any  they  had,  for  the 
divergence  complained  of,  or  estopped  themselves  to  complain." 
After  quoting  numerous  precedents  and  statutes  and  reciting  sun- 
dry collateral  issues  which  the  court  does  not  deem  needful  to  pass 
upon,  it  says:  "All  that  is  necessary  for  us  to  hold  and  what  we 
do  hold,  is  that  *  *  *  a  receivership  to  lift  the  assets  of  the 
People's  United  States  Bank  out  of  the  hands  of  its  board  of  direc- 
tors and  wind  up  its  affairs,  was  not  a  suitable  remedy  for  correcting 
the  evils  now  under  consideration  or  one  contemplated  by  the 
statutes." 

The  court  (after  holding  that  the  error  of  the  bank  in  purchas- 
ing the  stocks  of  other  corporations  was  atoned  by  the  fact  that 
they  were  promptly  disposed  of  on  the  request  of  the  secretary  of 
state),  next  rules  decisively  that  the  act  of  Lewis  in  carrying  stock 
in  his  own  name  was  permissible  on  the  ground  that  the  bank  was 
yet  in  a  formative  condition.  It  says  "the  funds  entrusted  to  Lewis 
seem  to  have  been  preserved  intact.  The  vast  number  of  stock- 
holders added  materially  to  the  burden  and  delay  of  issuing  stock 
certificates.  *  *  *  His  (Swanger's)  demands  in  this  particular 
had  either  been  complied  with  or  were  in  the  orderly  process  of  rea- 
sonable compliance  when  the  receiver  was  appointed."  Several  of 
Lewis'  principal  contentions  were  thus  definitely  sustained.  It  was 
adjudged  that  the  bank  was  actually  in  a  formative  state,  that  its 
funds  were  intact  and  that  Lewis  was,  in  good  faith,  complying  with 
the  requirements  of  the  State  banking  department.  The  court  touch- 
ing upon  tlie  fraud  order,  then  says: 

If  we  concede  to  the  attorHej-general  that  the  fraud  order  rendered  it 
impossible  for  the  bank  to  continue  on  its  present  lines  as  a  going  concern, 
yet,  if  (being  solvent)  it  must  go  into  liquidation,  or,  peradventure,  change 
its  style  of  banking,  or  even  move  into  a  business  centre  in  order  to  con- 
tinue its  banking  operations  with  a  chance  to  succeed,  why  may  not  these 
matters  be  trusted  to  its  present  board  of  directors  and  its  stockholders 
*  *  *  and  why  must  the  bank,  on  that  score,  be  wiped  out  of  exist- 
ence through  the  interference  of  the  State  of  Missouri?     *     *     •     Where 


508  THE  SIEGE  OF  UNIVERSITY  CITY 

public  policy  is  not  concerned,  what  good  reason  can  be  assigned  for  the 
intermeddling  of  the  State  in  private  affairs? 

In  summing  up,  the  court  touches  upon  Swanger's  contentions 
that  the  proxies  obtained  by  Lewis  are  "couched  in  such  terms  as 
to  be  insidiously  dangerous  to  the  health  of  the  bank/'  that  pro- 
motion expenses  were  charged  illegally,  that  the  joint  note  of  the 
directors  for  these  expenses  by  Lewis  and  others  should  be  paid, 
and  that  Lewis  was  illegally  chosen  president  and  director,  since  he 
was  not  the  bona  fide  owner  of  at  least  two  shares  of  the  capital 
stock.  The  court  stated  that  these  evils,  if  found  to  exist,  could  be 
corrected  by  the  lower  court  without  the  necessity  of  a  receivership. 
It  is  therefore  directed  that  the  act  of  Judge  McElhenney,  in  refus- 
ing to  revoke  his  order  appointing  the  second  receiver,  be  reversed, 
and  that  the  trial  court  be  directed  to  sustain  the  motion  to  re- 
voke and  to  proceed  with  the  cause. 

The  Federal  authorities  obtained  a  crumb  of  comfort  from  the 
court's  opinion  that  the  large  loans  of  the  bank  to  his  corporations 
were  in  violation  of  Lewis'  promises  as  promoter.  The  State  authori- 
ties, however,  were  denied  even  this  slight  measure  of  justification 
by  the  ruling  that  Lewis'  promises  as  promoter  were  no  affair  of  the 
bank  as  a  corporate  entity.  The  court  found,  in  short,  that  the  re- 
ceivership was  uuAvarranted  and  illegal  and  that  the  secretary  of 
state  and  attornej'^-general  had  greatly  exceeded  their  authority. 

Lewis'  opponents  still  point  with  much  satisfaction  to  Judge 
Lamm's  satirical  language  touching  the  style  employed  by  the  for- 
mer in  his  promotion  literature.  They  also  quote,  as  justification  for 
the  fraud  order,  the  court's  finding  that  Lewis'  promises  as  pro- 
moter had  been  broken.  The  court,  however,  expressly  disclaims 
any  intention  to  "pass  judgment  of  approval  or  disapproval  upon  an 
order  issued  under  Federal  statutes  or  departmental  rules,  by  a  de- 
partment of  the  Federal  Government."  Its  decision  was  thus,  in  set 
terms,  limited  to  the  receivership  procured  by  the  State  authorities. 
The  question  of  the  propriety  of  the  fraud  order  was  not  involved, 
nor  can  this  opinion  be  properly  cited  to  bolster  up  the  Govern- 
ment's case.  In  the  happy  phrase  of  Dean  Swift,  every  tub  must 
stand  on  its  own  bottom. 

Let  us  now  trace  the  process  of  the  liquidation  of  the  bank's  af- 
fairs and  the  refunding  operations  whereby  Lewis  was  able  to  take 
up,  dollar  for  dollar,  every  loan  of  the  bank  to  his  corporations,  and 
whereby  he  also  came  into  possession  of  nearly  a  million  and  a  half 
dollars  of  the  bank's  funds.  This  he  accomplished  by  offering  the 
investors  their  choice  of  his  own  trustee  notes  or  preferred  stock  in 
the  Lewis  Publishing  Company  in  exchange  for  their  evidences  of 
indebtedness,  dollar  for  dollar,  in  lieu  of  the  cash  dividends  that 
would  otherwise  have  been  paid  them  by  the  receiver.  The  inves- 
tors thus  had  three  options  presented  to  them.  Hence,  the  title  of 
the  next  chapter. 


CHAPTER  XXII. 
THE  THREE  OPTIONS. 
The  Syndicate  of  Philanthropic  Vultures — Lewis'  First  Ap- 
peal— Kramer  Takes  the  Initiative — The  Express  Fraud 
Order — Origin  of  the  Woman's  National   Daily — The 
Five  Per  Cent  Trustee   Notes — A  Run   on  the   Trust 
Company — Inspectors  Threaten  the  Trust  Company — 
Lewis'  "Excommunicated" — Swanger's  Valedictory. 
In  every  issue  of  the  Woman's  Magazine  there  has  stood  our  guaranty 
that  if  any  reader  is  defrauded  by  any  announcement  appearing  in  these 
columns,  the  publishers  will  make  good  the  loss.    For  months,  the  announce- 
ments of  the  People's  United  States  Bank  have  thus  appeared.    This  bank 
was   launched   and   conducted   as   an  honest  proposition.     Through   a   far- 
reaching  conspiracy,  which  will  cause  the  blood  of  every  American  citizen 
to  boil  when  its  story  is  written,  an  effort  unparalleled  in  history  is  being 
made  to  destroy  this  bank.     If  this  succeeds,  we  shall  extend  our  guaranty 
to  the  bank.     I  will  make  good  any  loss  any  reader  of  this  paper  sustains 
through  investments  in  the  People's  United  States  Bank,  to  the  extent  of 
every  dollar  I  possess,  not  exempting  my  home  nor  my  interests  in  this  pub- 
lication.   Before  any  stockholder  or  depositor  of  the  People's  United  States 
Bank  shall  suffer  loss,  I  will  become  a  voluntary  beggar. 

Thus  Lewis  opens  the  campaign  by  which  he  rallied  his  follow- 
ing to  his  support  and,  despite  the  attacks  of  State  and  National 
authorities,  secured  control  of  more  than  a  million  and  a  half  dol- 
lars of  the  bank's  funds.  In  a  longer  editorial  in  the  same  issue, 
the  inspectors  are  characterized  as  "twenty-five-dollar-a-week 
clerks"  and  as  men  of  "limited  experience  and  calibre,  who  are  act- 
ing under  orders  and  animated  by  zeal  to  promote  selfish  ambitions." 
The  fact  that  the  substance  of  the  inspectors'  report  was  prema- 
turely published  in  the  Post-Dispatch,  is  referred  to  as  "trial  by  in- 
vestigation and  yellow  journalism."  The  fraud  order,  he  stated, 
was  never  intended  by  Congress  to  be  used  as  a  force  to  destroy  a 
legitimate  enterprise,  simply  because  some  of  the  features  of  that  en- 
terprise were  new  and  beyond  the  comprehension  of  the  "petty  minds 
of  inspectors,  who  have  sought  refuge  in  these  minor  Government 
offices  from  the  stress  of  strenuous  competition  for  daily  bread  and 
butter  in  the  busy  outside  world." 

THE    "syndicate    OF    PHILANTHROPIC    VULTURES." 

Lewis  signalized  the  occasion  of  his  first  victory,  the  dismissal  of 
the  receivership  proceedings,  by  issuing  a  circular  letter  to  all  of 
the  investors.  This  announcement  was  authorized  by  the  follow- 
ing resolution,  adopted  by  the  directors  at  a  meeting  on  July  20: 

The  president  submitted  to  the  board  of  directors  a  draft  of  a  circular 
letter,  dated  July  19,  1905,  which  he  proposed  should  be  sent  to  the  stock- 

509 


510  THE  SIEGE  OF  UNIVERSITY  CITY 

holders  of  this  bank,  together  with  certain  printed  matter  concerning  the 
bank,  embracing  certain  resolutions  of  the  directors  of  the  People's  United 
States  Bank,  July  10,  1905.  He  also  submitted  a  proposed  draft  of  another 
letter,  to  be  signed  by  himself  personally,  addressed  "To  my  many  loyal 
friends  who  are  standing  by  me  in  our  hour  of  trial"'  and  a  blank  for  as- 
signment and  transfer  to  him  of  certificates  of  stock  in  this  bank,  as  men- 
tioned in  said  circular  letter,  which  proposed  forms  were  approved  by 
the  board. 

The  first  of  these  circular  letters  may  be  quoted  as  a  type  of 
Lewis'  appeals.  V^iolent  objection  to  this  vein  of  comment  was  made 
by  both  tlie  Federal  and  State  authorities.  They  accuse  Lewis  of 
willful  and  deliberate  misrepresentation  in  these  statements.  They 
strive  to  defend  their  official  conduct  under  his  attacks  by  averring 
that  they  were  actuated  solely  by  their  official  oaths  and  duty.  The 
reader,  who  is  now  informed  as  to  the  attitude  of  the  St.  Louis  press 
and  the  findings  of  the  Supreme  Court  of  JNIissouri,  is  in  a  position 
to  intelligently  draw  his  own  conclusions.     Lewis  said: 

For  a  month,  the  land  has  rung  with  the  "charges"  of  a  yellow  press  in 
an  effort  to  destroy  our  bank.  We  have  been  tried  without  being  heard 
in  our  own  defense,  upon  complaint  of  postoffice  inspectors,  or  detectives, 
whose  methods  are  secret.  We  were  not  permitted  to  see  their  reports  or 
to  examine  any  witnesses,  althougii  the  reports  were  published  by  a  St.  I^ouis 
newspaper,  (owned  in  New  York)  before  we  were  allowed  to  make  answer 
or  defense.  Our  bank  has  been  marked  for  destruction.  It  is  the  Peo- 
ple's Bank.  I  have  warned  you  there  would  be  a  struggle  to  the  death. 
Without  notice  to  us,  a  "Receiver"  was  appointed  for  a  bank  whose  total 
liabilities  were  less  than  $2i25,000,  with  assets  of  over  $2,500,000.  Of  the 
assets  nearly  $1,500,000  was,  and  is,  available  immediately.  It  is  cash  de- 
posited in  other  banks.  The  assets  are  sound.  No  depositor  or  stockholder 
should  have  lost  one  penny. 

We  learn  that  a  ".syndicate"  of  philanthropic  vultures  is  being  formed 
to  offer  you  a  small  price  for  your  stock  or  to  get  a  percentage  upon  it 
for  collection.  Your  officers  and  directors  and  our  attorneys  are  fighting 
for  the  life  of  our  bank,  and  for  the  right  of  American  citizens  to  organize 
and  conduct  an  independent  enterprise  without  tribute  to  any  one.  Do  not 
be  misled  by  these  human  vultures !  Under  no  circumstances  let  go  of 
your  certificates.  Do  not  sign  any  papers,  giving  any  one  power  to  collect 
your  stock,  unless  you  first  advise  with  me.  The  bank  is  solvent.  It  has 
been  so  reported  by  the  receivers. 

With  God's  help,  and  the  determination  of  a  free  people,  we  will  get 
fair  play,  if  justice  still  remains  in  the  land.  I  ask  each  man  and  woman 
interested  to  write  a  letter  to  their  congressman  at  once.  Demand  that  a 
square  deal  be  given  the  People's  Bank,  and  that  we  be  permitted  to  be 
heard  in  our  own  defense.  I  ask  you  all  to  withhold  judgment  until  our 
reply  to  this  infamous  assault  can  be  heard.  To  protect  every  stockholder 
wlio  stands  by  me  and  our  bank  in  the  hours  of  this  attempt  at  its  destruc- 
tion, I  pledge  the  last  dollar  I  have  in  the  world,  even  my  own  home. 

The  days  immediately  following  the  ])romulgation  of  tlie  fraud 
order  were  crowded  so  thickly  willi  events,  tliat  the  mailing  of  the 
above  letter  ajjpcars  to  have  been  the  first  o])portunitv  afforded  the 
directors  of  tlie  bank  to  conununicate  officially  with  the  stockholders. 
News  of  what  was  happening  at  University  City,  was  being  con- 
veyed to  them,  meantime,  in  devious  ways.  The  first  intimation 
received  by  many  that  tlie  paternal  hand  of  Government  had  closed 
communication  with  the  bank  was  tlu-  unex))ected  receipt  of  returned 


^IVashingion   Bureau   of   the    U^omal^^s   National  Daily,   General  Robert   M.   McWadc 
in   charge 

'^Sanctum    of    the    Woman's    National    Daily,    north    pylon    of    the    Egyt'ian    Building, 
George    W.    Stearns,   Managing   Editor   in    charge 


•1^ 


5  ^ 


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=     O    O 


THE  DREYFUS  CASE  OF  AMERICA  618 

letters,  stamped  "fraudulent."  Other  missives,  long  unanswered, 
were  finally  returned,  thus  stamped,  in  the  official  envelopes  of  the 
dead-letter  office.  Notices  were  received  that  money  orders  would, 
on  application,  be  refunded.  Many  letters  containing  remittances 
were  never  heard  from.  Some  were  lost  or  stolen  in  the  mails. 
Others,  doubtless,  were  destroyed  as  unidentified  dead  letters.  Com- 
plaints only  brought  back  official  tracers,  advising  that  the  missing 
letters  could  not  be  found.  Trifling  as  such  things  may  seem,  the 
stationery,  postage  and  fees  for  remittances  were  confiscated.  The 
will  of  thousands  of  American  citizens  was  thus  thwarted  by  the 
superior  wisdom  of  the  guardians  of  the  people's  mails. 

The  patrons  of  the  bank,  many  of  whom  had  never  previously 
heard  of  such  a  thing  as  a  fraud  order,  had  little  opportunity  to  re- 
cover from  the  unwelcome  shock  before  the  postman  delivered  the 
first  of  a  series  of  letters  from  unfamiliar  law  firms  and  collection 
agencies  in  St.  Louis,  manifesting  a  flattering  zeal  to  befriend  and 
assist  them  in  their  trouble.  These  new-found  friends  apprised  them 
that  their  bank  was  under  a  fraud  order  and  that  a  receiver  had  been 
appointed.  The  writers  proclaimed  a  willingness  to  represent  them 
and  "protect  their  interests."  Later,  additional  circulars  were  thrust 
upon  them.  One  receiver  was  out.  Another  was  in.  Stockholders 
were  said  to  be  threatening  further  proceedings.  This  remedy, 
that,  and  the  other,  were  suggested.  One  concern  bolder  or  more 
unscrupulous  than  the  rest,  offered  to  purchase  bank  stock  at  twen- 
ty-five cents  on  the  dollar.  Many  recipients  of  tliese  letters  were 
totally  unacquainted  with  business  procedure.  The  disquieting  ef- 
fect upon  them  of  such  communications  can  easily  be  imagined.  Not- 
withstanding the  operation  of  the  fraud  order,  a  large  number  of 
these  circulars  found  their  way  into  Lewis'  possession.  Some  idea 
of  their  nature  may  be  gleaned  from  specimens  preserved  in  his 
private  vault.  Just  two  days  after  Receiver  Spencer  was  installed, 
a  brief  typewritten  or  process  letter,  with  typewritten  or  printed 
signature,  was  sent  out  upon  the  letter-head  of  T.  H.  Forester  & 
Company,  dealers  in  bonds  and  stock  and  investment  securities,  1111 
Missouri  Trust  Building,  St.  Louis,  Mo.     It  is  as  follows: 

Are  you  a  stockholder  in  the  People's  United  States  Bank  of  this  city? 
If  so,  it  will  interest  you  to  know  that  a  fraud  order  has  been  issued  against 
that  bank  and  a  receiver  appointed  by  the  court.  If  you  desire  to  make 
sure  of  getting  back  a  portion  of  your  money,  without  waiting  indefinitely 
for  the  receiver  to  settle  up  the  business  and  taking  chances  of  losing  in  the 
end,  we  will  pay  you  twenty-five  cents  on  the  dollar  for  your  stock,  pro- 
vided it  is  accepted  promptly. 

One  recipient  of  this  letter  forwarded  his  copy  to  Theodore  F. 
Meyer,  a  director  of  the  bank,  with  the  following  comment:  "Show 
this  to  Mr.  Lewis.  I  am  no  fool."  A  bolder  or  more  nefarious  at- 
tempt to  deceive  the  unwary  could  hardly  be  imagined.  The  public 
prints  had  already  announced  that  the  bank's  cash  would  pay  the 
stockholders  about  fifty  per  cent  and  that  other  assets  would  bring 
the  total  of  at  least  seventv-five  cents  on  the  dollar. 


6U  THE  SIEGE  OF  UNIVERSITY  CITY 

A  day  later  appeared  the  elaborate  circulars  of  Hartmann,  Loe- 
weinstein  and  Steiner,  attorneys  and  counselors  at  law,  suite  310-311 
Fullerton  Building,  St.  Louis,  enclosing  a  specially  printed  power 
of  attorney  blank  and  an  "agreement  with  attorneys"  to  pay  a  fee 
of  ten  per  cent.  With  the  circular  was  enclosed  an  excerpt  from 
an  alleged  interview  printed  in  the  St.  Louis  Post-Dispatch  of  July 
10,  in  which  Secretary  of  State  Swanger  is  made  to  say,  "I  don't 
think  Lewis  is  worth  anything.  If  he  was,  he  would  have  taken  up 
those  loans  in  order  to  continue  in  business."  After  mentioning  the 
fraud  order  and  receivership,  these  attorneys  say: 

We  are  taking  steps  to  protect  the  interests  of  the  stockholders  and  de- 
positors. *  *  *  If  you  desire  us  to  represent  you,  fill  in  and  send  us  by 
return  mail  the  enclosed  power  of  attorney.  To  cover  postage  and  mailing 
expenses  in  keeping  you  informed,  send  one  dollar.  *  *  *  We  have  just 
learned  that  the  depositors  will  be  paid  in  full  on  demand.  We  will  make 
the  tlemand  for  you  as  soon  as  we  receive  the  power  of  attorney  from  you, 
without  charge,  except  the  money  order  or  exchange  charges  in  sending  your 
money  back. 

Thomas  J.  Fagin  &  Co.,  law  and  collection  office,  member  of  the 
Attorneys'  National  Clearing  House,  Rooms  704  and  705  Oriel 
Building,  Sixth  and  Locust  streets,  St.  Louis,  took  part  in  the  game, 
by  sending  out  printed  circulars  dated  July  25.  They  open  with 
the  bold  assertion:  "You  appear  as  a  stockholder  on  the  books  of 
the  People's  United  States  Bank,"  but  they  do  not  state  how  they 
secured  this  information.  After  rehearsing  the  facts  as  to  the  fraud 
order  and  receivership  proceedings,  the  circular  proceeds: 

It  is  generally  believed  that  the  bank  will  be  compelled  to  liquidate.  It 
will  be  practically  impossible  for  it  to  carry  on  its  business  while  denied  the 
use  of  the  United  States  mails.  The  amount  stockholders  will  receive  has 
been  estimated  at  from  fifty  to  seventy-five  per  cent.  This  is  highly  prob- 
lematical. It  will  depend  on  the  litigation  which  may  ensue,  the  efficiency 
with  which  the  assets  are  handled  and  the  value  of  the  securities  that  Mr. 
Lewis  has  given  for  large  loans  to  himself  and  corporations  in  which  he  is 
interested.  You  can  readily  see  that  it  will  be  necessary  for  each  stock- 
holder to  be  represented  for  the  protection  of  his  rights.  You  will  appre- 
ciate that  it  will  entail  a  relatively  small  expense,  if  a  large  number  of 
stockholders  are  represented  by  one  attorney. 

An  initial  payment  of  one  dollar  is  then  required  to  cover  the  cost 
of  postage,  correspondence  and  other  necessary  expenses  "we  may 
be  put  to."  A  collection  fee  of  ten  per  cent  is  proposed.  Numerous 
St.  Louis  institutions  of  good  standing  are  offered  as  references. 
Accompanying  this  circular  was  a  printed  power  of  attorney.  At- 
tached to  the  particular  copy  of  this  circular,  that  fell  into  the  hands 
of  H.  L.  Kramer,  vice-president  of  the  bank,  is  a  written  memoran- 
dum as  follows:  "Evidently  the  receiver  got  a  list  of  your  stock- 
holders, or  someone  in  your  office  has  copied  a  list  or  two.  I  did 
not  get  the  previous  one  sent  out  by  a  firm  of  Jew  lawyers,  so  there 
may  have  been  two  lists  taken  from  parts  of  your  filing  cases." 

The  services  of  these  lawyers  and  collection  agencies  were  not 
needed.     The  dividends  payal)le    were    determinable    only    by    the 


THE  DREYFUS  CASE  OF  AMERICA  616 

assets  in  the  hands  of  the  receiver.  They  were  distributable  directly 
to  the  investors,  under  the  orders  of  the  court.  The  intervention  of 
attorncA^s  could  have  had  but  one  result:  to  mulct  the  investors  to 
the  extent  of  the  fees  and  commissions  charged.  There  could  be 
no  possibility  of  an  adequate  return.  African  travelers  relate  that 
the  fall  of  any  large  quarry  before  their  rifles  seems  a  signal  for  a 
multitude  of  vultures  to  drop  out  of  the  distant  heavens.  A  moment 
before  the  sky  will  seem  clear,  except  perhaps  for  a  single  bird 
poised — a  mere  speck — almost  out  of  sight,  in  the  cloudless  blue. 
Once  his  telescopic  eye  picks  out  the  prey,  his  clumsy  descent  is  fol- 
lowed by  that  of  kindred  hordes  who  perceive  his  movement,  while 
circling  below  the  distant  horizon.  "Wheresoever  the  carcass  is, 
there  will  the  eagles  be  gathered  together." 

A  receivership,  in  like  manner,  is  the  signal  for  the  harpies  and 
scavengers  of  the  law  to  settle  upon  a  crippled  or  lifeless  institu- 
tion and  join  in  the  orgy  of  picking  its  bones.  The  experience  of 
the  People's  United  States  Bank,  then,  was  in  no  way  exceptional 
or  unique.  But  who  furnished  to  these  ghouls  the  addresses  which 
they  circularized?  The  only  complete  list  of  the  subscribers  to  the 
stock  of  the  bank  was  kept  in  Lewis'  counter-books.  These  had 
never  been  out  of  his  immediate  supervision,  except  when  entrusted 
to  the  postoffice  inspectors,  the  bank-examiners  (who  may  be  re- 
garded as  above  suspicion),  and  the  receiver.  No  investigation  was 
ever  made  to  definitely  settle  this  question.  Various  rumors  were 
current.  Some  of  them  find  expression  in  the  following  editorial 
from  the  St.  Louis  Censor  of  August  24,  under  the  title,  "Looting 
the  Lewis  Bank": 

The  attempts  of  the  protectors  of  the  poor,  to  get  a  good  share  of  the 
money  in  the  People's  United  States  Bank,  was  more  determined  than  at 
first  believed.  That  no  method  was  overlooked,  is  indicated  by  a  story,  part 
of  which  is  told  in  Tuesday's  Republic,  concerning  the  efforts  of  certain 
lawyers  and  collection  agencies  to  induce  stockholders  to  put  accounts  in 
their  hands. 

How  these  agencies  got  the  stockholders'  names  is  a  queer  feature  of  the 
transaction.  Did  the  first  receiver  give  them  out,  or  any  part  of  them?  If 
so,  what  was  the  inducement?  It  is  said  that  the  young  attorneys  in  his 
oflBce  stood  to  make  a  fortune  out  of  the  deal,  on  the  face  of  the  record,  had 
Mr.  Spencer  continued  in  office.  Whether  or  not  he  had  anything  to  do 
with  giving  out  the  names,  I  learn  that  these  solicitations  of  business  from 
the  collection  agencies  began  to  reach  the  stockholders  shortly  after  Spencer 
took  charge. 

Likewise,  what  has  the  postoffice  to  do  with  the  matter — the  Department 
that  issued  the  fraud  order  against  the  bank?  There  is  a  suspicion  that 
part  of  the  collection  agencies  received  the  names  through  their  means.  A 
certain  inspector  is  said  to  be  there  employed  who,  likewise  has  an  interest 
in  one  of  these  agencies.  While  the  Postoffice  Department  is  distributing 
fraud  orders,  why  not  inspect  a  few  of  its  inspectors? 

LEWIS*  FIRST  APPEAL. 

Lewis*  first  personal  letter,  authorized  by  the  board  of  directors 
and  mailed  under  the  same  cover  with  the  bank's  warning  against 
the  "syndicate  of  philanthropic  vultures    now    forming,"    was    an 


616  THE  SIEGE  OF  UNIVERSITY  CLTY 

acknowledgment  of  the   s3Mnpatliy   and  support   accorded  him.      It 
was  also  a  stirring  rally  to  arms.     Lewis  said: 

TO  THE    MANY  LOYAL  FRIENDS  WHO  ARE  STANDING  BY  ME   IN  OUH   HOUH  OF  THIAL: 

From  all  parts  of  the  Nation,  telegrams  and  letters  have  poured  in  bid- 
ding me  fight  for  our  rights,  encouraging  and  cheering  me.  Many  oflfer 
assistance.  In  every  imaginable  way  these  words  of  confidence  and  support 
have  reached  me.  Even  my  employees,  numbering  nearly  a  thousand,  have 
ofifered  to  assist  in  the  fight.  As  long  as  I  draw  breath,  I  shall  fight  those 
who  have  attempted  to  destroy  our  bank.  I  shall  carry  this  matter  to  the 
highest  courts  and  endeavor  to  drag  from  cover  those  who  are  behind  the 
conspiracy.  The  People's  Bank  shall  not  be  destroyed.  To  every  sub- 
scriber to  the  stock  who  stands  by  me  in  this  dark  hour,  I  will  pledge  that 
lie  shall  not  lose  one  penny.  I  will  pay  back  his  investment,  dollar  for  dol- 
lar. 1  organized  and  am  responsible  for  the  organization  of  this  bank.  If 
freed  from  outside  interference,  I  will  make  it  a  success. 

If  you  trust  me,  and  will  assist  me  in  this  struggle,  we  can  win.  If 
Tou  are  willing  that  I  shall  have  a  free  hand,  give  me  the  power,  so  that 
if  the  worst  comes,  I  can  take  such  steps  as  are  necessary  to  defy  our 
enemies.  Endorse  your  name  on  the  back  of  your  stock  certificate  if  you 
have  receh'ed  it,  or  on  the  back  of  your  receipt.  Also  sign  the  enclosed 
blank.  Send  both  certificate  and  blank  to  me  by  express,  at  once.  I  will 
return  to  you  my  acknowledgment,  and  receipt.  I  will  devote  every  dollar 
of  my  income  aside  from  necessary  living  expenses,  to  paying  you  in  full 
every  dollar  you  have  invested  in  the  bank.  Will  you  stand  by  me?  If  so, 
act  at  once. 

The  loyalty  of  the  stockholders  and  their  confidence  in  Lewis  and 
the  bank  could  not  be  accounted  for  by  even  the  St.  Louis  news- 
papers, much  less  the  general  outside  press.  An  interesting  side- 
light touching  the  sentiment  among  Lewis'  followers,  may  be  found 
in  an  editorial  of  the  Kearney,  Neb.,  Democrat  of  Thursday,  August 
17.     The  following  is  quoted: 

Two  weeks  ago  the  Democrat  had  something  to  say  about  the  St.  Louis 
mail  order  bank.  «  *  *  'Po  our  surprise  last  Saturday,  one  of  the  well- 
to-do  farmers  of  Buffalo  county  called  to  say  that  our  views  about  the  Peo- 
ple's Bank  at  St.  Louis  were  not  correct.  He  was  a  stockholder  and  de- 
positor.   He  knew  that  the  bank  was  a  safe  and  sound  concern. 

We  no  longer  wonder  that  mail  order  houses  and  mail  order  banks  find 
it  easy  to  accumulate  millions.  Here  we  stood,  facing  an  old  hard-handed, 
hard-headed  pioneer  who  had  dug  a  moderate  fortune  out  of  the  sterile 
soil  of  Buffalo  county,  by  struggle  and  privations  extending  over  a  quarter 
of  a  century.  Yet  he  was  abounding  in  unquestioned  faith  in  an  institu- 
tion which  had  been  branded  a  fraud  by  the  Government.  He  refused 
utterly  to  have  his  faith  shaken.  He  contended  that  he  knew  more  about 
this  matter  than  the  Government.  We  are  now  ready  to  believe  that  a 
sucker  is  born  every  minute  and  that  many  of  them  live  a  long  time. 

Accompanying  Lewis'  first  personal  letter,  was  a  blank  containing 
the  first  tentative  proposal  of  his  refunding  operations.  He  offered, 
in  exchange  for  an  assignment  of  the  bank  stock  simply  his  interest- 
bearing  receipt  for  the  face  value  of  the  stockholder's  investment. 
With  this  blank  was  sent  the  following  form  of  protest  to  be  signed 
and  returned  by  the  investor: 

I  protest  against  the  attacks  made  upon  said  bank  and  its  president, 
E.  G.  Lewis,  and  the  methods  employed  in  such  attack,  as  a  violation  of 
the  rights  of  American  citizens.  I  extend  to  said  Lewis  my  hearty  sym- 
pathy, support  and   confidence.     I   protest   against   the  unwarranted   and 


Lczvis  Pitblishing  Ci'/):/'u'j; v'j  ncwsfafcr  ['lant.  Woman's  Xationnl  Dciily  Building. 
Installed  l(/0<} 

Wiio-deceptc  Goss  Printing  Ptcss,  "The  Lewis,"  the  largest  piece  of  printing  ma- 
chinery in  the  world,  showing  paper  magacines  fully  loaded  and  method  of  handling 
paper  by   electric  crane     ^Stereotyping  Department 


^Mailing  room  of  the  Woman's  National  Daily  in  the  cast  end  of  the  great  hxpostyla 
hall  of  the  Egyptian  Building 

-Subscription  room   of  the  Magazine  Press  Building,  occupied   hx   employes   handling 
the   magazine   stihscription    business   of   the   American    Woman's   League 


THE  DREYFUS  CASE  OF  AMERICA  519 

uncalled-for  interference  on  the  part  of  the  Postoffice  Department  and 
secretary  of  state  with  the  affairs  of  said  bank,  without  opportunity  being 
given  to  its  stockholders  to  be  heard,  as  an  outrage. 

Under  the  circumstances  this  was  a  most  remarkable  appeal. 
Lewis  and  the  bank  had  been  branded  "fraudulent"  by  a  Cabinet 
officer  at  the  head  of  perhaps  the  greatest  Department  of  Govern- 
ment. His  condemnation  had  the  apparent  approval  of  the  Admin- 
istration. The  press,  with  hardly  a  dissenting  voice,  concurred.  The 
public  authorities  of  his  own  State  denounced  him.  Notwithstand- 
ing all  this,  he  unhesitatingly  relied  upon  the  good-will  of  his  sub- 
scribers. He  invited  their  continued  confidence  and  support.  He 
asked  them  to  again  entrust  to  him  their  savings  without  other 
security  than  his  unsupported  word.  Now  comes  perhaps  the  most 
remarkable  event  in  this  entire  chronicle.  The  response  to  this 
appeal  was  unbelievably  great.  Lewis'  enemies  never  have  been 
able  to  account  for  it,  upon  any  other  theory  than  that  of  the  Ne- 
braska editor,  that  "a  sucker  is  born  every  minute  and  that  many 
of  them  live  a  long  while."  His  friends  aver  that  this  theory  is 
totally  inadequate  to  account  for  the  continued  confidence  of  Lewis' 
supporters  and  that  it  does  not  square  with  the  facts.  A  very  con- 
siderable proportion  of  the  stock  which  was  turned  over  to  Lewis 
at  this  time,  was  held  by  reputable  and  substantial  business  men. 
They  had  subscribed  because  of  their  faith  in  Lewis  and  the  belief 
in  the  earning  power  of  a  mail  order  bank.  Probably  a  majority 
of  those  accepting  his  first  receipt  were  highly  wrought  up  by  what 
they  felt  to  be  the  injustice  of  the  attacks  of  the  allies.  Many 
expressed  themselves  as  willing,  if  need  be,  to  make  a  donation  of 
the  amount  of  their  investments  to  carry  on  the  fight.  Numerous 
letters,  voicing  this  sentiment,  were  received  by  Lewis  in  response 
to  his  appeal.  Lewis'  own  version  of  the  support  which  he  received 
at  this  time  is  that  he  was  making  a  fight  for  principle  and  that 
his  followers,  recognizing  that  fact,  placed  their  investments  in  his 
hands  as  evidence  of  their  approval  of  what  was  being  done. 

The  stockholders  were  forced  to  adopt  many  ingenious  expe- 
dients to  communicate  with  Lewis.  A  majority  sent  in  their  cer- 
tificates as  requested,  by  express.  Others  enclosed  them  in  covers 
addressed  to  bankers,  merchants  or  personal  friends  and  acquaint- 
ances in  St.  Louis.  The  appearance  of  the  name  of  a  St.  Louisan 
in  any  of  Lewis'  literature  or  publications  was  the  signal  for  the 
receipt  by  him  of  a  volume  of  correspondence  for  delivery  to  Lewis. 
Many  telegraphed,  asking  for  instructions.  Some  proper  agency 
was  evidently  needed  as  a  clearing-house,  through  which  the  ex- 
change of  correspondence  could  be  effected. 

KRAMER   TAKES  THE    INITIATIVE. 

The  first  steps  in  this  direction  were  taken,  almost  immediately 
after  the  fraud  order  was  promulgated,  at  a  called  meeting  of  the 
stockholders  of  the  Lewis  Publishing  Company,  on  July  13.  This 
was  held  behind  closed  doors.     The  object  was  to  consider  the  pre- 


520  THE  SIEGE  OF  UNIVERSITY  CITY 

carious  position  of  that  concern,  due  to  the  destruction  of  the  bank. 
H.  L,  Kramer,  Lewis'  staunch  friend  and  associate  since  the  days 
of  the  Mail  Order  Publishing  Company,  came  to  St.  Louis  from 
bis  home  at  Attica,  Ind.,  expressly  to  attend  this  conference.  What 
took  place  evidently  set  the  mind  of  Mr.  Kramer  at  work.  The 
plan,  which  was  finally  adopted,  appears  to  have  been  first  out- 
lined by  him  in  a  letter  which  he  dictated  to  Mr,  Coyle  on  July  14, 
1905,  immediately  upon  returning  home  from  this  conference.  The 
substance  of  this  important  document  is  as  follows: 

I  arrived  home  bright  and  early  at  6:00  a.  m.,  and,  agreeable  to  promise, 
am  now  writing  you  regarding  a  plan  to  conserve  and  protect  the  inter- 
ests of  the  People's  United  States  Bank  and  the  Lewis  Publishing  Company. 
I  think  Lewis  has  a  long  drawn-out  legal  fight  ahead  of  him,  to  re-estab- 
lish his  position  in  connection  with  the  bank's  affairs.  Unless  proper  steps 
are  taken,  his  properties  may  be  driven  out  of  existence  or  wasted  from 
loss  of  time,  interference  with  his  business,  and  the  great  expense  of  liti- 
gation. The  winding  up  of  the  bank  will  be  a  great  disappointment  to 
Lewis,  and  a  blow  to  his  pride;  but  I  am  firmly  of  opinion  that  unless 
prompt  and  active  measures  are  taken,  not  only  will  the  bank  be  wound  up 
by  the  receiver,  but  his  other  business  interests  will  become  so  terribly  and 
quickly  involved  that  he  will  lose  every  dollar  of  his  property.  My  idea  is 
this:  The  Lewis  Publishing  Company,  owners  and  operators  of  the  Wom- 
an's Magazine  and  the  Woman's  Farm  Journal,  is  a  growing  concern.  The 
gross  income  last  year  amounted  to  nearly  eight  hundred  thousand  dollars. 
This  year  ought  certainly  to  be  as  good.  Proper  management,  with  suflScient 
push  and  energy,  ought  to  increase  their  gross  income  to  nine  hundred 
thousand  dollars.  The  report  submitted  at  yesterday's  stockholders'  meet- 
ing showed  net  earnings  for  February,  March  and  April,  of  sixty  thousand 
dollars,  or  at  the  rate  of  two  hundred  thousand  dollars  a  year.  A  reduction 
of  expenses  was  shown,  which  represents  an  additional  saving  of  sixty 
thousand  dollars.  Thus,  without  an  increase  of  business,  the  net  income 
would  be  three  hundred  thousand  dollars  a  year.  I  think  it  is  perfectly 
safe  to  say  the  Lewis  Publishing  Company  will  earn  two  hundred  and  forty 
thousand  dollars.  This  is  six  per  cent  on  four  million  dollars.  The  increase 
of  the  preferred  stock  of  the  Lewis  Publishing  Company  to  that  amount, 
would  afford  a  basis  for  the  reorganization  of  the  People's  United  States 
Bank.  Every  stockholder  can  be  protected,  so  that  he  can  eventually  get 
every  dollar  of  his  money  paid  back  to  him.  Mr.  Lewis'  other  enterprises 
can  be  conserved  and  financed  and  he  can  be  given  an  opportunity  to  work 
them  out  successfully. 

The  Lewis  Publishing  Company  will  thus  take  over  the  stock  of  the  Peo- 
ple's United  States  Bank  and  co-operate  in  winding  up  its  affairs.  Plenty 
of  time  will  be  afforded  to  realize  the  very  best  results  from  the  principal 
assets  of  the  bank,  namely,  the  land  owned  by  the  University  Heights  Com- 
pany, and  the  property  of  the  Lewis  Publishing  Company.  Both  of  these 
arc  now  practically  owned  by  the  bank.  Opportunity  will  be  given  to  realize 
upon  them,  under  the  best  kind  of  careful,  conservative  management.  Mean- 
time, the  affairs  of  the  bank  can  be  wound  up  by  the  directors.  Those  who 
wish  to  have  their  stock  redeemed  in  cash,  can  make  application  and  the 
allotment  can  be  made  in  the  regular  way  provided  for  such  transactions. 

If  the  worst  should  happen  and  the  receiver  be  sustained  by  the  courts 
and  wind  up  the  property,  the  Lewis  Publishing  Company  would  receive 
from  the  stockholders  of  the  bank  a  million  to  a  million  and  a  half  dollars, 
or  a  majority  of  the  stock  of  the  bank.  This  would  be  sufl5cient  to  put  the 
committee  in  full  control. 


THE  DREYFUS  CASE  OF  AMERICA  621 

The  initiative  thus  taken  by  Mr.  Kramer,  a  man  of  substantial 
wealth  and  extensive  business  experience,  was  v/elcomed  by  the 
board.  The  proposed  solution  of  Lewis'  complex  problems  seemed 
feasible,  and  after  various  modifications,  the  general  plan  was 
adopted.  A  protective  committee  was  not  deemed  necessary  and 
was  never  formally  organized.  Experience  indicated  that  the  work 
could  be  more  advantageously  divided  among  the  various  members 
of  the  board.  The  announcement  was  made,  in  due  course,  of  a 
meeting  of  the  stockholders  of  the  Lewis  Publishing  Company,  to 
be  held  on  October  24,  for  the  purpose  of  increasing  its  capital 
stock.  The  project  was  explained  by  letter  to  the  preferred  stock- 
holders. Those  who  objected  to  the  plan  were  requested  to  name 
the  price  at  which  they  would  sell  their  stock.  Meantime,  investors 
continued  to  send  in  their  stock  in  exchange  for  Lewis'  interest- 
bearing  receipts  on  his  agreement  to  repay  the  face  value  of  their 
investment  out  of  his  earnings,  with  interest  at  five  per  cent  per 
annum.  Mr.  Kramer  consented,  in  order  that  this  arrangement 
might  be  put  in  proper  legal  form,  to  act  in  behalf  of  the  stock- 
holders as  trustee.  A  trust  agreement  to  this  effect  was  entered 
into  as  of  the  first  day  of  September.  Shortly  thereafter,  an  ar- 
rangement was  made  with  the  Missouri-Lincoln  Trust  Company  to 
act  as  transfer  agent. 

While  these  affairs  were  in  progress  of  adjustment,  the  statements 
and  appeals  to  the  stockholders  for  their  support,  suggested  by 
Mr.  Kramer,  took  the  form  of  a  series  of  some  half-dozen  circular 
letters,  issued  over  Lewis'  own  signature.  His  custom  of  taking 
the  world  absolutely  into  his  confidence  makes  it  possible,  through 
these  documents  and  his  editorials  in  the  Woman's  Magazine,  to 
trace  in  detail  the  evolution  of  his  refunding  operations.  These 
circulars,  in  fact,  comprise  a  fairly  complete  history  of  the  bank's 
affairs  as  viewed  by  Lewis  at  that  time.  The  application  of  the 
attorney-general  of  ^Missouri  for  a  second  receivership,  prompted 
the  second  of  these  circulars,  issued  during  the  early  part  of  Au- 
gust. In  style,  it  is  characteristic  of  the  promotion  literature  of 
the  bank.  A  large  sheet,  twenty  inches  long  by  thirteen  inches  deep, 
was  covered  on  one  side  with  photographs  showing  a  panorama  of 
the  University  Heights  property,  the  Woman's  Magazine  Build- 
ing, many  houses  in  process  of  construction,  and  other  improve- 
ments. On  the  opposite  side  was  a  printed  two-page  letter,  breath- 
ing defiance  against  the  authors  of  both  the  fraud  order  and  the 
receivership  proceedings.  The  following  brief  extracts  will  suffi- 
ciently illustrate  the  style  of  Lewis'  exhortation: 

This  bank,  now  under  attack  by  its  enemies,  (some  misguided,  others 
impelled  by  the  deepest  malice)  presents  a  spectacle  which  causes  every 
thoughtful  citizen  to  wonder  whether  our  liberties  are  departing,  and  if  we 
are  still  a  free  people.  Tiie  People's  United  States  Bank  has  been 
pronounced,  by  an  edict  of  an  official  in  Washington,  to  be  unworthy  to  en- 
joy the  "privilege"  of  the  United  Stfites  mails,  which  even  a  condemned 
felon  may  enjoy.    Our  mailing  "privilege"  has  been  cut  off,  without  giving 


622  THE  SIEGE  OF  UNIVERSITY  CITY 

us  or  our  attorneys  an  opportunity  of  examining  the  evidence  upon  which 
the  action  was  taken.  We  are  using  every  means  possible,  to  have  the  fraud 
order  reviewed  by  the  highest  courts.  We  are  met  by  the  claim  made  on 
behalf  of  the  secret  police-inspector  system  that  no  American  citizen  has 
any  right  to  use  the  mail.  His  "privilege"  is  a  matter  of  grace.  Such 
concessions  kings  formerly  made  to  favored  subjects.  They  tell  us  no  con- 
stitutional rigiit  of  an  American  is  violated  if  he  is  deprived  of  that  "privi- 
lege," without  trial  or  hearing.  To  this  pass  have  we  come,  oh,  Americans, 
in  this  Twentieth  Century! 

Powerful  influences  are  behind  these  attacks.  Methods,  never  before 
used  in  our  free  country,  are  being  employed.  There  is  one  way  in  which 
they  can  be  defeated  and  our  bank  restored,  and  made  stronger  than  ever, 
safe  from  furtlier  assault.  If  you,  the  stockholders,  in  whom  I  have  trusted 
even  more  than  you  have  trusted  me,  will  now  stand  by  me  and  show  once 
more  your  confidence  and  trust,  by  placing  your  stock  in  my  hands,  I  can 
rout  end  destroy  our  enemies  by  turning  their  own  weapons  against  them. 

Then  followed  a  receipt  of  similar  import  to  that  previously  men- 
tioned, except  for  this  addition: 

Said  pledge  is  to  be  secured  by  a  trust  agreement,  wherein  Major  H.  L. 
Kramer,  of  Kramer,  Ind.,  a  stockholder  and  vice-president  of  said  bank, 
is  to  be  trustee.  Said  agreement  shall  make  the  holder  hereof  one  of  the 
beneficiaries,  upon  surrender  of  this  preliminary  receipt  and  acceptance  of 
a  formal  trust  certificate. 

It  is  further  announced  that  in  case  of  re-establishment  of  the 
business  of  the  bank,  or  any  similar  institution,  within  one  year, 
the  receipt-holders  mnj  exchange  their  receipts  for  the  stock  of 
such  institution.  Notice  is  then  given  that  the  express  companies 
are  not  allowed  to  carry  letters  unless  stamped  with  postage. 
Hence,  the  following  instructions  were  enclosed: 

Put  your  certificate  and  papers  in  a  sealed  envelope  or  package  and 
mark  "valuable  papers"  when  you  send  them  to  me  by  express.  I  desire 
to  avoid  any  appearance  of  attempting  to  evade  the  so-called  mail  "fraud 
order,"  while  it  is  in  force,  and  request  that  no  letters  relating  to  the  bank 
be  mailed  to  me  in  care  of  the  Woman's  Magazine.  This  will  obviate  any 
pretext  to  interfere  with  the  mail  of  the  magazine.  Do  not  make  postoffice 
money  orders  payable  to  me.  I  am  not  permitted  to  cash  them.  Send  by 
express  order  any  funds  to  be  remitted.  If  any  express  agent  refuses  to 
take  papers  addressed  to  me,  wire  me  his  name  and  the  name  of  his  com- 
pany. 

THE  EXPRESS  FRAUD  ORDER. 

The  occasion  of  this  last  request  was  the  promulgation  of  a 
sympathetic  express  fraud  order,  or  embargo,  placed  on  Lewis  and 
the  bank  by  the  principal  express  companies  of  the  country.  Copies 
of  Lewis'  first  personal  letter,  bearing  as  a  postscri])t  this  sentence, 
"Send  by  express,  care  Woman's  Magazine  Building,  St.  Louis, 
Mo.,"  undoubtedly  were  brought  to  the  attention  of  the  postoffice 
authorities.  Steps  were  immediately  taken  to  frustrate  what  was 
construed  to  be  an  avoidance  of  the  fraud  order.  Who  took  the 
initiative  in  this  matter  is  not  definitely  known.  Presumably  the 
postmaster-general  or  one  of  his  aids  took  up  the  matter  with  Sen- 
ator Piatt  or  one  of  his  associates.  However  this  may  have  been, 
the  principal  express  companies  constituting  the  so-called  "express 
trust/'  instructed  their  local  agents  to  refuse  to  accept  this  busi- 


THE  DREYFUS  CASE  OF  AMERICA  523 

ness.  Some  agents,  it  appears,  either  failed  to  receive  these  in- 
structions, or  overlooked  or  ignored  them.  A  considerable  number 
of  packages  came  through.  But  complaint  was  made  to  Lewis, 
from  all  parts  of  the  country,  of  the  refusal  of  express  agents  to 
accept  packages  addressed  to  E.  G.  Lewis  or  the  People's  United 
States  Bank.  The  Adams,  American,  United  States,  Pacific  and 
Southern  Express  Companies  were  specifically  mentioned.  Some 
agents  also  refused  to  sell  express  money  orders  payable  to  E.  G. 
Lewis  or  the  bank.  In  a  few  cases,  the  embargo  was  extended  to 
the  Development  and  Investment  Company.  The  first  complaints 
of  this  kind  reached  Lewis  shortly  after  his  personal  letter  of  July 
]7,  was  mailed.  Hence,  tlie  instructions  given  in  his  second  letter, 
of  August  5,  to  notify  him  by  wire  of  any  such  difficulty. 

The  case  of  Allie  Wardwell  of  Marion,  Ind.,  illuminates  the  dif- 
ficulties against  which  Lewis  was  contending.  On  August  16,  she 
telegraphed  that  express  agents,  both  at  Converse  and  at  Marion, 
Indiana,  had  refused  to  accept  her  securities  for  transmission  to 
Lewis.  The  agent  at  Converse  said:  "We  have  orders  to  let  no 
packages  go  out  to  that  man."  She  then  endeavored  to  purchase  a 
mone}'  order  from  the  Adams  Express  agent  at  ISIarion,  but  was 
refused.  The  substance  of  her  statement,  drawn  up  in  the  form 
of  an  affidavit  by  the  bank's  attorneys,  was  afterwards  subscribed 
to,  by  her,  before  a  notary.  She  states  that  she  endeavored  to  buy 
an  express  money  order  from  the  agent  of  the  Adams  Express  Com- 
pany, but  that  he  refused  to  issue  it,  using,  as  nearly  as  she  could 
recall,  the  following  words:  "I  cannot  give  you  a  money  order 
to  that  man.  The  fraud  order  has  not  been  lifted,  or  if  it  has,  the 
express  companies  haven't  yet  been  notified." 

A  selection  of  typical  cases,  still  preserved  in  Lewis'  private 
vault,  selected  from  among  the  hundreds  of  complaints  received 
at  that  time,  shows  that  this  express  fraud  order  was  in  force  in 
at  least  twelve  states,  teritories,  and  provinces  distributed  as  widely 
as  Connecticut,  Georgia,  Ontario,  and  the  Indian  Territory.  A  cor- 
respondent at  Meridian,  Conn.,  desiring  to  transmit  his  certificates, 
was  refused  by  the  local  manager,  Charles  Morgan.  "When  Mr. 
Morgan  read  the  address,"  says  the  writer  of  this  letter,  "he  told 
me  they  could  not  pass  a  letter  addressed  to  that  man's  name.  They 
had  official  orders  to  the  contrary." 

Some  agents  excused  their  action  by  referring  to  the  law  which 
forbids  express  companies  to  handle  letters  unless  contained  in 
stamped  Government  envelopes,  showing  that  postage  has  been 
prepaid.  The  express  agent  at  Lacuta,  Mich.,  however,  refused  to 
accept  an  envelope  thus  stamped.  A  package  of  certificates  deliv- 
ered to  the  tfnited  States  Express  office  at  Tiffin,  Ohio,  was  returned 
to  the  sender  with  the  following  memorandum,  signed  by  C.  A. 
Barton,  agent:  "Can't  handle  this  kind  of  business  by  United 
States  Express.     Orders  not  to  handle  anything  for  this  firm  by 


52t  THE  SIEGE  OF  UNIVERSITY  CITY 

express  as  it's   same  as ."     What  the   People's   United   States 

Bank  was  similar  to,  is  left  by  this  agent  to  the  imagination.  The 
orders  received  by  various  local  agents  were  described  as  coming 
from  route  agents  and  division  superintendents,  indicating  that  they 
originally  were  issued  from  headquarters.  These  complaints  were 
reported  simultaneously  from  all  parts  of  the  countrj\  They  indi- 
cate clearly  a  still  further  extension  of  Fulton's  program  of  "con- 
certed action." 

ORIGIN  OP  THE  WOMAN's  NATIONAL  DAILY. 

The  appointment  of  the  second  receiver,  on  August  16,  was  the 
signal  for  the  full  disclosure  of  a  project  which  appears  to  have 
sprung,  full  fledged  in  Lewis'  mind,  under  pressure  of  the  continu- 
ous assaults  upon  him.  To  employ  his  own  phrase,  the  opening  of 
the  siege  had  found  him  equipped  with  muzzle-loading  rifles,  namely, 
monthly  magazines.  He  now  planned  to  etliuip  himself  with  a  Gat- 
ling-gun.  He  proposed  to  organize  a  daily  newspaper  of  national 
circulation.  The  determination  to  do  this,  and  the  way  in  which 
it  was  financed  and  accomplished  are  all  characteristic  of  the  genius 
of  a  great  general.  The  project  was  launched  at  this  time,  as  a 
basis  of  the  proposed  increase  of  the  Lewis  Publishing  Company's 
capitalization.  His  third  circular,  of  August  24,  opened  with  a  com- 
plete summary  of  the  history  of  the  bank.  The  various  assaults 
upon  it  were  panoramically  reviewed.  The  conclusion  was  ex- 
pressed that  before  the  bank  could  be  reorganized  or  a  postal  bank 
bill  passed  by  Congress,  a  great  campaign  of  education  must  be 
waged.  After  outlining,  briefly,  his  proposed  editorial  policy,  Lewis 
says: 

There  is  but  one  thing  this  band  of  freebooters  fears.  That  is  publicity. 
I  propose  to  produce  and  sell,  for  one  dollar  a  year,  a  daily  newspaper  simi- 
lar to  those  now  produced  for  three  dollars  or  five  dollars  per  year.  This 
I  will  deliver  daily  in  three  million  American  homes.  I  propose,  further- 
more, to  make  it  a  woman's  newspaper.  It  will  not  be  owned  or  controlled 
by  Wall  Street  or  by  the  trusts.  It  will  be  fearless  and  independent,  a  voice 
of  the  people,  which  no  man  or  power  can  bribe  or  influence.  It  will  be 
the  people's  paper. 

First  let  me  state,  for  the  benefit  of  the  postoffice  inspectors'  system  that, 
while  the  plans  I  here  outline  are  such  as  I  intend  to  carry  out,  alterations 
and  changes,  such  as  the  working  out  and  development  of  the  enterprise 
may  require,  will  be  made.  Any  one  but  an  "inspector"  would  know  this. 
Any  enterprise  but  one  intended  for  the  common  people  would  be  per- 
mitted to  do  this  unquestioned.  But  a  great  network  of  spies  and  inspectors 
are  watching  day  and  night  to  get  some  hold  that  may  be  made  to  appear 
to  justify  their  previous  acts. 

After  commenting  at  length  upon  the  strength  and  profit-earning 
capacity  of  the  Lewis  Publishing  Company  and  the  fact  that  it  has 
always  been  a  close  corporation,  Lewis  continues: 

Until  now  I  have  been  unable  to  give  you  the  details  of  my  plans.  To 
have  made  them  public  would  have  courted  defeat.  We  still  hoped  to  secure 
an  injunction  to  restrain  the  operation  of  the  fraud  order.  Thousands  of 
you  have  sent  me  your  stock  and  have  accepted  my  five  per  cent  notes. 
Thousands  more  are  ready  to  do  so,  when  more  definite  information  of  my 


THE  DREYFUS  CASE  OF  AMERICA  625 

plans  is  given.  I  now  propose  to  reorganize  the  Lewis  Publishing  Com- 
pany. The  plan  is  to  increase  its  capital  stock  and  issue  to  each  stock- 
holder in  the  bank  an  equal  amount  of  preferred  stock  in  the  Lewis 
Publishing  Company.  This  will  receive  the  net  profits  of  the  Lewis 
Publishing  Company  up  to  six  per  cent  per  annum,  before  the  common 
stock,  which  is  held  by  my  associates  and  myself,  receives  anything.  It 
will  also  share  equally  with  the  common  stock  in  the  profits  over  and  above 
six  per  cent.  It  will  take  preference  over  the  common  stock  in  all  the  assets 
of  the  company,  including  building,  plant,  machinery  and  publications. 
The  new  Woman's  National  Daily  newspaper  will  be  the  property  of  the 
Lewis  Publishing  Company. 

The  proposal  is  then  made  to  add  the  four  directors  of  the  bank, 
Messrs.  Stephens,  Carter,  Meyer,  and  Coyle,  to  the  directorate  of 
the  Lewis  Publishing  Company.  Holders  of  Lewis'  preliminary  re- 
ceipts are  given  opportunity  to  exchange  them  for  the  Lewis  Pub- 
lishing Company  preferred  stock.  Those  who  join  in  the  plan  are 
exhorted  to  co-operate  with  Lewis'  to  the  extent  of  procuring  at  least 
ten  subscriptions  each  to  the  proposed  newspaper. 

THE  FIVE  PER  CENT  TRUSTEE  NOTES. 

The  formalities  in  the  matter  of  the  Lewis  Publishing  Company's 
preferred  stock  having  been  arranged,  the  matter  of  the  proposed 
trustee  notes  was  next  taken  up.  On  the  first  of  September,  a  trust 
agreement  between  Lewis  and  H.  L.  Kramer,  as  trustee,  was  exe- 
cuted. The  intent  of  Lewis  is  set  forth  to  issue  certain  trustee 
notes  to  persons  who  have  made  investment  in  the  People's  Bank 
either  as  contributions  on  stock  or  deposits,  and  who  wish  to  accept, 
instead,  the  personal  obligations  of  Lewis;  also  his  further  intent  to 
pledge  certain  income  to  pay  said  notes  with  interest.  Lewis'  pledge 
is  recited  as  consisting  of  all  net  profits,  dividends  and  earnings  of 
his  stock  in  the  Lewis  Publishing  Company,  University  Heights 
Company,  Development  and  Investment  Company,  income  from  all 
mortgages  and  loans  and  all  other  income.  All  are  placed  in  trust 
to  pay  each  and  all  of  the  trustee  notes.  Default  of  payment  is 
made  to  give  the  trustee  power,  upon  written  request  of  one-third  in 
number  and  value  of  the  holders,  to  seize  Lewis'  income  and  apply  it 
to  the  terms  of  the  trust.  The  expenses  of  the  trust  are  charged 
upon  the  income,  including  compensation  to  the  trustee  for  his  or  his 
agents'  services.  Lewis  undertakes  to  furnish  the  trustee  with  the 
names  and  addresses  of  the  note  holders. 

Immediately  following  this,  an  arrangement  was  entered  into  with 
the  Missouri-Lincoln  Trust  Company  to  act  as  transfer  agent  in 
the  exchange  of  the  evidences  of  indebtedness  of  the  bank  for  both 
the  Lewis  Publishing  Company  preferred  stock  and  Lewis'  trustee 
notes.  The  arrangement  was  thus  announced  by  Lewis  in  a  circular 
letter  dated  September  6: 

Those  who  have  sent  in  stock  certificates,  original  receipts  or  pass  cards 
and  received  my  "preliminary  receipt,"  and  who  now  desire  to  exchange 
them  for  the  six  per  cent  preferred  stock  of  the  Lewis  Publishing  Company, 
are  asked  to  endorse  the  preliminary  receipt  on  the  hack  and  forward  it 
to  the  Missouri-Lincoln  Trust  Company,  St.  Louis.    This  company  is  acting 


526  THE  SIEGE  OF  UNIVERSITY  CITY 

simply  as  trustee  or  transfer  agent  in  this  matter.  It  cannot  undertake 
either  to  answer  long  letters  or  give  advice.  Those  who  failed  to  receive 
their  bank  stock  certificates,  or  whose  receipts,  pass  cards  or  records  have 
become  lost,  owing  to  the  fraud  order,  are  directed  to  fill  in  the  enclosed 
blanks,  stating  the  amount  of  their  investment,  and  to  forv/ard  them  to 
the  Missouri-Lincoln  Trust  Company.  Ther  are  advised  that  the  matter 
will  at  once  be  looked  up  and  proper  credit  given. 

The  blanks  mentioned  consisted  of  assignments  to  Lewis  in  con- 
sideration of  his  trustee  notes,  or  preferred  stock  of  the  Lewis  Pub- 
lishing Company,  respectively. 

This  letter  consists  of  two  printed  pages  surmounted  by  the  let- 
ter-head of  the  People's   United  States  Bank.     Lewis  said  (in  part)  : 

Dear  Friend:  This  is  the  situation:  Our  bank  has  been  struck  down 
by  a  Cabinet  officer,  jumped  on  by  a  State  officer  and  denied  the  use  of 
the  mails.  It  has  been  thrown  into  the  hands  of  a  receiver  and  rescued 
from  his  clutches.  It  was  placed  in  voluntary  liquidation  to  avoid  further 
loss,  only  to  be  thrown  into  the  hands  of  a  second  receiver.  •  *  *  j  am 
willing  to  do  all  that  any  man  can  do  and  to  put  up  everything  I  have  on 
earth  for  your  protection,  if  you  will  co-operate  with  me,  to  enable  me 
to  protect  you  from  loss.  I  am  willing  to  sacrifice  my  entire  income  until 
you  have  received  every  dollar  of  your  investment,  with  interest,  or  to 
arrange  the  exchange  of  your  stock  for  that  of  the  preferred  stock  of  the 
Lewis  Publishing  Company.  In  either  event,  your  proportion  of  the  loss 
of  the  bank  falls  on  my  shoulders.     I  can  do  no  more. 

FFtAUD  ORDER  THREATENED  AGAINST  THE   MISSOURI-LINCOLN  TRUST   CO. 

The  whole  refunding  operation  was  thus  apparently  well  in  hand 
and  running  smoothly,  when  a  further  attack  was  made  by  both  the 
Federal  and  State  authorities  to  thwart  the  announced  intention  and 
desire  of  the  investors  in  the  bank  to  continue  to  entrust  their  funds 
to  Lewis'  custody.  These  events  prompted  the  last  letter  on  the 
bank's  affairs  sent  by  Lewis  to  the  investors,  before  the  storm  broke 
affecting  the  rights  of  the  Woman's  Magazine.  Then  the  battle 
shifted  from  the  affairs  of  the  bank  to  those  of  the  Lewis  Publishing 
Company.  The  events,  as  summed  up  by  Lewis  in  his  letter  under 
date  of  November  2,  were  briefly  as  follows: 

Receiver  Essen  was  first  called  to  the  inspectors'  office.  A  demand 
was  made  on  him  that  he  refuse  to  recognize  the  transfers  of  stock.  He 
declined  to  comply  with  this  demand.  Then  the  inspectors  called  upon 
the  Missouri-Lincoln  Trust  Company.  This  is  one  of  the  leading  finan- 
cial concerns  in  St.  Louis.  It  was  simply  acting  as  trustee  and  trans- 
fer agent  for  the  protection  of  the  stockholders.  Yet  the  inspectors 
deliberately  threatened  its  officers  with  a  fraud  order  against  the  Trust 
Company  unless  they  at  once  returned  all  the  evidences  of  indebtedness 
of  the  bank  to  the  senders.  An  injunction  had  to  be  secured  by  Lewis 
compelling  the  Trust  Company  to  perform  its  trust  agreement.  Next,  the 
attorney-general  of  Missouri  moved  that  the  court  compel  the  receiver 
to  disregard  assignments  of  stock  to  Lewis.  Failing  in  this,  suit  was 
brought  at  the  instance  of  the  attorney-general  to  recover  the  promotion 
expenses  from  Lewis  and  the  first  board  of  directors.  Throughout  the 
whole  campaign,  publicity  was  given  in  the  St.  Louis  Post-Dispatch  to 
every  attack  of  the  allies. 

The  full  story  of  the  battle  at  the  Missouri-Lincoln  Trust  Com- 
pany was  told  by  Lewis  at  the  hearings  of  the  Congressional  Com- 
mittee and  afterwards  corroborated  in  all  essentials  by  the  testimony 


-13  -;;   *. 


Q        S 


•SS 


1  ? 


5  "i" 


'S  «-  P  "1  -I 


THE  DREYFUS  CASE  OF  AMERICA  629 

before  them  of  Judge  M.  P.  Murray,  Jr.,  then  trust  officer  of  that 
concern.  We  will  allow  them  to  tell  this  part  of  the  story  in  their 
own  words.     Says  Lewis: 

Before  sending  out  the  circular  letter  announcing  these  three  propo- 
sitions, I  went  to  the  Missouri-Lincoln  Trust  Company,  an  established 
banking  institution,  and  proposed  that  it  act  as  trustee  and  transfer 
agent.  Its  capital  at  that  time  was,  I  believe,  $3,500,000.  It  had  some 
five  or  six  millions  of  deposits.  The  trust  was  accepted.  My  arrange- 
ment was  that  all  those  having  investments  in  the  former  bank  who  desired 
to  transfer  them,  either  to  me  for  my  personal  note  or  to  the  Lewis 
Pubhshing  Company,  might  send  their  pass  books  or  other  evidences  of 
investment  to  the  Trust  Company.  They  undertook  to  record  them,  receipt 
for  them,  and  eventually  turn  them  over  to  the  receiver  for  liquidation. 
The  money  received  was  to  be  applied  either  to  the  treasury  of  the  Lewis 
Publishing  Company  in  payment  for  its  preferred  stock,  or  to  me,  in  ex- 
change for  my  personal  notes. 

I  saw  Inspector-in-Charge  Fulton  and  showed  him  the  letter  and  blank 
I  was  about  to  send  out.  I  said:  "You  have  destroyed  this  bank.  I  am 
now  going  to  get  these  people  to  help  me  to  make  the  Lewis  Publishing 
Company  the  biggest  on  earth.  I  tell  you,  frankly,  that  I  am  going  to 
devote  the  principal  part  of  my  editorial  columns  to  lifting  the  lid  off  this 
thing  and  showing  it  up.  Now,  is  there  any  legal  objection  to  these  people 
standing  by  me  if  they  want  to?" 

He  replied  that  the  Government  was  not  concerned  what  they  did  with 
their  money,  so  long  as  they  did  it  of  their  own  accord.  Fulton  confirmed 
that  statement  to  a  Globe-Democrat  reporter  who  followed  me  into  his 
ofiBce.  In  response  to  the  announcement  sent  out,  approximately  two- 
thirds  of  the  capital  stock  and  deposit  books  were  turned  over  to  the 
Trust  Company,  with  instructions  to  transfer  them  to  the  Lewis  Publishing 
Company  or  to  myself.  I  would  say  that  ninety-five  per  cent  of  all  the 
persons  interested  joined  in  that  fight.  The  amount  represented  was  only 
about  two-thirds.  Many  transferred  part  and  kept  the  remainder  for  what 
it  would  liquidate.  About  one  hundred  thousand  dollars  additional  was 
sent  in  as  a  war  fund.  Everybody  who  contributed  received  the  same 
consideration,  stock  and  notes.    We  would  not  accept  money  any  other  way. 

I  told  them  I  was  going  to  fight.  The  investors  said  they  did  not  care 
what  I  did  with  the  money,  so  long  as  I  fought  the  thing  to  a  finish.  No 
one  had  been  allowed  to  hold  over  five  hundred  dollars'  worth  of  stock. 
The  great  bulk  of  the  money  came  from  bankers  and  substantial  business 
men.  Mr,  Lenox  Rose  of  Newark,  New  Jersey,  gathered  up  about  seven 
thousand  dollars'  worth  of  stock  from  the  bankers  of  New  Jersey  and  told 
me  to  use  it  as  I  pleased.  He  only  warned  me  not  to  "get  licked."  Edward 
Dickinson  of  Kansas  City  and  his  associates  in  the  Kansas  City,  Mexico  & 
Orient  Railroad  sent  their  stock  in  a  bunch,  with  a  notice  that  I  need  not 
even  send  back  a  receipt,  but  to  go  on  and  fight.  Quite  a  number  of  people 
took  a  hand  on  the  rope  when  we  got  started.  There  were  a  number  of 
publishers  throughout  the  country  who  sent  me  checks  ranging  from  a  few 
hundred  dollars  up  to  a  thousand.  One  Chicago  publisher,  Mr.  Currier, 
sent  me  his  check  for  one  thousand  dollars.    These  were  war  contributions. 

A   RUN    ON   THE    TRt'ST   COMPANY. 

When  it  developed  that  these  so-called  dupes  and  imbeciles  throughout 
the  United  States  were  standing  by  me,  the  attitude  of  the  postoflBce 
inspectors  changed.  They  found  I  was  going  to  have  a  war  fund,  and 
that  I  could  make  things  pretty  hot.  They  notified  the  Missouri-Lincoln 
Trust  Company  one  day  that  if,  by  six  o'clock  that  night,  the  company  did 
not  return  to  all  these  people  their  stocks  and  pass  books,  a  fraud  order 
would  be  issued  against  the  Trust  Company.  There  is  only  one  way  to 
keep  a  secret.     That  is,  to  tell  one  man,  and  then  kill  him.     By  night  the 


630  THE  SIEGE  OF  UNIVERSITY  CITY 

threat  against  the  Missouri-Lincoln  Trust  had  leaked  out.  The  next 
morning  tiie  newspapers  spread  the  report.  By  that  afternoon,  I  have 
been  told,  thirty  thousand  dollars  of  savings  deposits  had  been  withdrawn 
b}'-  frightened  patrons.  Judge  Murray,  the  trust  officer,  immediately  called 
me  up  and  I  met  their  officers  and  directors  in  a  conference.  They  were 
in  a  state  of  panic.  Their  great  banking  institution  was  in  danger  of 
being  ruined.  1  said,  "They  cannot  issue  a  fraud  order  against  you.  It 
is  ridiculous."  They  replied,  "If  they  can  issue  one  against  you,  with  five 
times  your  total  liabilities  on  hand  in  cash,  they  certainly  can  issue  one 
against  us.  We  cannot  make  any  such  showing.  But  even  if  they  do  not, 
the  mere  threat  will  put  us  out  of  business."     It  eventually  did. 

"Well,"  I  said,  "here  is  the  situation:  If  you  comply  with  your  trust 
agreement  with  me,  the  chances  are  one  hundred  to  one  that  they  will  not 
dare  to  issue  a  fraud  order  against  you.  If  you  don't,  I  will  bring  suit 
against  you  within  twenty-four  hours  for  the  whole  two  million  dollars. 
Take  your  choice  between  a  one-hundred-to-one  chance  and  an  absolute 
certainty."  I  did  not  stop  there.  I  sued  out  an  injunction  which  pre- 
vented the  return  of  the  securities  and  compelled  them  to  fulfill  their 
agreement.  Judge  Murray  waited  for  it  until  ten  o'clock  that  night.  An 
incipient  run  on  the  Missouri-Lincoln  Trust  Company  followed  the  next 
day.  The  president  has  told  me  they  never  recovered  from  it.  They  had 
to  go  out  of  business  a  year  or  two  later. 

That  experience  alarmed  the  St.  Louis  banks.  None  was  willing  to 
accept  our  account.  They  were  afraid  any  association  with  us  would  cause 
a  run  on  them  and  entail  great  loss.  I  practically  was  requested  tq 
keep  my  account  in  some  other  town,  and  not  to  come  into  their  banking 
institutions.  My  personal  friends  were  at  the  head  of  several  of  these 
banks.  Many  of  the  banks'  officers  were  stockholders  in  my  corporations. 
But  the  assaults  on  the  Missouri-Lincoln  Trust  Company  so  terrified  the 
bankers  of  St.  Louis  that  they  looked  upon  me  as  a  financial  leper.  My 
best  friends  were  afraid  to  have  me  enter  their  institutions.  They  feared 
the  unrighteous  wrath  of  the  Government.  They  asked  me  to  remove  my 
accounts  even  while  they,  as  individuals,  were  secretly  loaning  me  large 
sums  of  money.  The  result  was  the  complete  paralysis  of  our  business. 
Mr.  Edward  Hidden,  of  the  Commonwealth  Trust  Company,  told  me  that 
the  inspectors  demanded  to  see  their  books  and  the  records  of  our  deposits. 
They  became  alarmed  and  requested  us  to  withdraw  our  account. 

I  could  do  nothing  in  St.  Louis.  If  I  went  into  a  bank,  some  official 
would  have  a  fit  until  I  departed.  People  connected  with  the  banks  were 
almost  afraid  to  walk  on  the  street  with  me.  They  would  come  to  my 
home  at  night,  but  in  daylight  I  was  not  a  welcome  addition  to  the  bank's 
scenery.  I  was  an  undesirable  citizen.  Finally,  I  went  to  Chicago  to 
obtain  money.  Mr.  Kramer  advanced  me  considerable  sums.  I  then 
asked  Nathan  Frank  to  bring  on  the  experts  of  the  Metropolitan  Insurance 
Company  of  New  York  to  examine  my  real  estate.  I  requested  a  loan  of 
seven  hundred  and  fifty  thousand  dollars.  They  approved  the  loan,  but 
owing  to  conditions  cut  it  to  four  hundred  thousand  dollars.  That  enabled 
me  to  turn  around  and  pick  up,  for  cash,  all  the  mortgages  and  loans  held 
by  the  People's  United  States  Bank.  The  receiver  was  then  enabled  to 
pay  that  out  in  cash  dividends. 

The  above  statement,  made  by  Lewis  before  the  Ashbrook  Com- 
mittee, was  substantially  confirmed  as  follows  by  the  testimony  of 
Judge  Matthew  P.  Murray,  trust  officer  of  the  Missouri-Lincoln 
Trust  Company,  before  the  same  committee,  at  its  hearings  in  St. 

Louis : 

My  recollection  of  the  transaction  is  that  Mr.  Lewis  came  to  my  office 
in  August,  1905,  with  Dr.  Pinckney  French.  I  had  understood  it  was 
agreed  that  the  Trust  Company  would  make  the  transfer.     I  knew,  how- 


THE  DREYFUS  CASE  OF  AMERICA  531 

ever,  that  there  was  a  fraud  order  out  against  the  bank,  and  I  said  there 
would  be  no  transfer  unless  it  was  satisfactory  to  the  postal  authorities. 
Mr.  Lewis  insisted  that  it  was  business,  and  that  he  had  a  legal  right  to 
do  business.  I  did  not  doubt  his  right,  but  told  him  that  if  the  postoffice 
authorities  took  exception,  we  should  have  no  legal  redress,  whether  it 
was  legitimate  or  not.  I  refused  to  make  the  transfer,  until  Mr.  Lewis 
had  interviewed  the  authorities  and  obtained  their  consent.  I  told  him  it 
was  a  business  they  probably  hadn't  any  interest  in,  yet  if  they  thought 
they  had,  it  would  deter  me  from  allowing  the  company  to  act.  I  said: 
"Go  and  lay  the  whole  scheme  before  the  proper  postal  authorities.  I 
don't  know  who  they  are,  but  I  suppose  you  have  had  experience  and  know." 
He  then  said  Mr.  Fulton  would  be  the  man  to  see,  and  left  my  office  for 
that  purpose. 

In  course  of  an  hour  Mr.  Lewis  called  me  up  on  the  phone  and  said 
Mr.  Fulton  had  told  him  it  was  perfectly  proper.  They  simply  did  not 
want  the  bank  to  go  on,  but  did  not  wish  to  interfere  with  Lewis'  other 
business.  I  did  not  call  up  Mr.  Fulton  to  confirm  Lewis'  statement.  I 
told  him  his  word  was  enough.  Some  time  afterwards,  however,  I  told 
Mr.  Fulton  what  Lewis  had  said.  He  replied:  "Lewis  ought  to  know 
that  I  was  not  the  authority,  but  that  the  authority  was  at  Washington." 
1  never  heard  the  fact  of  Mr.  Lewis  having  seen  Mr.  Fulton  questioned. 
There  was  some  difference  of  opinion  as  to  what  Mr.  Fulton's  expression 
was.  Mr.  I^ewis  introduced  testimony  of  somebody  connected  with  the 
Globe-Democrat,  in  a  suit  over  the  matter,  which  varied  slightly  from 
what  I  understood  from  Mr.  Lewis,  but  it  was  practically  the  same. 

INSPECTORS    THREATEN    THE    TRUST    COMPANY. 

About  a  month  afterwards,  on  the  morning  of  September  27,  three 
postoffice  inspectors — Sullivan,  Stice  and  Reid — walked  into  my  office  and 
stated  their  displeasure  with  the  transaction.  They  informed  us  that  we 
were  aiding  Mr.  Lewis  in  avoiding  the  fraud  order  which  the  Government 
had  issued  against  him.  They  asked  us  what  we  were  going  to  do.  I  ex- 
plained that  we  were  going  to  do  nothing  until  it  was  reported  as  satis- 
factory to  the  Government.  "Well,"  they  said,  "it  was  not  satisfactory." 
I  told  them  I  had  understood  from  Lewis  that  they  did  not  want  to 
interfere  with  any  of  his  business  except  the  bank.  The  reply  was  that  I 
was  under  a  misapprehension;  that  Lewis  was  a  very  dangerous  man. 
Then  they  spoke  about  Lewis'  paper.  They  said  that  it  was  very  abusive 
to  the  Government,  and  that  Mr.  Lewis  had  a  large  following  of  silly 
people.     This  statement  was  made,  I  think,  by  a  man  named  Sullivan. 

I  was  visited  on  several  occasion,  and  agreed  to  do  anything  they  would 
suggest.  I  was  afraid  of  a  threat  to  stop  the  mail  of  the  Missouri-Lincoln 
Company.  We  did  not  debate  much.  They  gave  me  to  imderstand  if  we 
did  not  act  with  them,  it  might  lead  to  a  fraud  order  against  us,  as  aiding 
Lewis.  This,  they  said,  they  would  help  to  avoid  if  I  handled  the  matter 
as  they  directed,  and  I  agreed. 

Mr.  Lewis;     In  other  words,  you  were  terrorized? 

Mr.  Murray:  Well,  as  far  as  I  personally  was  concerned  I  was  not 
terrorized  at  that  or  anything  else.  I  did  dread  the  consequences  that 
might  come  to  the  bank  and  those  interested  in  it. 

Mn.  Britt:     Any  threats  against  the  company.  Judge? 

Mr.  Murray:  None  at  all,  except  the  issuance  of  a  fraud  order. 
(Laughter.) 

Mr.  Britt:  Did  they  tell  you  that  they  would  issue  a  fraud  order 
against — make  any  threat  of  a  fraud  order — against  your  bank? 

Mr.  Murray:  Oh,  yes;  they  gave  us  to  understand  that  if  we  didn't 
act  with  them  that  there  would  be  a  fraud  order. 

Mr.  Britt:     Now,  in  what  way  did  they  give  you  to  understand  that? 

Mr.  Murray:  They  took  this  position,  that  we  were  just  exactly  the 
same  as  Lewis,  because  we  were  aiding  Lewis. 


532  THE  SIEGE  OF  UNIVERSITY  CITY 

Mk.  BRirr:     I  see. 

The  Chairman:  Just  one  question,  Mr.  Murray.  You  want  this  com- 
mittee, then,  to  understand  that  these  postotfice  inspectors  led  you  to 
beheve,  and  you  were  firmly  convinced,  that  if  you  continued  the  handling 
of  this  exchange  of  stock,  as  a  representative  of  Mr.  Lewis,  your  trust 
company  would  be  in  very  great  danger  of  having  a  fraud  order  issued 
against  it? 

Mr.  Murray:  Oh,  indeed!  Otherwise  I  should  never  have  made  the 
humiliating  deal  we  did  to  handle  everything  with  them  in  accordance 
with  their  wishes. 

LEWIS    "'eXCO^I.-MUNICATED." 

They  also  proposed  to  put  a  censor  on  our  mail,  to  segregate  Lewis* 
mail  and  turn  ours  over  to  our  bank.  I  told  them  that  would  be  equivalent 
to  a  regular  fraud  order.  We  were  simply  compelled  to  do  everything 
they  requested.  I  notified  Mr.  Lewis  that  1  would  return  the  securities. 
That  night  he  got  busy  and  got  out  an  injunction  against  the  company 
and  me  and  everybody,  to  compel  us  to  go  on  and  carry  out  the  contract. 
The  injunction  never  was  dissolved.  The  Lewis  Publishing  Company 
afterwards  got  a  written  order  from  each  party  to  deliver  their  securities 
to  Mr.  Lewis  or  the  company.  He  had  a  sack  full  of  them,  but  I  refused 
to  turn  them  over  to  him.  I  believe  I  told  him  he  was  excommunicated, 
but  I  still  belonged  to  the  church.  (Laughter.)  Part  were  finally  turned 
over  to  Major  Kramer  as  trustee,  and  the  rest  to  the  Lewis  Publishing 
Company.*  Mr.  Lewis  consulted  me  regarding  the  form  of  this  transfer 
in  the  first  instance,  and  I  regarded  it  as  perfectly  legal,  both  in  form  and 
substance. 

Here  ensued  the  following  colloquy: 

Mr.  Towner:  Did  you  have  any  knowledge  of  the  legality  of  the  trans- 
action, as  to  whether  it  was  in  accordance  with  the  regulations  and  rules 
and  laws  of  the  postal  authorities? 

Mr.  Murray:  I  didn't  know  that  the  postal  authorities  regulated  our 
private  business,  up  to  that  time.     (Laughter.) 

Mr.  Towxer:     You  haven't   found  out  since  that  they  do? 

Mn.  Murray:  I  have  found  out  that  they  are  a  quantity  to  be  con- 
sidered. There  was  no  State  law  regulating  the  matter,  except  the  wish 
of  the  parties  to  dispose  of  their  property  as  they  pleased.  I  didn't  think 
there  was  any  law  regulating  it,  so  far  as  the  postal  authorities  were 
concerned,  but  I  was  afraid  that  they  might  think  there  was.     *     •    * 

We  were  simply  to  receive  the  stocks  and  deposits  and  make  what- 
ever disposition  the  owners  requested.  Even  after  we  had  received  them 
and  receipted  for  them,  they  could  make  any  change  they  desired.  The 
personal  instructions  I  received  from  Mr.  Lewis  about  making  the  transfer 


*The  following  report  was  afterwards  made  to  the  postoffice  inspectors  by  Judge 
Murray,  in  behalf  of  the  Missouri-Lincoln  Trust  Company,  enumerating  the  securities 
received  in  exchange  for  Lewis'  trustee  notes  and  delivered  to  H.  L.  Kramer,  trustee: 

People's    United    States    Bank    stock $    191,219.00 

E.    G.    Lewis'    personal    receipts 20,426.00 

Depositors'     pass     cards « 14,504.50 

Pass    books    -• 3,194.01 

Notes    3.002.00 

$    232,345.51 

Also    securities    received    in    exchange    for    Lewis    Publishing    Company    preferred 

stock   and   delivered  to  F.  V.   Putnam,   treasurer  of   the   Lewis   Publishing   Company: 

People's    United    States    Bank    stock $    486,834.00 

Lewis'    personal    receipts 537,718.02 

Depositors'   pass   cards 18,692.50 

Depositors'    pass    books 28,698.89 

Notes    10,251.00 

$1,082,194.41 


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THE  DREYFUS  CASE  OF  AMERICA  535 

were  to  let  the  parties  do  just  as  they  pleased,  regardless  of  whether  they 
had  assigned  them  or  not.  I  couldn't  see  that  there  was  any  fraud  in  that. 
Mr.  Lewis'  financial  position  was  very  good  at  that  time.  He  had  valuable 
real  estate  out  there.  He  had  credit  with  us.  He  was  in  good  standing 
as  a  business  man.    I  knew  that  the  fraud  order  did  not  affect  his  integrity. 

These  transactions  were  explained  by  Lewis  in  his  testimony  be- 
fore the  Ashbrook  Committee,  in  substance  as  follows* 

Three  options  were  offered  to  the  investors  in  the  bank.  First,  they 
could,  of  course,  take  whatever  the  bank  paid  in  liquidation.  That  was 
their  evident  right  and  privilege.  Second,  those  who  desired  to  stand  by 
me  and  fight  to  a  finish  could  take  my  personal  note,  protected  by  my 
entire  income,  and  receive  five  per  cent  interest.  Third,  those  who  chose 
to  come  into  the  publishing  business  could  accept  the  preferred  stock  of 
the  Lewis  Publishing  Company.  This  we  agreed  to  increase  to  equal  their 
full  investment,  dollar  for  dollar.  I  undertook  to  be  responsible  for  the 
loss  or  difference  between  what  the  bank  liquidated  and  the  par  value  of 
their  bank  stock.  I  paid  the  first  year's  interest.  Everything  then  was 
in  complete  paralysis.  Our  credit  was  destroyed.  We  could  move  neither 
hand  nor  foot.  The  record  will  show,  however,  that  where  people  were  in 
actual  distress,  I  liquidated  their  Investments,  to  the  amount  of  many 
thousand  dollars. 

Over  two  thousand  of  the  stockholders  in  the  assassinated  bank  were 
oflBcers  or  directors  of  other  banking  institutions,  railroads  or  other  cor- 
porations. The  stock  was  very  generally  held  by  representative  business 
people.  They  came  in  on  the  big  idea  involved.  They  preferred  to  stay  in 
and  see  the  finish,  rather  than  get  their  money.  Many  returned  their 
stocks  endorsed  in  blank.  They  told  me  to  keep  the  money,  and  not  get 
licked,  but  to  fight  for  the  principle  involved. 

The  Lewis  Publishing  Company  was  virtually  free  from  debt  then.  It 
had  large  cash  resources.  In  addition,  it  owned  two  great  publications 
and  printing  houses.  It  was  one  of  the  most  profitable  publishing  enter- 
prises on  earth.  It  was  earning  a  handsome  profit.  No  attack  was  then 
being  made  on  the  Lewis  Publishing  Company.  A  hearing  had  been  held 
before  the  third  assistant  postmaster-general  at  Washington,  but  we  did 
not  dream  they  would  follow  the  matter  over  to  the  magazines  and  destroy 
them.  The  magazines  were  to  be  our  fighting  weapon.  I,  therefore,  laid 
the  proposition  before  the  stockholders  of  the  Lewis  Publishing  Company. 
A  formal  meeting  was  called,  of  which  due  notice  was  published.  The 
meeting  was  held  in  the  Magazine  building.  Most  of  the  stockholders  at- 
tended. According  to  my  recollection,  seventy  or  eighty  of  the  represen- 
tative stockholders  were  present.  They  brought  proxies  for  almost  the 
entire  remaining  stock.  Mr.  John  A.  Lewis,  cashier  of  the  National  Bank 
of  Commerce,  was  one  of  the  tellers.  Mr.  George  Augustine  of  the  Carle- 
ton  Dry  Goods  Company,  was  another. 

Although  there  was  then  no  way  to  tell  what  proportion  of  the  invest- 
ments in  the  bank  would  be  turned  over  in  exchange  for  publishing  company 
stock,  I  proposed  that  we  increase  the  preferred  capital  stock  by  $3,300,000. 
The  common  stock,  which  was  held  by  my  associates  and  myself,  was  to 
remain  unchanged.  I  undertook  to  subscribe,  as  trustee,  for  those  who 
desired  to  transfer  their  investment  from  the  bank  into  the  publishing 
company.  I  gave  the  publishing  company  my  note,  with  the  stock  attached 
as  collateral.     This  arrangement  was  afterwards  ratified. 

The  Missouri-Lincoln  Trust  Company  then  turned  over  the  securities  to 
be  exchanged  for  the  Lewis  Publishing  Company  preferred  stock  to  the 
treasurer  of  the  company.  He  presented  them  to  the  receiver.  After  the 
bank  liquidated,  the  corresponding  payments  went  into  the  capital  stock  of 
the  Lewis  Publishing  Company,  being  credited  on  my  notes,  as  the  stock 
was  issued,  in  lieu  of  former  investments  in  the  bank.    Then  the  Publish- 


536  THE  SIEGE  OF  UNIVERSITY  CITY 

iiig  Company  put  up  the  Woman's  National  Daily  building  and   started 
that  newspaper.     We  rolled  up  our  sleeves  and  took  a  fresh  hold. 

The  amount  of  preferred  stock  taken  in  this  way  was  not  quite  one 
and  one-half  million  dollars.  I  also  paid  over  several  hundred  thousand 
dollars  of  the  money  received  by  me  for  my  personal  notes.  Furthermore, 
1  raised  large  sums  on  real  estate  and  paid  them  on  my  notes  for  the, 
stock.  To  sum  up  the  matter,  the  investors  had  the  option  to  abide  by 
the  liquidation,  or  take  Lewis  Publishing  Company  preferred  stock,  or 
my  trustee  notes.  Had  tlie_v  remained  in  the  bank  they  would  have 
received  eighty-seven  per  cent  of  the  cash.  Some  did  so.  The  large 
number  made  the  exchange  for  one  or  other  of  the  two  other  options. 
About  one  and  a  half  millions  of  the  increased  preferred  stock  was  thus 
transferred  from  stockholders  and  depositors.  A  great  many  depositors 
also  took  advantage  of  one  of  these  options,  although  they  knew  they 
could  get  cash  in   full  from  the   receiver. 

swanger's  valedictory. 

Receiver  Essen,  in  accordance  with  instructions  of  the  court, 
mailed  a  circular  letter  to  all  stockholders  under  date  of  October 
9,  instructing  them  to  present  their  certificates  of  stock  for  adjust- 
ment and  allowance  between  the  first  Monday  of  December,  1905, 
and  the  first  Monday  of  February,  1906.  He  informed  the  investors 
about  what  the  bank  was  expected  to  liquidate  and  advised  them  that 
any  transfers  of  their  stock  which  they  might  have  made  could  be 
set  aside  if  they  so  desired.  The  response  of  the  stockholders  and 
depositors  to  this  circular  abundantly  satisfied  both  the  court  and  the 
attorney-general  that  they  desired  to  stand  by  the  assignment  of 
their  claims  to  Lewis.  Mr.  Essen,  at  Lewis'  request,  addressed  a  let- 
ter to  the  Missouri-Lincoln  Trust  Company,  informing  it  of  the  re- 
sult of  this  circularization.  In  this  letter  he  says:  "After  having 
carefully  gone  over  the  slips,  I  find  that  the  percentage  of  those 
who  desire  to  repudiate  their  assignment  is  somewhat  less  than  one 
per  cent,  based  on  tlie  number  of  answers  received."  He  adds: 
"Mr.  Lewis  has  instructed  me,  upon  receiving  notice  from  any  stock- 
holder that  he  desires  to  cancel  his  assignment,  not  to  recognize 
the  transfer  to  him,  but  to  adjust  the  claim  with  the  stockholder  di- 
rect." Shortly  thereafter,  the  court  denied  the  motion  of  the  at- 
torney-general that  these  assignments  should  be  declared  null  and 
void. 

Lewis'  amazing  progress  in  his  refunding  operations  evidently 
was  objectionable  both  to  the  State  and  Federal  authorities.  Secre- 
tary Swanger,  although  he,  at  the  same  time  disclaimed  any  personal 
bias,  privately  protested  to  the  receiver  because  of  the  latter's  appar- 
ent sympathy  with  Lewis  and  co-operation  in  Lewis'  plans.  The 
attitude  of  the  Watchman-Advocate,  a  newspaper  owned  by  the  re- 
ceiver, was  also  objected  to.  Swanger  denied  acting  "in  collusion 
with  corrupt  officials  to  loot  the  bank,"  as  charged  in  that  publica- 
tion. Essen  appears  to  have  retorted  warmly,  disclaiming  any  re- 
sponsibility for  Lewis'  personal  arrangements  with  stockholders.  He 
received  a  response  which  was  perhaps  intended  as  a  conciliatory 
overture,  but  whicli  might  have  been  regarded  as  a  bid  to  become 


THE  DREYFUS  CASE  OF  AMERICA  537 

aligned  with  the  official  foes  of  Lewis  and  his  institutions.  Swang- 
er's  letter  is  notable  for  its  admission  of  the  policy  of  "concerted 
action"  between  the  Federal  authorities  "from  the  President 
doM'n"  and  the  State  authorities  of  Missouri.     He  says: 

I  do  not  hold  you  responsible  for  Mr.  Lewis'  articles.  I  do  not  think 
that  you  inspire  them  or  write  them,  and  I  do  not  care  anything  about 
them,  if  everybody  who  is  interested  in  the  People's  United  States  Bank 
gets  just  what  is  coming  to  them.  You  can  be  of  invaluable  assistance  to 
the  State  in  this  matter,  and  I  hope  you  will  take  a  stand  for  the  rights 
of  the  creditors  of  this  bank;  and,  having  taken  it,  stand  to  the  end.  In 
that  position,  you  will  have  both  Mr.  Hadley  and  myself  with  you;  and 
you  will  have  the  Federal  Government  with  you,  from  the  President  down. 

The  sorry  record  of  the  State  authorities  of  Missouri  limps  lamely 
to  its  end  in  the  sixth  biennial  report,  for  1906,  of  Bank  Examina- 
tion in  Missouri.  Here  Secretary  of  State  Swanger  gives  his  ver- 
sion of  his  official  conduct  touching  the  People's  Bank.  He  first 
rehearses  briefly  the  story  of  the  promotion  of  the  bank,  as  to  which 
he  says;  "The  extravagant  promises  which  he  (Lewis)  made  as  to 
the  safe  conduct  of  the  bank  and  the  bright  pictures  of  the  fabu- 
lous profits  which  would  come  from  the  investment  of  its  capital 
stock,  which  he  publislied  from  time  to  time  in  his  magazine,  accom- 
plished their  purpose."  He  then  recounts  the  fact  as  to  the  incor- 
poration, organization  and  examination  of  the  bank,  with  which  the 
reader  is  familiar.  He  recites  "the  state  of  facts  with  which  he 
was  brought  face  to  face  when  the  fraud  order  was  issued"  and 
mentions  briefly  the  appointment  and  ouster  of  the  first  receiver. 
He  then  says: 

Upon  again  assuming  control  of  the  bank,  Mr.  Lewis  sought  to  secure 
from  the  many  thousands  of  subscribers  to  the  capital  stock  a  transfer  of 
their  stock  to  himself.  Strange  as  it  may  seem,  by  means  of  sensational 
ai-ticles  in  his  magazines  and  personal  letters  of  like  character,  he  was 
enabled  to  secure  the  assignment  of  hundreds  of  thousands  of  dollars' 
worth  of  the  capital  stock  by  giving  them  in  lieu  thereof  his  own  personal 
unsecured  note,  bearing  five  per  cent  interest  annually,  and  payable  only 
when  his  income  above  his  living  expenses  would  permit.  Another  method 
for  obtaining  the  capital  stock  of  the  bank  was  by  promising  to  issue  in 
lieu  thereof  six  per  cent  preferred  stock  in  the  Lewis  Publishing  Company. 
Hundreds  of  thousands  of  dollars  of  the  capital  stock  was  obtained  in 
this  way.  Thus,  when  the  time  came  for  the  distribution  of  the  assets  of 
the  bank  in  liquidation,  Mr.  Lewis  and  his  publishing  company  were  in 
possession  of  nearly  one  million  five  hundred  thousand  dollars  of  the  capital 
stock.  The  result  of  these  transfers  is  that  the  subscribers,  who  had  put 
their  money  in  the  capital  stock  of  the  bank  to  that  amount,  now  hold  in 
place  of  their  money  Mr.  Lewis'  personal  notes  or  stock  in  the  Lewid 
Publishing  Company. 

Swanger  next  chronicles  the  history  of  the  celebrated  note  of  one 
hundred  and  forty-six  thousand  dollars  for  promotion  expenses, 
which,  he  says,  "was  by  the  directors  returned  to  Mr.  Lewis  and  al- 
lowed as  reasonable  charges  against  the  bank."  He  then  adds,  "The 
court  on  motion  of  the  attorney-general,  ordered  this  note  returned 
to  the  bank  and  suit  brought  for  its  payment,  but  before  this  suit 
was  determined  the  receiver  was  discharged.     This  made  it  neces- 


538  THE  SIEGE  OF  UNIVERSITY  CITY 

sary  for  him  to  dismiss  the  suit  as  he  no  longer  had  power  to  proee- 
cute  it."  He  then  mentioned  the  appointment  of  Essen  and  his 
ouster  by  the  Supreme  Court.  The  decision  of  the  court  criticising 
severely  his  official  conduct,  was  touched  upon  in  brief  and  formal 
phrases.  He  remarks  that  the  receiver  paid  in  full  all  depositors 
on  demand  and,  on  the  order  of  the  court,  paid  back  to  the  stock- 
holders dividends  on  the  capital  stock  equal  to  eighty-five  per  cent 
of  their  holdings.  He  mentions  the  additional  dividend  to  the 
stockholders  of  two  per  cent  paid  by  the  directors,  making  a  total 
of  eightj'-seven  per  cent  paid  back  in  all.  He  estimates  the  loss  to 
stockholders  as  about  twelve  per  cent  of  the  amount  paid  in  on  the 
capital  stock  or  a  quarter  of  a  million  dollars.  "I  may  add,"  says 
Swanger,  "by  way  of  explanation,  that  the  large  amount  of  stock  of 
this  bank  obtained  by  Mr.  Lewis  from  the  thousands  of  stockholders 
enabled  the  receiver  to  more  readily  wind  up  its  affairs."  He  thus 
concludes : 

In  fact,  the  dividends  on  this  stock  would  pay  the  indebtedness  of  the 
Lewis  Publishing  Company,  the  University  Heights  Realty  and  Develop- 
ment Company,  and  return  to  Mr.  Lewis  many  other  loans  and  stock  of 
other  corporations  placed  in  this  bank  by  him,  together  with  a  goodly 
amount  of  cash.  The  fraud  order  is  still  in  force  against  the  bank,  and  its 
officers  and  agents  as  such,  although  several  hearings  have  been  had  in 
the  United  States  courts  and  repeated  appeals  have  been  made  to  the 
Postal  Department  to  have  the  order  revoked.  Mr.  Lewis  is  also  under 
indictment  in  the  Federal  court  on  charges  of  using  the  mails  for  fraudu- 
lent purposes." 

The  sequel  will  show  that  the  outcome  of  the  indictment  thus 
quoted  by  Swanger,  as  presumptive  evidence  of  wrong-doing  in  the 
promotion  of  the  People's  Bank,  was  as  inglorious  to  the  Federal 
authorities  by  whom  it  was  secured,  as  was  the  denouement  of  his 
own  efforts  to  discredit  that  institution  through  the  receivership  pro- 
ceedings. 


CHAPTER  XXIII. 

THE  ATTACK  ON  THE  WOMAN'S  MAGAZINE. 

The  Attitude  of  Madden — The  War  on  the  Woman's  Maga- 
zine— The  Inspectors'  Report — Madden's  Report  to 
Cortelyou — The  Usual  Lines — The  Bromwell-Wein- 
schenk  Agreement — Parshall,  the  Informer — The 
Hold-up  of  the  Woman's  Farm  Journal — Madden's  Pro- 
test TO  CORTEI.YOU ThE  INSPECTORS*  CoUNT  OF  THE  SUB- 
SCRIPTION Cards — The  Conference  in  Wyman's  Office — 
The  Grand  Jury  Proceedings — Eilermann's  Affidavit — 
Miller  Interrogated — The  First  Indictments — Atti- 
tude OF  Fulton — The  Third  Attack. 

The  story  of  the  "concerted  action"  of  the  Federal  and  State 
authorities  against  the  People's  United  States  Bank  has  now  been 
fully  told,  Inspector-in-Charge  Fulton,  in  pursuance  of  that  pro- 
gram, was  able  to  command  the  support  of  the  assistant  attorney- 
general  for  the  Postoffice,  the  attorney-general  himself,  and  the 
postmaster-general,  or  in  the  words  of  Secretary  of  State  Swanger, 
"the  entire  Administration,  from  the  President  down."  The  Adminis- 
tration had  been  sustained  by  the  Federal  courts.  It  had  been  sup- 
ported by  the  State  authorities  in  Missouri  to  an  extent  held  to  be 
unlawful  by  the  Missouri  Supreme  Court.  It  even  enjoyed  the 
co-operation  of  a  sympathetic  fraud  order  enforced  by  the  express 
trust.  There  was  but  one  hitch  in  the  "concerted  action"  program. 
This  was  the  refusal  of  the  third  assistant  postmaster-general  to 
silence  Lewis  by  summarily  withdrawing  the  second-class  privilege 
from  the  Woman's  Magazine  and  the  Farm  Journal.  Upon  this  rock 
the  fortunes  of  the  allies  suffered  shipwreck. 
the  attitude  OF  madden. 

The  personality  of  the  man  who  thus  thwarted  the  policy  of  con- 
certed action  within  the  Department  itself  now  becomes  of  com- 
manding importance.  His  figure  stands  out  with  increasing  promi- 
nence as  the  record  of  the  Siege  progresses.  His  solitary  fight  for 
the  principles  of  truth  and  justice  against  the  power  and  prestige  of 
his  official  superior  deserves  commemoration  in  a  history  devoted 
to  itself  alone.  Only  the  labors  of  a  sympathetic  biographer  can 
do  full  justice  to  the  conduct  of  Edwin  C.  Madden  in  the  Lewis 
case.  For  the  position  of  Madden  from  the  standpoint  of  this 
story  is  anomalous.  His  reform  policy  gave  official  sanction  to  the 
first  attacks  upon  the  Winner  and  the  Woman's  Magazine.  It  pre- 
vented definite  action  by  the  Department  on  the  application  of  the 

539 


540  THE  SIEGE  OF  UNIVERSITY  CITY 

Woman's  Magazine  for  second-class  entry  on  the  occasion  of  the 
change  of  name  from  the  Winner.  It  caused  Gladden  to  formulate 
sundry  criticisms  against  Lewis'  publications  in  his  official  corre- 
spondence with  the  postmaster-general.  It  even  led  him  to  state 
that  in  his  opinion  they  could  be  ruled  out  of  the  second  class  under 
existing  law.  It  is,  in  short,  the  contention  of  the  Government  that 
the  whole  trend  of  Madden's  reform  points  to  the  Lewis  publica- 
tions as  abuses  of  the  second-class  privilege.  The  postal  authorities 
quote  Madden's  official  rulings  and  correspondence  in  justification 
of  their  conduct.  They  allege  that  Madden's  attitude  touching  the 
Lewis  publications  was  totally  inconsistent  with  the  tenor  of  his 
previous  policy. 

On  these  grounds,  the  last  Administration  of  which  he  formed  a 
part,  and  those  which  have  since  come  into  power,  have  repudiated 
Madden  for  his  alleged  failure  to  apply  to  the  Lewis  case  the 
principles  wliieh  he  himself  formulated,  and  upon  the  execution  of 
which  he  so  successfully  embarked.  He  occupies,  therefore,  in  this 
history  a  imique  and  solitary  position.  He  is  here  seen  to  stand  alone 
and  to  act  upon  his  individual  judgment,  unmindful  of  the  conse- 
quences either  to  the  Administration,  to  Lewis,  or  to  himself.  In 
order  to  do  ]\Iadden  full  justice,  the  part  thus  played  by  him  should 
be  viewed  from  his  own  standpoint.  This  the  limitations  of  space 
of  the  present  volume  forbid.  Tlie  controversy  between  Madden 
and  Cortelyou  touching  the  Lewis  publications,  though  a  vital  and 
essential  feature  of  this  story,  is  but  one  of  its  many  stirring  epi- 
sodes. It  must  be  here  summarily  disposed  of  with  sole  regard  to 
its  bearing  upon  the  Siege  of  University  City.  It  is  to  be  hoped, 
however,  that  the  full  story  will  be  told  at  some  future  time  by  Mad- 
den himself,  or  his  biogi-a])her,  and  that  his  entire  official  corre- 
spondence touching  the  Lewis  case  will  be  then  interpreted  from 
Madden's  viewpoint  and  made  available  to  the  general  reader.  When 
thus  portrayed  in  proper  perspective,  the  personality  of  Madden 
will  take  its  place  among  the  most  heroic  figures  in  American  public 
life.  It  will  stand  for  all  time  in  American  history  among  the  no- 
blest examples  of  firm  and  steadfast  adherence  to  a  lofty  ideal,  and 
of  incorruptible  self-sacrifice  in  the  discharge  of  official  duty. 

THE    WAR    ON    THE    WOMAN 's    MAGAZINE. 

The  story  of  the  war  on  the  Woman's  Magazine  covers  the  period 
from  February  7,  1905,  to  March  4,  1907,  a  little  over  two  years. 
The  attack  was  made  by  the  Triumvirate  at  St.  Louis,  consisting  of 
Inspeetor-in-Charge  Fulton,  Postmaster  Wyman  and  United 
States  Attorney  Dyer.  The  leading  spirit  was  Fulton.  The  pri- 
mary objective  of  the  Triumvirate  manifestly  was  to  silence  Lewis 
by  causing  his  magazines  to  be  excluded  from  the  second-class 
mails.  The  first  campaign  was  thwarted  by  a  decision  of  the  third 
assistant  postmaster-general,  adverse  to  the  recommendation  of  the 
inspectors,  in  July,  1905.  A  second  attack  was  inaugurated  by  the 
St.  Louis  Triumvirate  in  August.     This  culminated  in  Lewis'  indict- 


THE  DREYFUS  CASE  OF  AMERICA  641 

ment  on  December  1,  1905,  on  a  charge  of  conspiracy  to  defraud  the 
Government  of  postal  revenues.  A  third  blow  was  struck  in  April, 
1906.  This  took  the  form  of  an  arbitrary  limitation  of  the  mailings 
of  the  Lewis  Publishing  Company  to  about  two-thirds  of  their  pre- 
vious circulation,  in  case  of  the  Woman's  Magazine,  and  one-half, 
in  case  of  the  Farm  Journal.  A  charge  of  excess  postage  was  made 
on  the  remainder  at  the  third-class  rate  of  four  cents  a  pound. 

We  are  now  to  review  the  story  of  these  three  campaigns,  with 
their  councils,  sorties,  skirmishes  and  battles.  Especially  must  we 
consider  the  diplomatic  intrigues  in  high  quarters,  whereby  the  St. 
Louis  Triumvirate  gained  and  kept  the  support  of  the  Administra- 
tion. We  also  are  to  observe  the  nature  of  Lewis'  defense  and  the 
official  acts  and  attitudes  of  Third  Assistant  Madden,  who,  single- 
handed,  throughout  this  entire  period,  thwarted  every  effort  of 
Fulton  and  his  clique  to  summarily  deprive  the  Lewis  publications 
of  the  privileges  of  the  mails.  The  sequel  will  show  that  George 
Bruce  Cortelyou,  and  he  alone,  was  finally  and  decisively  responsible 
for  what  Lewis  is  pleased  to  call  the  assassination  of  the  Woman's 
Magazine  and  Farm  Journal. 

The  theory  on  which  the  inspectors  made  their  first  attack  upon 
these  publications  was  that  Lewis  had  designed  and  used  them  "pri- 
marily for  advertising  purposes,"  in  violation  of  law.  They  also 
maintained  that  in  promoting  the  sale  of  bonds  of  the  Development 
and  Investment  Company,  and  in  exploiting  the  People's  Bank, 
both  publications  had  been  used  in  aid  of  schemes  to  defraud.  These 
charges  were  based  upon  two  of  the  cases  against  the  Lewis  enter- 
prises made  up  in  Washington  and  inherited  by  Fulton  from  the 
previous  administration  of  George  A.  Dice.  Both  were  turned  over 
by  Fulton  to  Inspectors  Stice  and  Sullivan  for  investigation,  to- 
gether with  that  of  the  People's  Bank,  on  February  7,  1905.  There 
was,  however,  no  case  on  file  with  the  division  of  postoffice  inspectors 
at  St.  Louis,  charging  the  Lewis  Publishing  Company  with  the 
abuse  of  its  second-class  privilege.  Nor  had  there  been  any  charge 
of  that  nature  entertained  by  the  Department  since  the  investiga- 
tion of  Harrison  and  Holden  leading  to  the  citation  against  the 
Winner,  on  April  2,  1902.  Meantime,  the  name  had  been  changed 
to  the  Woman's  Magazine,  and  the  character  of  the  magazine  itself 
had  been  completely  altered. 

Fulton,  a  new  broom  in  charge  of  the  St.  Louis  division,  evi- 
dently made  up  his  mind  to  make  a  clean  sweep  of  the  investigation 
of  the  Lewis  enterprises,  directed  by  Vickery  from  Washington. 
In  reply  to  Vickery 's  instructions,  on  February  11,  Fulton  stated 
that  before  concluding  this  investigation  he  expected  to  make  a 
report  as  to  whether  or  not  the  Woman's  Magazine  and  Farm 
Journal  were  conducted  in  abuse  of  the  second-class  privilege.  He 
then  pointed  out  that  there  were  no  official  charges  to  that  effect  on 
file,  and  requested  Vickery  to  make  up  such  a  case  and  send  it  to 
him  for  investigation.     Vickery  promptly  comjjlied.     He  forwarded, 


642  THE  SIEGE  OF  UNIVERSITY  CITY 

on  February  it,  an  official  jacket,  docketed,  with  the  charge  that 
the  Lewis  Publishing  Company  was  abusing  its  second-class  mailing 
privilege.  In  this  occurs  the  words  "P.  O.  I.  (Postoffice  inspector), 
complainant."  In  other  words,  Fulton  was  the  sole  complainant  in 
this  case. 

On  receipt  of  the  official  jacket  from  Washington,  Fulton  turned 
this  case  over  to  his  inspectors  to  be  investigated.  The  reader  will 
recall  that  the  first  visit  to  Lewis'  office  was  made  on  March  17, 
1905.  The  conversation  that  afternoon  was  desultory.  It  touched 
upon  the  Lewis  Publishing  Company  only  as  one  among  Lewis' 
many  enterprises.  In  pursuance  of  a  general  agreement  arrived  at 
on  that  day,  the  inspectors  submitted  to  Lewis  a  list  of  questions 
designed  to  draw  from  him  the  facts  touching  advertisements  of 
his  own  enterprises  in  the  Woman's  Magazine  and  Farm  Journal. 
Lewis,  in  response,  averred  that  all  the  advertisements  of  the  com- 
panies in  which  he  was  interested  were  being  charged  to  those  con- 
cerns at  full  card  rates.  He  pointed  out  that  many  advertisements 
inquired  about  were  being  run  in  behalf  of  Mr.  Cabot,  as  part  of  the 
purchase  price  of  the  Woman's  Farm  Journal.  He  then  drew  atten- 
tion to  the  fact  that  all  the  advertising  of  his  own  corporations  in 
both  magazines  amounted  to  a  very  small  fraction,  less,  he  averred, 
than  one  per  cent  of  the  total  cash  advertising  in  their  volumns.  He 
also  furnished  the  inspectors  a  financial  statement  of  the  Lewis  Pub- 
lishing Company,  together  with  such  other  information  as  was  re- 
quired. 

THE    inspectors'   REPORT. 

On  this  basis  of  fact.  Inspector  Stice  drew  up  a  report,  which  was 
signed  jointly  by  himself  and  Inspector  Sullivan,  on  the  same  day 
they  signed  the  report  on  the  People's  Bank,  May  17,  1905.  Both 
reports  were  approved  by  Fulton  and  forwarded  to  Vickery.  That 
on  the  Lewis  Publishing  Company  was  transmitted,  in  due  course, 
to  the  bureau  of  the  third  assistant,  the  officer  having  lawful  juris- 
diction of  the  administration  of  the  second-class  law.  This  was 
accompanied  by  a  carbon  copy  of  the  report  on  the  bank. 

The  reader  will  recall  the  inauguration  of  certain  reforms  of 
alleged  abuses  of  the  second-class  mails  by  Tliird  Assistant  Post- 
master-General Madden,  as  described  in  the  foregoing  pages.  It 
will  be  remembered  that  when,  in  due  course  of  this  reform,  the 
third  assistant  reached  the  mail  order  journals,  he  caused  citations 
to  be  issued  to  a  large  number  of  these  publications.  The  Winner 
was  thus  cited  to  show  cause  why  its  second-class  privilege  should 
not  be  withdrawn.  A  movement  was  promptly  started  among  the 
owners  of  the  mail  order  journals,  thus  tlireatened  with  annihilation, 
to  fight  the  Department  in  the  courts.  Lewis  was  invited  to  partici- 
pate. Upon  the  advice  of  Harrison  J.  Barrett,  he  refused.  He  took 
the  ground  that  the  Woman's  Magazine  was  no  longer  in  the  class 
with  the  periodicals  objected  to  by  the  tliird  assistant.  It  took  rank, 
he  said,  with  the  Ladies'  Home  Journal,  the  Woman's  Home  Com- 


THE  DREYFUS  CASE  OF  AMERICA  543 

panion,  and  other  like  publications.  He  contributed  the  sum  of  one 
thousand  dollars  to  the  fund  raised  by  the  publishers  to  meet  the 
cost  of  litigation,  but  stipulated  that  neither  his  name,  nor  that  of 
his  publications,  should  be  in  any  way  involved. 

A  group  representing  nineteen  publications  was  finally  gotten  to- 
gether. These  publishers  employed  the  firm  of  Bromwell  &  Wein- 
schenk  as  attorneys,  and  applied  to  the  courts  of  the  District  of 
Columbia,  which  have  original  jurisdiction  over  the  administrative 
acts  of  Federal  officials,  for  an  injunction  against  the  postmaster- 
general.  A  temporary  restraining  order  was  granted.  This  enjoined 
either  the  postmaster-general  or  the  third  assistant  from  taking  any 
further  steps  against  the  publications  named  until  the  cause  should 
be  finally  adjudicated.  The  whole  course  of  Madden's  reform  touch- 
ing the  mail  order  journals  was  thus  summarily  arrested.  For  it 
would  have  been  manifestly  improper,  in  his  opinion,  to  proceed 
against  other  periodicals  of  the  same  type  while  nineteen  of  those 
deemed  by  him  to  the  principal  offenders  were  protected  by  an  order 
of  court.  The  case  then  pending  against  the  Winner,  under  the 
citation  of  April  2,  1902,  was,  therefore,  held  in  suspense,  with 
others  of  the  same  general  character. 

Fulton,  when  acknowledging  Vickery's  instructions  to  investigate 
the  Lewis  enterprises,  had  requested  him  to  ascertain  from  the  third 
assistant  the  status  of  this  case.  He  was  informed  that  the  injunc- 
tion proceedings  were  still  pending,  and  that  no  further  action  was 
contemplated  by  the  bureau  of  the  third  assistant  until  this  litigation 
was  settled.  Notwithstanding  this  fact,  and  without  further  refer- 
ence to  that  officer,  Fulton,  as  above  narrated,  on  his  own  initiative, 
requested  Vickery  to  formulate  charges  against  the  Lewis  Publish- 
ing Company.  He  then  caused  these  to  be  investigated  and  ap- 
proved and  forwarded  the  inspectors'  report.  The  first  information 
of  this  proceeding  had  by  the  third  assistant  was  the  receipt  by  him, 
on  May  19,  of  the  inspectors'  report. 

Madden's  opinion  of  the  postoffice  inspectors  is  already  known  to 
the  reader.  He  regarded  them  as  lawless  and  unreliable.  For  the 
delicate  task  involved  in  his  projected  reform  of  the  administration 
of  the  second-class  law,  he  had  procured  from  Congress  a  corps  of 
special  agents  whose  duty  it  was,  under  his  supervision,  to  investi- 
gate the  claims  of  publishers  regarding  their  circulation.  For  sev- 
eral years  these  special  agents  had  been  employed  for  such  pur- 
poses, to  the  exclusion  of  the  postoffice  inspectors.  Lacking  the  ini- 
tiative of  the  third  assistant,  the  appearance  of  this  report,  inspired 
solely  by  the  activity  of  the  inspectors,  impressed  Madden  as  being 
strikingly  irregular.     ^ 

The  Woman's  Magazine  and  Farm  Journal  were  known  to  him 
as  two  of  the  periodicals  of  largest  circulation  in  the  United  States. 
He  regarded  them  in  the  same  general  class  as  the  nineteen  publi- 
cations then  protected  by  injunctions.  They  were  not  guilty,  so 
far  as  he  was  aware,  of  more  flagrant  abuses  of  the  second-class  law 


644  THE  SIEGE  OF  UNIVERSITY  CITY 

than  were  countless  other  periodicals.  The  idea  of  summarily 
excluding  them  from  the  mails  was  not  only  contrary  to  Madden's 
avowed  policy  of  postponing  further  action  until  his  newly  made 
regulations  were  sustained  by  the  courts.  It  was  also  repugnant  to 
his  idea  of  fairness  and  justice. 

Moreover,  on  examining  the  inspectors'  report,  Madden  at  once 
recognized  that  it  was  based  upon  a  total  misapprehension  of  the 
second-class  law.  The  chief  contention  of  the  inspectors  was  that 
the  exploitation  of  the  People's  United  States  Bank  and  of  Lewis' 
other  enterprises  in  the  Woman's  Magazine  and  Farm  Journal 
brought  them  within  the  prohibition'  of  the  statute  against  publica- 
tions designed  primarily  for  advertising  purposes.  Madden's 
knowledge  of  the  entire  publishing  industry  made  him  aware  that 
the  publishers  of  many  periodicals  of  the  highest  class  were  adver- 
tising in  their  columns  various  enterprises  of  their  own  to  a  far 
greater  extent  than  was  Lewis.  i\Iadden  knew  that  this  practice 
was  not  only  lawful,  but  was  protected  against  the  interference  of 
the  Department  by  the  uninterrupted  usage  of  the  publishing  indus- 
try and  the  unbroken  precedents  of  the  Department  since  the  pass- 
age of  the  Act  of  1879. 

The  inspectors  also  laid  great  stress  on  the  fact  that  the  revenue 
from  advertising  in  the  Lewis  publications  was  about  ten  times  as 
great  as  that  from  subscriptions.  They  pointed  out  that  not  a  single 
issue  of  the  Woman's  Magazine  could  be  brought  out  by  the  com- 
pany without  its  advertising  revenue.  They  deduced  the  conclusion 
that  this  publication  was  evidently  designed  primarily  for  adver- 
tising purposes.  This  argument  alone  betrays  the  utter  ignorance 
of  the  inspectors  of  the  most  elementary  principles  of  the  publish- 
ing business.  The  third  assistant  well  knew  that  there  are  very 
few,  if  any,  periodicals  in  the  United  States  which  could  be  operated 
without  advertising  revenue.  Many  other  facts  and  arguments 
adduced  by  the  inspectors  were  found  by  the  third  assistant  to  be 
wholly  irrelevant  to  the  question  of  the  rights  of  the  two  publica- 
tions to  the  second-class  mailing  privilege.  The  report  as  a  whole 
was  characterized  by  the  same  spirit  of  implacable  hostility,  and 
was  couched  in  the  same  language  of  passion  and  prejudice  as  that 
above  quoted  concerning  the  People's  Bank. 

This  document  was  handed  to  the  third  assistant  on  May  19,  1905. 
Several  conferences  with  the  postmaster-general  followed.  Madden 
states  that  he  drew  the  latter's  attention  to  the  irregularity  of  the 
entire  procedure.  He  referred  to  the  injunctions  and  the  accepted 
understanding  that  nothing  would  be  done  until  the  questions  in- 
volved in  the  court  procedure  were  settled.  While  the  matter  was 
thus  under  consideration,  on  May  31,  1905,  the  famous  "concerted 
action"  telegram  was  received  from  Inspector  Fulton  at  St.  Louis. 
The  purpose  of  this  was  to  hasten  action  by  the  Department  on  both 
the  inspectors'  reports.  It  was  addressed  to  the  chief  inspector,  but 
a  copy  was  furnished  the  third  assistant.     This  telegram  closes  with 


THE  DREYFUS  CASE  OF  AMERICA  5^5 

the  words,  "I  suggest  concerted  action  on  the  part  of  the  assistant 
attorney  and  third  assistant  on  reports  of  the  16th  inst."  The  16th 
Inst,  was  a  mistake.  The  reports  were  dated  the  17th.  The  receipt 
of  the  "concerted  action"  telegram,  and  especially  its  air  of  assur- 
ance, had  a  disturbing  effect.  Evidently  the  man  who  composed  and 
signed  it  had  little  doubt  that  the  recommendations  in  the  two  re- 
ports would  be  adopted. 

Madden  states  that  he  then  called  in  consultation  the  special 
assistant  attorney  jirovided  by  law  for  his  office.  It  was  decided  that 
under  the  circumstances  the  best  thing  to  do  was  to  cite  the  publish- 
ing company  to  show  cause  why  its  magazine  should  not  be  ruled 
out  of  the  second  class.  It  was  felt  that  it  would  not  be  well  for 
the  third  assistant,  now  that  he  had  pointed  out  the  irregularity  of 
this  action,  to  be  too  resistant.  On  the  same  day.  May  31,  1905,  the 
Post-Dispatch  extra  was  published  at  St.  Louis.  Immediately  on 
receipt  of  Fulton's  telegram  the  third  assistant  addressed  to  the 
postmaster-general  the  following  important  letter: 

Case  No.  52856-C.  Report  of  Postoffice  Inspectors  William  T.  Sullivan 
and  J.  L.  Stice,  dated  May  17,  1905,  on  the  Woman's  Magazine  and  the 
Woman's  Farm  Journal,  of  St.  Louis,  Mo.  Approved  by  Inspector-in- 
Charge  R.  M.  Fulton,  May  17,  1905. 

General  Cortelyou:  In  this  case  of  the  Woman's  Magazine  and  the 
Woman's  Farm  Journal,  of  St.  Louis,  regarding  which  we  have  had  some 
conferences,  I  beg  to  inform  you  that  after  j'ou  left  the  city  Monday  I  de- 
cided, because  of  the  circumstances,  to  cite  the  publisher  to  show  cause 
why  those  two  publications  should  not  be  excluded  from  the  second  class  of 
mail  matter.    .Separate  citations  were  issued.     *     *     * 

I  doubt  whether  this  action  is  in  accordance  with  your  temperate  and 
judicial  method  of  dealing  with  such  mutters.  It  is  not  in  keeping  with 
the  policy  of  caution  and  avoidance  of  immoderation  which  has  lieretofore 
prevailed  in  this  office  and  which  has  been  generally  successful  in  dealing 
with  abuses  of  the  second-class  mailing  privilege.  I  was  prompted  to  take 
this  action  by  the  earnestness  with  which  the  charges  against  these  publi- 
cations are  pressed  in  the  inspectors'  report,  although  a  very  great  deal  of 
the  evidence  on  which  it  is  based  has  no  relevancy  to  the  question  of  post- 
age rates.  This  view  is  concurred  in  by  the  special  counsel  for  the  De- 
partment, on  this  class  of  cases.  I  was  also  influenced  by  the  telegram  of 
Insi>ector  Fulton,  dated  May  31,  wherein  he  urged  "concerted  action"  on 
the  part  of  assistant  attorney  and  third  assistant.     *     *     * 

I  do  not  imderstand  why  the  questions  of  the  issuance  of  the  fraud  or- 
der, on  the  one  hand,  and  the  right  of  the  publications  to  a  particular 
classification,  on  the  other,  should  be  the  subject  of  "concerted  action,"  but  1 
did  not  wish  to  leave  any  obstacle  in  the  way  of  the  inspectors  establishing 
the  case  which  they  appear  to  conceive  themselves  able  to  make.  I  deemed 
it  improper,  however,  to  act  upon  their  recommendation  that  the  second- 
class  privilege  of  the  Woman's  Magazine  be  summarily  taken  away.  That 
publication  has  been,  in  fact,  accorded  that  privilege,  and  is  in  the  enjoy- 
ment of  it  in  the  customary  manner.  The  exact  form  of  the  authority  is, 
in  law,  immaterial.  I  am  advised  by  coimsel  that  it  would  be  contrary  to 
the  statute  requiring  hearings  in  such  cases,  to  annul  the  privilege  sum- 
marily. This,  I  have  ascertained,  is  also  the  view  of  the  office  of  the  as- 
sistant attorney-general.  It  is  certainly  in  accordance  with  the  dictates 
of  justice.  A  summary  denial  of  this  privilege,  as  recommended,  would 
mean  the  sudden  destruction  of  a  business  valued  at  upward  of  a  million 
dollars  and  the  rendering  idle,  if  not  useless,  of  a  plant  in  which  over  $400,- 


646  THE  SIEGE  OF  UNIVERSITY  CITY 

000  appears  to  have  been  invested.  The  act  of  March  3,  1901,  was  designed 
to  prevent  just  such  attempts  to  strilie  down  established  enterprises  with- 
out warning.  I  could  not  permit  myself  to  be  hurried  beyond  the  law. 
0^ving  to  the  unusual  course  of  procedure  in  this  case,  it  maj  become  neces- 
sary at  the  hearing,  on  June  17,  to  have  the  inspectors  present  to  furnish 
the  evidence  which  they  summarized  in  their  report. 

THE  HEARING  BEFORE   MADDEN. 

In  consonance  with  this  memorandum  to  the  postmaster-general, 
and  citation  to  the  publishers,  a  hearing  was  granted  to  the  Lewis 
Publishing  Company  on  the  rights  of  its  publications  to  the  second- 
class  mails.  This  was  taken  up  at  the  close  of  the  hearing  before 
Goodwin  in  the  case  of  the  People's  Bank.  The  latter  hearing  occu- 
pied the  entire  day  of  June  16  and  the  forenoon  of  June  17.  It 
will  be  remembered  that  it  was  conducted  in  secret.  No  transcript 
of  the  evidence  taken  was  made.  The  afternoon  of  June  17  was 
given  to  the  hearing  before  Madden.  This  was  conducted  openly. 
All  the  proceedings  were  taken  down  in  shorthand.  The  evidence 
submitted  is  of  record.  The  substance  of  Lewis'  statement  on  this 
occasion  has  been  given  in  a  previous  chapter,  entitled,  "The  Rise 
of  the  Woman's  Magazine."  The  third  assistant  reserved  his  deci- 
sion and  extended  to  Lewis  the  privilege  of  submitting  additional 
arguments  in  writing.  Accordingly,  on  June  22,  Lewis  submitted  a 
written  brief.  This  brief  and  accompanying  exhibits,  together  with 
the  evidence  submitted  at  the  hearing,  Avere  digested  by  the  third 
assistant,  with  the  assistance  of  his  special  counsel.  His  final  deci- 
sion was  adverse  to  the  inspectors.  The  right  of  both  publications 
to  be  carried  in  tlie  second-class  mails  was  sustained.  Madden,  in 
his  statement  to  the  Ashbrook  Committee,  said: 

On  July  8  the  third  assistant,  with  the  aid  of  the  special  assistant  at- 
torney provided  for  his  office,  rendered  a  detailed  report  touching  the 
right  of  the  magazines  to  continue  in  the  mails.  This  was  made  only  be- 
cause of  tlie  unusual  circumstances  of  the  case  and  the  apparent  excep-- 
tional  interest  of  the  postmaster-general.  In  regular  practice  the  post- 
master-general holds  aloof  from  such  matters,  and  is  thus  free  and  open- 
minded  to  come  into  them  in  the  event  of  an  appeal.  *  *  *  The  post- 
master-general, however,  had  taken  this  case  in  his  own  hands  out  of  the 
bureau  having  lawful  jurisdiction.  He  managed  it  from  tlie  hour  he  came 
into  his  office  to  the  hour  he  went  out.  Fulton  and  his  subordinates 
were  acting  at  all  times  under  his  instructions. 

The  proceeding  up  to  the  time  at  which  the  inspectors'  report  was  re- 
ceived was  wholly  irregular.  I  called  the  postmaster-general's  attentron  to 
this,  but  manifestly  a  subordinate  could  not  step  in  and  ask  him  to  account 
for  his  actions.  *  *  *  Previous  postmasters-general  had  been  very 
particular  not  to  interfere,  because  it  was  essential  that  the  reform  which 
I  had  in  hand  should  be  conducted  with  due  consideration  for  the  morals 
and  justice  of  it.  My  report  of  July  8  to  the  postmaster-general  was, 
therefore,  most  imusiud,  but  it  dealt  with  the  subject  very  thoroughly  and 
again  emphasized  the  irregular  course  of  procedure  which  had  been  fol- 
lowed.    I  will  now  read  extracts  from  that  report: 

?rAnnEN-'s  report  to  cohtei.you. 

"It  is  especially  important  to  understand  that  the  question  of  fraud  and 
the  question  of  postage  rates  have  no  relation  to  each  other.  Each  must 
be  decided  independently  of  the  other,  upon  the  facts  respectively  relevant. 
*    *    *     It  is,  therefore,  of  no  relevance  upon  the  question  of  classification 


THE  DREYFUS  CASE  OF  AMERICA  547 

that  these  publications  are  charged  to  be  aids  in  a  scheme  to  defraud. 
These  cases,  so  far  as  my  jurisdiction  extends,  must  be  decided  upon  the 
evidence  indicating  the  primary  design  of  tlie  publication  themselves. 
*  *  *  This  reasoning  (that  in  the  inspectors'  report)  would  exclude 
practically  every  daily  newspaper  and  every  magazine  from  the  second 
class.  There  is  hardly  a  newspaper  or  periodical  of  the  higher  class  in 
which  the  annual  cost  of  production  is  not  greatly  in  excess  of  the  reve- 
nue from  subscriptions  alone.     *     *     ♦ 

"A  critical  examination  of  the  issues  of  the  Woman's  Magazine  and  the 
Woman's  Farm  Journal  shows  that  the  space  devoted  to  the  advertising, 
as  compared  with  the  space  devoted  to  reading  matter,  is  not  greater,  on 
the  average,  than  that  in  the  recognized  periodicals.  A  careful  comparison 
proves  that  the  total  amount  of  advertising  carried  in  the  publications  in 
question  is  not,  on  the  whole,  greater  in  proportion  than  that  carried  by 
Harper's,  McClure's  and  Scribner's.  Compare  the  June,  1905,  number  of 
the  Woman's  Magazine  with  the  Ladies'  Home  Journal  for  the  same  month. 
The  Ladies'  Home  Journal  is  approximately  twice  the  size  of  the  Woman's 
Jlagazine.  The  latter  contains  forty-three  columns  or  about  seven  thousand 
agate  lines  of  advertising,  as  against  ninety-five  columns,  or  nineteen  thou- 
sand lines,  in  the  former.  There  is  no  substantial  difference  in  the  rela- 
tive amount  of  advertising  in  the  two. 

"With  respect  to  the  text  being  a  mere  cover  for  the  advertising,  it  would 
appear  that  the  reading  matter,  although  not  of  the  highest  literary  merit, 
is  prepared  specially  for  these  publications.  *  *  *  In  the  absence  of 
any  evidence  indicating  that  the  subscribers  do  not  pay  for  the  paper  on 
its  merits,  it  is  practically  impossible  to  say  that  the  reading  matter  is 
intended  merely  as  a  mask  for  the  advertising. 

"The  Woman's  Magazine  is  a  leading  medium  for  mail  order  advertising. 
In  the  following  list  composed  by  the  Rowell  Advertising  Agency  and  pur- 
porting to  name  the  six  best  mail-order  publications  in  the  country,  it  is 
found  third;  Everybody's  Magazine,  Ladies'  Home  Journal,  Woman's  Maga- 
zine, Saturday  Evening  Post,  McClure's  Magazine,  Collier's  Weekly.  *  *  * 
Upon  the  foregoing  state  of  facts  alone,  without  an  analysis  of  the  circu- 
lation and  without  evidence  as  to  whether  the  claimed  list  of  subscribers,  is, 
as  a  matter  of  fact,  legitimate  in  its  entirety  as  required  by  law,  *  *  * 
I  do  not  feel  warranted  in  holding  that  the  Woman's  Magazine  or  Farm 
Journal,  as  distinguished  from  publications  of  the  same  general  class,  are 
primarily  designed  for  advertising  purposes  in  general  or  to  specially  ad- 
vertise the  other  businesses  of  the  publishing  company.     *     *     * 

"If  you  direct  it,  an  investigation  along  the  usual  lines  pursued  by  this 
bureau  can  be  carried  forward  in  respect  of  these  publications;  but  in  my 
judgment  such  a  course  can  best  be  followed  later,  when  the  determination 
of  the  Department  in  the  cases  of  some  other  mail  order  publications,  which 
arc  far  clearer  and  more  flagrant  abuses  of  the  second-class  privilege,  and 
which  are  now  before  the  courts,  has  received  judicial  approval.  These 
are  not  clear  cases.  The  reform,  if  it  is  to  be  sustained,  must  be  carried 
on  by  seeking  to  establish  our  contentions  only  where  they  are  palpably 
correct.  In  view  of  these  facts,  I  recommend  that  these  cases  be  closed 
bT  a  letter  from  the  third  assistant  postmaster-general  to  the  postmaster 
at  St.  Louis." 

The  third  assistant's  report  also  contains  the  statement  that,  at 
the  hearing  on  June  17,  the  representatives  of  the  company  stated 
their  entire  willingness  to  comply  with  the  wishes  of  the  Depart- 
ment. If  the  space  in  their  publications  devoted  to  advertising 
seemed  to  be  too  great,  it  would  be  reduced,  they  said,  to  meet  any 
rule  which  the  Department  would  promulgate.  If  the  advertising 
space  devoted  to  other  businesses  in  which  the  company  was  con- 


648  THE  SIEGE  OF  UNIVERSITY  CITY 

cerned  seemed  to  be  too  great,  it  would  be  promptly  reduced  or 
eliminated.  If  the  subscription  rate  of  the  magazines  appeared  to 
be  too  low,  it  would,  immediately,  upon  notice,  be  raised  to  any 
acceptable  figure.     Just  before  closing,  Madden's  report  states: 

It  is,  therefore,  important  that  the  third  ussistant  postmaster-general 
should  reach  a  judgment  only  after  careful  consideration  of  the  evidence 
which  experience  has  shown  to  be  relevant  and  material.  Especially  should 
he  do  so  without  haste  or  bias,  and  uninfluenced  by  any  preconceived  notion. 

General  Madden,  in  his  statement  to  the  committee,  continued: 
The  postmaster-general's  attention  had  now  been  called,  in  the  most 
forceful  way,  to  the  irregularities  in  handling  the  case.  Indirectly  he  had 
been  told  that  his  procedure  was  unlawful,  and  that  if  anything  were  to  be 
done  concerning  the  two  publications  of  the  company,  it  should  be  done 
in  the  regular  order.  The  unusual  lines  of  the  procedure  so  far  were 
jiointed  out.  The  record  did  not  look  well.  The  "concerted  action"  pro- 
gram had  failed.  Now  comes  the  postmaster-general  with  a  letter  of  July 
12,  a  reply  to  the  July  8  report.     I  quote  it  in  its  entirety: 

THE   USUAL   LIXES. 

"Case:  Woman's  Magazine  (C.  D.  2G575)  and  Woman's  Farm  Journal 
(C.  D.  No,  58208),  published  at  St.  Louis,  Mo.,  by  the  Lewis  Publishing 
Company. 

"Please  have  investigation  made  along  the  usual  lines  pursued  by  your 
bureau  to  determine  whether  the  Woman's  Magazine  and  the  Woman's 
Farm  Journal  are  entitled  to  transmission  at  second-class  rates.  It  is  de- 
sired that  you  will  have  this  investigation  completed  as  promptly  as  may 
be  consistent  with  your  general  practice  and  will  bring  the  results  to  my 
attention.  Lentil  such  investigation  shall  have  been  completed,  it  does  not 
appear  necessary  to  give  the  postmaster  at  St.  Louis  the  instructions  which 
you  suggest  in  your  memorandum  of  July  8.  Continuance  of  the  present 
practice  will  accomplish  the  same  result." 

From  now  on  the  case  was  to  be  handled  "along  the  usual  lines"  pursued 
by  the  third  assistant's  bureau.  But  why  not  inform  the  postmaster  at  St. 
Louis  and  through  him  the  publishing  company?  That  was  the  practice, 
the  "usual  lines."  The  company  had  been  cited  to  show  cause  why  its 
magazines  should  not  be  ruled  out  of  the  second  class.  It  had  been  put  to 
considerable  expense  to  defend  its  rights.  The  report  of  July  8  contained  a 
copy  of  the  letter  which  the  third  assistant  had  prepared  to  send  to  the 
local  postmaster.  It  provided  that  he  should,  in  the  regular  way,  inform 
the  publishing  company  of  the  decision  which  had  been  made  on  the  hearing 
of  .Time  17,  1905.  But  by  direct  order,  contained  in  this  July  12  letter,  the 
postmaster-general  proposed  to  leave  the  company  in  ignorance.  The  cir- 
sumstance,  coupled  with  what  had  gone  before,  was  bound  to  raise  suspicion 
of  an  ulterior  purpose. 

THE    BROMWELL-WEINSCHENK    AGREEMENT. 

The  case  of  the  Woman's  Magazine  and  the  Woman's  Farm 
Journal  was  now  in  the  hands  of  the  third  assistant,  to  be  handled 
along  the  "usual  lines"  of  his  bureau.  The  inspectors'  recommen- 
dation of  a  fraud  order  against  the  People's  Bank  had  been  ap- 
proved by  Goodwin,  and  the  fraud  order  had  been  issued  by  the 
postmaster-general.  But  their  recommendation  for  "concerted 
action"  had  been  ignored  by  Madden.  The  case  had  then  been 
turned  over  to  him  by  the  postmaster-general  to  be  handled  in  the 
same  manner  as  those  of  other  publications  of  the  mail  order  class. 

The  important  fact  to  be  considered  here  is  that  if  there  had 
been  no  further  interference  by  the  inspectors  or  the  postmaster- 


THE  DREYFUS  CASE  OF  AMERICA  649 

general,  this  case  would  have  been  closed  by  the  decision  of  the 
third  assistant.  There  could  have  been  no  possibility  of  a  renewal 
of  the  charges  until  the  following  April,  for  the  postmaster-general, 
acting  upon  the  suggestion  of  the  third  assistant,  had  entered  into 
an  agreement  to  formulate,  on  or  before  January  1,  1906,  a  com- 
plete new  set  of  rules  for  the  information  and  guidance  of  pub- 
lishers touching  their  second-class  privileges.  He  had  further 
agreed  to  take  no  further  steps  against  these  publications  until 
these  rules  had  been  issued  and  opportunity  aiforded  publishers  to 
adjust  their  business  practices.  These  rules  when  issued  were 
known  as  Circular  XXV.  They  were  promulgated  on  December  16, 
1905,  but  did  not  become  effective  until  after  nearly  four  months' 
notice  to  the  publishing  industry,  viz.,  on  April  1,  next  following. 

The  occasion  of  this  agreement  was  the  request  in  writing  of 
Attorneys  Bromwell  and  Weinschenk,  representing  the  group  of 
nineteen  publishers  in  the  injunction  proceedings.  They  proposed 
to  dismiss  their  suits  on  consideration  that  any  order  previously 
made  by  the  postmaster-general  excluding  from  the  second-class 
privileges  any  person  or  publication  engaged  in  the  mail  order 
publication  business  (whether  parties  to  these  suits  or  not)  should 
be  dismissed.  It  was  stijjulated  that  no  further  action  should  be 
taken  against  any  such  publications  until  after  January  1,  1906.  To 
this  the  postmaster-general  acquiesced  in  writing.  His  letter,  how- 
ever, contained  the  following  paragraph: 

From  the  foregoing,  it  is  not  to  be  understood  that  the  Department  will 
fail  to  act  before  January  1,  upon  any  specially  flagrant  case  of  an  abuse 
of  the  second-class  privilege,  where  the  interests  of  the  Government  re- 
quire prompt  action.  This,  however,  is  not  intended  to  imply  that  any  one 
of  the  publications  involved  in  the  injunction  proceedings  is  regarded  as 
specially  flagrant,  but  merely  that  the  Department  reserves  entire  liberty 
of  action  as  to  such  cases. 

Proceeding  with  his  statement  to  the  Ashbrook  Committee,  General 
Madden  says: 

The  situation  was  that  the  rules  of  the  Department  were  to  be  pub- 
lished for  the  guidance  of  publishers  and  time  was  to  be  allowed  before 
the  rigid  enforcement  thereof.  This  was  all  the  publishers  sought.  Of 
course,  the  rules  and  the  time  for  compliance  must  apply  to  all  publica- 
tions and  not  to  those  only  which  were  represented  by  Messrs.  Bromwell 
and  Weinschenk.  The  Department  had  no  authority  of  law  to  make  ex- 
ceptions. It  must  be  true,  too,  as  the  matter  stood,  and  imtil  the  rules  were 
published,  that  whatever  practices  were  in  vogue,  unless  they  constituted  a 
flagrant  violation  of  law,  would  not  be  objected  to  for  the  time  being. 

Two  days  later,  .July  21,  190,5,  the  third  assistant  postmaster-general  sent 
the  following  memorandum  to  the  postmaster-general.  This  communication 
shows  that  the  third  assistant  construed  the  promise  to  Bromwell  and 
Weinschenk  to  apply  to  the  Woman's  Magazine  and  Farm  Journal.  It 
says : 

"In  pursuance  of  the  direction  in  your  memorandum  of  July  12  to  have 
investigation  of  the  foregoing  cases  (Woman's  Magazine  and  Farm  Jour- 
nal) made  along  the  usual  lines  pursued  by  this  bureau,  I  have  assigned 
them  to  be  investigated,  in  connection  with  the  other  mail-order  publica- 
tions covered  by  your  letter  of  July  19,  to  Messrs.  Bromwell  and  Wein- 
schenk, which  outlines  the  policy  of  your  dealing  with  the  class  to  which 


660  THE  SIEGE  OF  UNIVERSITY  CITY 

they  belong.     In  the  meanwhile,  the  present  status  is,  as  you  direct,  un- 
changed.    No  instructions  have  been  given  to  the  postmaster  at  St.  Louis." 
The  postmaster-general  made  no   response  to  this  communication.     His 
silence  was  properly  construed  as  acquiescence. 

This  first  campaign  of  the  inspectors  against  the  AVoman's  Mag- 
azine and  Farm  Journal  thus  ended  in  failure.  Meantime  the  liti- 
gation for  an  injunction  against  the  fraud  order  and  the  receiver- 
ship proceedings  of  the  People's  Bank  were  taking  place  in  the 
Federal  and  State  courts  at  St.  Louis.  Lewis,  the  while,  was 
bitterly  criticising  the  inspectors  in  the  columns  of  the  Woman's 
Magazine,  and  in  circulars  to  the  stockholders  of  the  bank.  Such 
was  the  situation  when,  in  August,  1905,  one  I.  K.  Parshall,  a  dis- 
charged employee,  laid  an  information  before  the  inspectors  of  St. 
Louis,  accusing  the  Lewis  Publishing  Company  of  padding  the 
circulation  of  its  two  periodicals  by  metliods  which  were  in  violation 
of  the  postal  laws  and  regulations.  These  charges  were  made  in 
an  unsigned  written  memorandum,  said  to  have  been  presented  by 
Parshall  to  Inspector  Stice.  The  statement  of  Parshall  sustains 
the  same  relation  to  the  campaign  which  followed  against  the  Lewis 
Publishing  Company,  that  Nichols'  letter  to  Loeb  bears  to  the 
investigation  of  the  People's  United  States  Bank.  It  set  the  wheels 
of  departmental  machinery  in  motion. 

PARSHALL,   THE    INFORMER. 

The  part  played  by  Parshall  in  the  story  of  the  Siege  is  other- 
wise negligible.  His  charges  were,  in  substance,  that  the  Lewis 
Publishing  Company  was  systematically  violating  the  regulations 
of  the  Department,  which  then  limited  the  sample  copy  privilege  to 
one  hundred  per  cent,  or  a  number  equal  to  the  legitimate  list  of 
subscribers.  Parshall  averred  tliat  this  was  being  accomplished  by 
the  violation  of  another  regulation,  namely,  that  all  sample  copies 
should  be  plainly  marked  as  such  upon  the  exposed  surface  of  the 
wrappers.  He  advised  the  inspectors  that  the  company  made  use 
of  wrappers  of  different  colors  and  sizes  for  its  various  classes  of 
mailings.  By  means  of  this  key,  he  said,  the  alleged  illegitimate 
mailings  could  be  detected. 

Acting  upon  this  hint.  Inspector  Fulton  promptly  caused  the 
postal  autliorities  at  St.  Louis  to  reweigh  the  company's  mailings 
of  the  Woman's  Farm  Journal  for  September,  1905,  according  to 
the  classification  suggested  by  Parshall.  He  thus  arrived  at  the 
conclusion  that  about  one-half  of  the  circulation  of  that  publication 
was  illegitimate.  To  further  corroborate  Parshall,  Fulton  circu- 
larized sundry  lists  of  names  and  addresses  copied  from  the  wrap- 
pers of  the  Woman's  Farm  Journal  not  marked  as  sample  copies, 
but  which  were  suspected  of  being  samples  mailed  in  violation  of 
the  postal  rules.  From  the  responses  to  these  circulars  the  charges 
of  Parshall  appeared  to  be  confirmed.  Fulton  thereupon  called  a 
consultation  oY  the  Triumvirate.  A  decision  was  reached  that  the 
officers  of  the  Lewis  Publishing  Company  were  guilty  of  criminal 


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THE  DREYFUS  CASE  OF  AMERICA  653 

conspiracy  to  defraud  the  Government  of  postal  revenue.  It  was 
further  decided  that  an  information  to  that  effect  should  be  laid 
before  the  Federal  grand  jury  as  soon  as  sufficient  evidence  to  sus- 
tain an  indictment  could  be  procured.  Fulton  thereupon,  on  Septem- 
ber 20,  forwarded  a  special  report  of  these  circumstances  to  the  chief 
inspector  at  Washington.  He  indicated  the  volume  of  the  irregular 
mailings  of  the  Woman's  Farm  Journal,  as  shown  by  reweighing  at 
the  St.  Louis  postoffice,  according  to  the  key  given  by  Parshall.  He 
then  remarks:  "While  it  may  not  be  susceptible  of  correct  and  legal 
proof,  we  believe  a  still  ranker  showing  may  be  proved  as  to  the 
Woman's  Magazine."  We  shall  see  that  precisely  the  contrary 
was,  in  fact,  the  case. 

THE    HOLD-UP   OP  THE    WOMAN's   FARM    JOURNAL. 

Fulton  again  rej^orted  to  Washington  on  October  10  to  the  effect 
that  the  mailing  of  the  Woman's  Farm  Journal  for  October  had 
then  been  practically  completed.  He  remarked  that  the  company 
did  not  seem  to  be  advised  of  the  detective  work  being  done  by  the 
postal  authorities,  but  was  apparently  still  following  the  system 
described  by  Parshall,  He  then  proceeds  to  make  the  following 
astounding  statement:  "In  view  of  these  developments  *  *  * 
the  postmaster  has  held  up  *  *  *  sample  copies  in  manila 
wrappers,  whether  marked  as  such  or  not,  in  excess  of  what  appears 
to  be  his  legitimate  subscription  this  month,  which  is  a  little  over 
one  hundred  and  fifty-six  thousand."  He  adds  that  so  far  there  had 
been  held  up  approximately  two  hundred  thousand  copies.  This 
number  was  afterwards  increased  to  over  three  hundred  thousand, 
or  approximately  half  of  the  total  mailings.  Thus,  without  any 
notice  whatever  to  the  Lewis  Publishing  Company,  one-half  of  an 
edition  of  a  periodical  which,  for  twenty-six  years,  had  uninter- 
ruptedly enjoyed  the  second-class  privilege,  was  deliberately  im- 
pounded, notwithstanding  a  deposit  had  been  made  to  cover  the 
postage  and  the  full  amount  had  been  charged  against  the  company 
at  the  usual  second-class  rate.     Fulton's  letter  proceeds: 

The  facts  have  been  submitted  to  the  United  States  attorney.  He  states 
that  he  thinks  the  case  should  be  prepared  for  presentation  to  the  next 
gr£  nd  jury,  which  meets  about  November  1,  looking  to  the  indictment  of 
Lewis,  the  president  of  the  company,  and  F.  J.  Cabot,  its  secretary,  and 
editor  of  the  journal.  To  prove  the  case  completely,  it  will  be  necessary 
to  connect  Cabot  and  Lewis  in  the  scheme  and  to  face  them  with  the  evi- 
dence and  obtain  some  statement  from  them.  It  will  be  necessary  further, 
to  make  the  case  complete,  for  the  inspectors  and  some  clerks  from  the 
postoffice  to  visit  the  publishing  company  at  an  early  date,  before  there  is 
time  for  the  manipulation  of  his  subscription  cards,  and  count  the  sub- 
scription cards  for  the  Farm  Journal  and  the  Magazine.  It  is  this  latter 
feature  that  I  desire  you  to  consider,  and  in  view  of  the  fact  that  it  has 
been  indicated  by  you  that  we  should  be  careful  not  to  interfere  with  any 
investigation  by  other  bureaus  of  the  Department,  and  in  view  of  the  fur- 
ther fact  that  permission  to  examine  the  subscription  cards  and  mailing  list 
of  the  Farm  Journal  and  Woman's  Magazine  may  be  denied  us  by  Lewis, 
I  desire  that  you  advise  us,  after  consultation,  as  to  whether  there  is  ob- 
jection to  our  "taking  the  action  stated.    It  will  have  to  be  taken  soon  after 


554  THE  SIEGE  OF  UNIVERSITY  CITY 

the  mailings  are  completed,  and  I  will  probably  wire  you  Wednesday  or 
Thursday.  Should  I  do  so,  I  will  give  you  the  total  mailings  for  this  month 
and  ask  you  for  instructions  as  to  the  last  proposed  action. 

On  October  12  Fulton  was  reassured  by  the  receipt  of  the  follow- 
ing telegram  from  Vickery:  "No  other  investigation  pending. 
Take  such  steps  as  you  may  deem  proper.  Postmaster-general 
fully  advised."  General  JNIadden  comments  on  this  situation  at  the 
Ashbrook  Hearings  in  the  following  language: 

It  will  be  remembered  that  on  July  12,  previous,  the  postmaster-general 
had  apparently  consented  to  the  handling  of  the  case  along  the  "usual 
lines."  These  were,  under  the  Bromwell-Weinschenk  agreement,  to  formu- 
late and  publish  for  the  guidance  of  publishers  the  rules  under  which  the 
LVpartment  would  operate.  It  will  be  remembered,  too,  that  at  the  hearing 
on  June  17,  1905,  the  company  had  agreed  to  make  any  change  in  its  prac- 
tices or  its  publications  to  which  the  Department  objected.  *  *  *  That 
hearing  disclosed  no  reason  to  find  fault  with  them.  The  postmaster-general 
had  accepted  the  finding,  but  directed  that  no  notice  be  given.  Receiving  no 
word  from  the  Department  or  the  local  postmaster  as  to  the  decision  made 
upon  the  hearing,  the  company  was  bound  to  assume  that  it  was  not  seri- 
ously at  fault,  or  that  the  matter  was  still  pending. 

On  October  14  the  final  draft  of  the  proposed  rules  had  for  some  time 
been  in  the  possession  of  the  postmaster-general  awaiting  his  O.  K.  before 
publication.  On  that  date  the  third  assistant  received  a  communication  from 
the  Lewis  Publishing  Company  at  St.  Louis  complaining  that  the  postoffice 
authorities  were  again  at  its  books  and  papers.  This  move  upon  the  com- 
pany, while  the  postmaster-general  was  iiolding  up  the  publication  of  the 
rules,  could  have  but  one  meaning.  The  program  for  "concerted  action" 
having  failed,  the  purpose  was  to  be  carried  out  by  another  process.  The 
third  assistant,  on  the  receipt  of  the  company's  letter,  dispatched  it  to  the 
postmaster-general  with  a  sharp  letter  of  transmittal.  Owing  to  its  im- 
portance, this  memorandum  is  quoted  in  full: 

madden's  protest  to   CORTEI-YOU. 

"Within  the  last  half-hour  I  have  received  a  special  delivery  letter  from 
Mr.  E.  G.  Lewis,  publisher  of  the  Woman's  Magazine  and  the  Woman's 
Farm  Journal,  of  St.  Louis.  The  following  is  a  copy  of  the  letter:  *At 
6:00  p.  m.,  October  11,  we  received  second-class  entry  blanks  from  the  post- 
master of  St.  Louis  with  a  demand  that  they  be  completely  filled  out  and 
leturned  by  this  evening,  October  12.  *  *  *  I  do  not  know  the  purpose 
of  this  sudden  demand,  but  I  have  perfect  faith  that  in  your  Department 
no  action  will  be  permitted  that  savors  of  persecution,  and  I  simply  take 
the  liberty  of  advising  you  of  this  matter  so  that  we  will  get  a  square  deal.' 

"I  find  from  investigation  that  the  classification  division,  where  action  of 
the  kind  complained  of  would  originate,  did  not  initiate  this  action.  The 
postmaster  must,  therefore,  be  moving  of  his  own  volition  or  under  the  di- 
rection of  some  otlier  officer.  The  Lewis  publications  are  of  the  mail  order 
type,  many  of  which  are  alleged  to  be  abuses  of  the  second-class  privilege, 
because  of  being  'designed  primarily  for  advertising  purposes  or  for  free 
circulation,  or  for  circulation  at  nominal  rates.'  A  definite  plan  or  policy 
for  dealing  with  the  abuses  in  this  class  has  lately  been  determined  upon 
as  one  of  the  features  of  the  general  reform  of  abuses  of  the  second  class 
of  mail  matter.  It  was  the  result  of  conferences  between  the  publishers 
and  the  third  assistant  postmaster-general  and  yourself.  One  of  its  fea- 
tures was  the  promised  pul>lication  of  the  circular  regarding  lists  of  sub- 
scril)ers,  etc.,  which  is  now  in  your  hands.     *     *     * 

"There  is  nothing  in  the  law  prohibiting  mail  order  papers  as  such.  The 
rules  heretofore  in  effect  have  not  furnislied  any  satisfactory  and  effective 
guide,  capable  of  uniform  and  general  application  upon  the  question  of 
primary  design,  free  circulation,  or  circulation  at  nominal  rates.     Unless 


THE  DREYFUS  CASE  OP  AMERICA  656 

rules  and  practices  upon  them  be  general  and  uniform  in  their  operation, 
Ihey  manifestly  can  not  stand  either  the  test  of  public  criticism  or  judicial 
scrutiny.  Throughout  my  dealing  with  this  class  of  cases,  and  for  that 
matter,  with  all  others,  it  has  been  my  aim  to  avoid  the  slightest  appear- 
ance of  persecution  or  precipitate  action  of  any  kind,  by  the  singling  out  of 
one  publisher  for  treatment  in  advance  of  those  in  his  class.  It  is  this  policy 
which  is  the  cornerstone  of  the  reform.  Without  it  we  could  not  have  suc- 
ceeded. *  *  *  The  action  mentioned  in  Mr.  Lewis'  letter  was  not  initi- 
ated by  this  office,  to  which,  by  the  Postal  Laws  and  Regulations,  has  been 
assigned  the  duty  of  dealing  with  the  classification  of  mail  matter.  In  my 
memorandum  of  July  8,  last,  relative  to  the  prior  action,  which  likewise 
was  not  initiated  bj^  this  office,  I  suggested  that,  if  you  wished,  an  investiga- 
tion might  be  carried  on  here  in  harmony  with  the  general  practice.  To 
this  you  assented  in  a  memorandum  dated  July  12.  Later,  in  response  to 
my  verbal  inquiry,  you  stated  that  you  did  not  care  to  have  the  case  taken 
up  out  of  its  natural  order.  In  view  of  this,  I  am  somewhat  at  a  loss  to 
know  how  to  answer  Mr.  Lewis'  inquiry,  and  shall  await  your  instructions." 
The  postmaster-general  made  no  response  to  this  communication. 

THE    inspectors'    COUNT    OF    THE    SUBSCRIPTION    CARDS. 

The  way  having  been  cleared  by  Vickery's  telegram,  Fulton,  on 
October  13,  detailed  the  same  inspectors,  Stice  and  Sullivan,  who 
had  scrutinized  all  of  Lewis'  aiFairs  the  previous  spring  and  had 
recommended  that  the  second-class  privilege  be  summarily  with- 
drawn from  his  publications,  to  conduct  this  further  investigation. 
He  also  detailed  to  assist  them  Inspectors  John  D.  Sullivan  and 
W.  L.  Reid.  Inspector  Stice  delivered  the  following  letter  signed 
by  Fulton  and  addressed  to  Lewis  and  Cabot,  jointly: 

The  bearers,  Postoffice  Inspectors  J.  L.  Stice,  W.  T.  Sullivan,  J.  D.  Sul- 
livan, and  W.  L.  Reid,  have  been  detailed  to  make  an  immediate  investiga- 
tion of  the  subscription  lists  of  the  Woman's  Farm  Journal  and  Woman's 
Magazine,  published  by  your  company. 

The  developments  of  this  second  investigation  of  the  Lewis  Pub- 
lishing Company  may  be  briefly  summarized.  The  first  step  taken 
by  the  inspectors  was,  by  arrangement  with  Lewis,  to  make  a  count 
of  the  subscription  card  files,  constituting  the  mailing  lists  of  the 
Woman's  Magazine  and  Farm  Journal.  A  detail  of  fifty-four 
clerks  was  assigned  from  the  St.  Louis  postoffice  for  this  purpose. 
The  count  was  begun  on  the  afternoon  of  October  13,  and  com- 
pleted on  the  afternoon  of  October  15.  In  view  of  the  two  adverse 
reports  of  the  inspectors,  on  May  17  previous,  and  the  subsequent 
developments,  the  presence  of  such  a  large  body  of  postoffice  clerks 
and  inspectors  was  calculated  to  excite  distrust  and  alarm.  The 
attitude  of  the  inspectors  was  suspicious  and  hostile.  Friction 
developed  between  them  and  the  employees  of  the  Lewis  Publishing 
Company.  Acting  on  the  confession  of  Nichols  that  he  had  played 
a  trick  on  Inspectors  Harrison  and  Holden,  in  1901,  by  juggling 
the  card  files  of  the  Winner  in  such  a  way  that  a  portion  of  the 
list  was  counted  a  second  time,  they  demanded  permission  to  seal 
the  doors  of  the  room  in  which  the  subscription  cards  were  kept  in 
such  wise  that  the  company  could  have  no  access  to  them  in  their 
absence.     They  declined  to  accept  any  suggestions  from  Lewis  C" 


556  THE  SIEGE  OF  UNIVERSITY  CITY 

his  associates  as  to  the  manner  of  conducting  their  investigation.  In 
short,  they  conveyed  to  the  officers  of  the  company  the  impression 
that  they  were  regarded  as  criminals. 

For  the  purpose  of  their  count  the  inspectors  distinguished  be- 
tween current  paid-in-advance  subscriptions  and  expirations,  that 
is,  subscriptions  more  than  twelve  months  old  which  had  not  been 
specifically  renewed.  The  result  showed  the  following  figures: 
For  the  Woman's  Magazine,  current  subscriptions,  639,901 ;  ex- 
pired subscriptions,  541,792;  for  the  Woman's  Farm  Journal,  cur- 
rent subscriptions,  141,328;  expirations,  140,000.  In  arriving  at 
these  figures  the  inspectors  ignored  even  the  expirations  of  the 
current  month.  They  proceeded  upon  the  theory  that  the  company 
was  not  entitled  to  count  as  legitimate  subscriptions,  within  the 
meaning  of  the  law,  a  single  subscription  beyond  the  paid-in-ad- 
vance subscription  period  unless  it  had  been  specifically  renewed. 
As  the  entire  controversy  touching  the  second-class  privilege  of  the 
two  magazines  hinges  upon  this  proposition,  it  is  imjDortant  that  this 
fact  should  be  noted  and  kept  in  mind. 

THE    CONFERENCE    IN    WYMAN's    OFFICE. 

The  next  step  taken  by  Fulton,  as  proposed  in  his  letter  to  Vick- 
ery,  was  to  confront  Lewis  with  the  evidence  against  him  and  de- 
mand an  explanation.  Therefore,  on  November  11,  the  St.  Louis 
postmaster  telephoned  Lewis  to  come  to  his  office  for  a  personal  in- 
terview. There  were  present  Inspectors  Stice  and  Reid,  Post- 
master Wyman  and  his  assistant,  a  stenographer,  and  Lewis.  A 
partial  stenographic  transcript  of  what  took  place  is  of  record. 
It  opens  thus: 

Postmaster  Wyman:  We  have  asked  you,  Mr.  Lewis,  to  come  down  here 
and  have  a  talk  with  us,  because  we  think  the  time  has  arrived  when  we 
should  receive  from  you  a  statement,  or  explanation,  in  regard  to  your 
mailings  of  the  October  number  of  the  Woman's  Farm  Journal. 

Mil.  Lewis:     In  what  particular? 

Mr.  Stice:  In  regard  to  your  manila  wrappers.  We  are  now  holding 
about  three  carloads  of  the  Woman's  Farm  Journal  in  manila  wrappers. 

]Mr.  Lewis:     Are  jou  doing  that  by  instructions  from  Washington? 

Mr.  Stice:  As  far  as  the  inspectors  are  concerned,  the  investigation 
of  this  entire  matter  is  placed  in  our  hands  on  instructions  from  the 
inspectors'  department  in  Washington. 

Mr.  Lewis:  Did  you  receive  these  instructions  from  the  third  assis- 
tant  postmaster-general? 

Mr.  Stick:     No. 

Mr.  Lewis:  I  understand,  then,  that  these  three  carloads  of  the  October 
issue  of  the  Woman's  Farm  Journal  are  being  held  on  Postmaster  Wyman's 
responsibility? 

Mr.  Stice:  Yes;  but,  by  instructions  from  the  postoffice  inspeetor-in- 
charge,  Mr.  R.  IVL  Fulton. 

Mr.  Lewis:  The  postage  for  these  three  carlofids  has  been  accepted  and 
a  receipt  given  us,  guaranteeing  the  delivery  of  the  papers,  has  it  not? 

Mr.  Stice:    No,  the  receipt  does  not  guarantee  anything  of  the  kind. 

Lewis  was  then  questioned  in  some  detail  as  to  the  alleged  irregu- 
lar mailings.  He  replied  that  he  could  not  give  particular  infor- 
mation without  consulting  liis  subordinates  and  the  records.     In  this 


Newspaper  photographs  of  E.  G.  Lczvis  at  various  crises  of  his  career 

Numbers  5   and  9  were   published  in   connection    with    announcements   of   the    fraud 

order  against  tlie  bank.     Numbers  s,  4,  6  and  10  were  published  during  Lewis'  first  trial 

before  Judge  Carhmd.     Numbers  I  and  8,  during  the  second  trial  before  Judge  Rincr. 

humber  s  commemorates  ihc  reorganization  of  the  Bank  as  the  Peoples'  Savings  Trust 

Company.     Number  7,   the  purchase  of  the  .S'f.   Louis  Star 


i^:_jJS_^ 


THE  DREYFUS  CASE  OF  AMERICA  569 

connection  he  made  a  statement  to  the  effect  that,  as  is  the  case  with 
the  executive  head  of  most  large  publishing  companies,  he  had  little 
or  no  personal  knowledge  of  the  details  of  the  subscription  de- 
partment.   He  said: 

I  will  state  that  I  have  had  practically  no  knowledge  of  the  mailing  or 
subscription  rules  until  a  comparatively  recent  date.  That  whole  matter 
has  been  in  charge  of  the  heads  of  the  departments.  Since  this  matter 
came  up  I  am  looking  after  them  myself.  I  know  that  on  some  issues  of 
the  magazine  certain  kinds  of  wrappers  have  been  used  on  special  classes 
of  mail.  What  they  are  so  used  for  I  could  not  state  without  looking  into 
the  matter.  You  state  that  you  have  about  three  carloads  of  the  October 
issue  in  manila  wrappers.  I  could  not  positively  say,  without  looking  it 
up,  what  class  of  mail  they  are  or  whether  they  are  samples,  unexpired,  or 
expired  subscriptions. 

The  postmaster  stated  his  dissatisfaction  that  Lewis  should  claim 
he  did  not  know  what  system  was  employed  in  his  mailings.  Lewis 
warmly  responded  that  he  then  had  no  means  of  knowing  what 
information  would  be  demanded  of  him.  The  substance  of  his 
next  remarks  is  condensed  into  the  following  sentence:  "For  the 
last  eight  months,  the  greater  portion  of  my  time  has  been  devoted 
to  trying  to  preserve  these  institutions  from  destruction." 

Postmaster  Wyman,  at  the  close  of  the  interview,  addressed  a 
communication  to  the  third  assistant  postmaster-general.  After 
reciting  the  records  of  his  office  as  to  the  entry  of  the  Woman's 
Magazine  and  Farm  Journal  to  the  second  class,  he  gives  it  as  his 
opinion  that  both  are  abuses.  He  then  calls  for  early  instructions 
"to  prevent  further  loss  to  the  Government  in  connection  with  the 
mailings  of  the  next  issues"  of  both  magazines.  The  third  assistant 
sent  this  letter  to  the  postmaster-general,  with  a  pointed  letter  of 
transmittal,  from  which  the  following  is  quoted: 

My  views  with  regard  to  the  status  of  these  publications  have  already 
been  mads  known  to  you  in  several  other  memoranda.  In  reply  you  di- 
rected that  the  two  cases  should  take  their  course  in  the  class  to  which 
they  belong.  That  accords  with  my  own  view  as  to  what  is  best  to  be  done. 
As  a  part  of  his  procedure,  the  postmaster  has  caused  inquiries  to  be  made 
by  other  postmasters,  to  ascertain  whether  or  not  persons  to  whom  copies 
of  the  publications  have  been  mailed  are  subscribers  in  fact.  This  is  the 
only  instance  of  record  where  a  postmaster  has  taken  such  action.  A  copy 
of  the  postmaster's  form  of  inquiry  is  attached.  I  do  not  consider  it  best 
for  me  to  take  any  action  on  this  letter  from  the  postmaster  until  you  have 
seen  it  and  determined  what,  under  the  unusual  circumstances,  should  be 
done.    Please  direct  me. 

General  Madden  at  the  congressional  inquiry  comments  on  this 
circumstance  as  follows: 

The  movement  against  the  publishing  company  on  October  11  was  by  the 
same  inspectors  who  conducted  the  investigation  in  March  previous.  They 
were  acting,  or  purporting  to  act,  on  behalf  of  the  postmaster  at  St.  Louis. 
They  were  gathering  information  upon  which  he  should  now  base  his  report 
to  the  third  assistant.  If  the  report,  later  to  be  placed  in  evidence,  be  true, 
the  St.  Louis  postmaster's  letter  of  November  11  was  not  written  by  him  or 
by  any  one  of  his  subordinates,  but  by  one  of  the  postofBce  inspectors,  the 
special  representatives  of  the  postmaster-general.  This  bringing  the  post- 
master into  the  case  at  this  stage  of  the  proceeding  gave  the  matter  some 


660  THE  SIEGE  OF  UNIVERSITY  CITY 

appearance  of  being  handled  along  the  "usual  lines."    The  local  postmaster 
could  address  the  third  assistant  direct. 

The  postmaster-general  had  not  responded  to  the  October  14  letter  from 
the  third  assistant.  Neither  did  he  respond  to  the  latter's  communication 
of  November  23,  transmitting  the  St.  Louis  postmaster's  letter  of  Novem- 
ber 11.  The  sending  of  these  commimications  to  him  was  in  accord  with  the 
third  assistant's  purpose  to  wash  his  hands  of  the  whole  matter  unless  the 
postmaster-general  should  come  out  in  the  open  with  definite  instructions 
whicli  would  disclose  his  purpose.  Many  communications  from  the  local 
postmaster  and  the  public  were  now  coming  into  the  Department.  Thej 
were  addressed  to  the  third  assistant.  Having  repudiated  the  whole  mat- 
ter, he  took  no  other  action  than  to  promptly  transmit  each  to  the  post- 
master-general, with  a  letter  of  transmittal,  as  in  the  case  of  the  St.  Louis 
postmaster's  letter  of  November  11.  The  postmaster-general  replied  to 
none.  Neither  did  he  mention  the  subject  verbally  to  the  third  assistant. 
When  the  two  were  together,  his  attitude  and  manner  forbade  a  discussion 
of  the  subject.  His  silence  continued  from  October  14,  1905,  until  March 
22,  1906,  a  period  of  five  months.  In  the  meantime,  the  third  assistant  was 
kept  in  the  dark  as  to  the  field  movements  the  postmaster-general  was  di- 
recting. 

The  effect  of  tlie  interview  in  the  postmaster's  office,  on  Novem- 
ber 11,  was  to  apprise  Lewis,  for  the  first  time,  of  the  nature  of 
the  charges  then  under  investigation.  The  conference  broke  up  in 
disorder.  Lewis  interrupted  the  proceedings  by  vigorously  de- 
nouncing the  postal  authorities  for  the  methods  they  were  employ- 
ing. He  agreed,  however,  to  ascertain  the  exact  facts  and  furnish 
in  writing  the  information  desired  by  the  Triumvirate.  The 
inspectors  submitted  to  him  a  list  of  some  half  dozen  questions, 
designed  to  bring  out  the  state  of  facts  charged  by  Parshall.  They 
also  presented  lists  of  names  and  addresses  taken  from  wrappers 
of  the  alleged  irregular  mailings,  and  demanded  that  Lewis  fur- 
nish the  original  orders  to  correspond.  In  his  reply  to  their  ques- 
tions Lewis  alleged  that  the  excess  sample  copies  had  been  charged 
to  a  defense  fund  sent  in  by  his  subscribers.  He  further  averred 
that  it  would  not  be  possible  to  produce  the  particular  original 
orders  asked  for  without  going  over  subscription  orders  on  file, 
amounting  to  over  a  million. 

THE    GRAND    JURY    PROCEEDINGS. 

The  inspectors  now  believed  they  Avere  ready  to  prove  their  case. 
They  accordingly  caused  subpoenas  to  issue  for  witnesses  to  appear 
before  the  grand  jury.  The  informer,  Parshall,  and  certain  em- 
ployees of  the  Lewis  Publishing  Company  presumed  to  be  able  to 
corroborate  his  statement,  were  summoned.  The  case  of  the  inspec- 
tors had  been  made  up  chiefly  on  the  mailings  of  the  Woman's 
Farm  Journal,  as  the  proportion  of  alleged  irregular  mailings  was 
much  larger  on  that  publication  than  on  the  Woman's  Magazine. 
In  reporting  to  Vickery  the  evidence  secured  against  the  Farm 
Journal,  Fulton  stated  that  when  the  witnesses  were  called  before 
the  grand  jury  he  proposed  to  further  develop  the  case  of  the 
Woman's  Magazine.  The  following  instance  will  indicate  how 
the  inspectors,  under  cover  of  the  grand  jury  proceedings,  procured 


THE  DREYFUS  CASE  OF  AMERICA  661 

evidence    from    witnesses    under    duress    and    in    fear    of   criminal 
process  against  themselves. 

eii.ermann's  affidavit. 

A  lengthy  affidavit  was  procured  under  such  circumstances  from 
George  Eilermann,  chief  truck  driver  of  the  Lewis  Publishing 
Company.  This  closes  with  a  paragraph  of  some  three  hundred 
words  placed  in  the  mouth  of  the  witness,  which  shows  internal  evi- 
dence of  being  summarized  by  the  inspectors  from  the  answers  of 
the  witness  to  various  inquiries.  Eilermann  immediately  reported 
to  Lewis  that  his  statements  had  been  forced  from  him  under 
duress.  He  afterwards  appeared  as  a  witness  before  the  Ash- 
brook  Committee  ,and  testified  in  substance  as  follows: 

My  name  is  George  J.  Eilermann.  I  live  at  16  Harvard  Avenue,  Uni- 
versity City.  I  am  shipping  clerk  to  the  Regents'  Publishing  and  Mercan- 
tile Corporation. 

I  have  been  connected  with  the  Lewis  Publishing  Company  in  the  past; 
with  the  Woman's  Magazine,  AVoman's  Farm  Journal  and  Woman's  Na- 
tional Daily.  I  have  been  with  the  Lewis  Publishing  Company  since  it 
started,  eight  or  nine  years.  In  the  year  1905,  I  think,  I  was  out  at  the 
plant — at  the  Lewis  Publishing  Company.  A  man  came  in  and  gave  me  a 
subpoena.  He  said  I  had  to  go  down  that  afternoon  and  appear  before 
the  grand  jury. 

I  went  up  to  see  Mr.  Lewis.  I  says:  "Mr,  Lewis,  I  am  subpoenaed,  I 
am.  Here  is  a  subpoena  for  the  grand  .iurj%"  Well,  Mr.  Lewis  just  kind  o' 
smiled.  He  says,  "Well,  George,  the  only  thing  for  you  to  do  is  to  go  down 
there  and  tell  the  truth.  Tell  everything  you  know.  Don't  try  to  keep  any- 
thing back."  I  remember  that  distinctly.  So  I  went  down  before  the  grand 
jury.  I  stayed  there  all  the  afternoon,  I  think  it  was,  and  the  next  morn- 
ing I  went  before  the  grand  jury  and  testified.  When  I  stepped  out  of  the 
grand  jury  room  into  the  ante-room  where  the  people  sit  and  wait  for  their 
turn  to  be  called,  a  man  came  to  me — I  don't  know  who  he  was — a  big,  tall 
man.  He  says,  "We  want  you  downstairs."  Well,  when  I  got  downstairs — 
I  think  it  was  on  the  second  floor — they  went  down  on  an  elevator  to  get 
there — there  were  several  men  in  the  office.  There  was  a  man  sitting  at  the 
desk,  and  this  fellow  says:  "Here,  you  want  to  use  this  man?"  lie  says, 
"Yes,  sir."  And  so  then  they  led  me  through  some  offices — I  don't  know 
if  it  was  one  or  two — into  a  back  room.  They  then  put  a  lot  of  questions 
to  me. 

Their  names  were  Mr.  Fulton  and  Mr.  vStice.  If  I  ain't  mistaken,  the 
other  one  was  Mr.  Reid,  but  I  am  not  certain  of  Mr.  Reid.  I  am  certain 
of  Mr.  Stice  and  Mr.  Fulton.  They  put  a  lot  of  questions  to  me  andj  I 
answered  them  the  best  I  could  about  a  lot  of  figures  on  these  wrappers. 
Well,  I  couldn't  tell  exactly.  I  had  no  figures.  I  had  to  answei*  them  the 
best  I  could.  Then  they  said  to  me,  they  says,  "Don't  you  know  that  you 
was  doing  something  wrong — defrauding  the  Government, — and  that  you 
could  go  to  the  penitentiary?"  , 

I  am  not  certain  who  said  that.  I  am  almost  certain  it  was  Mr.  Stice. 
But  it  was  either  one  of  these  two,  Mr.  Fulton  or  Mr.  Stice.  We  kept 
talking  and  talking  and  of  course  I  answered  as  best  I  could.  Then  I  got 
scared,  you  know,  I  got  worked  up.  Because,  the  day  before,  one  of  our 
clerks  was  there  from  out  at  the  building,  and  I  didn't  know  this  man  who 
was  going  in  and  out  of  the  grand  jury  room;  and  I  says,  "Who  is  that 
man?"  He  savs.  "That  is  the  assistant  prosecuting  attorney."  That  was 
Mr.  Fulton.  So  I  knew  who  he  was,  prosecuting  attorney's  assistant.  So 
when  they  put  a  lot  of  questions  to  me,  I  answered  just  as  truthful  as  I 
could — best  I  knew  how,     I  thought  I  was  under  compulsion  to  answer. 


662  THE  SIEGE  OF  UNIVERSITY  CITY 

Because  I  was  scared  after  they  told  me  I  had  done  something, — defrauding 
the  Government.  I  was  willing  to  do  anything.  When  I  was  not  clear  and 
tried  to  explain,  they  says,  "Now,  Mr,  Eilermann,  if  you  don't  tell  us,  and 
then  some  one  comes  in  here  and  tells  us,  it's  going  hard  on  you." 

To  the  best  of  my  memory,  I  was  there  from  half  past  eleven  to  half 
past  two.  It  was  11:30  when  I  got  through  with  the  grand  jury  and  2:30 
when  they  got  through,  because  tiie  grand  jury  have  lunch  at  12:30  until 
2:00;  and  when  I  came  out  the  jury  had  been  to  lunch  and  come  back 
again,  and  during  that  time  the  inspectors  were  asking  different  questions 
and  getting  answers. 

They  didn't  take  all  down.  Oftentimes  I  was  worked  up  and  couldn't 
get  the  answer  right  and  they  would  go  to  work  just  as  if  they  knew  all 
about  the  whole  affair  and  would  refresh  my  memory  on  a  whole  lot  of 
stuff.  They  got  me  to  make  answer  and  say  what  they  wanted  me  to  say. 
There  were  times  I  would  make  an  answer  seem  to  be  more  like  it  was  in 
Mr.  Lewis'  favor.  Then  they  would  say,  "Well,  we  don't  want  to  hear  about 
that.     That's  all  right." 

I  didn't  know  if  I  was  dismissed  from  the  grand  jury  or  not.  I  thought 
they  might  call  me  again.  They  made  the  remark  that  I  would  have  to 
come  back  there  in  the  evening.  So  I  went  to  the  room  and  stayed  back 
there.  I  didn't  have  no  lunch  and  in  the  evening  I  went  and  had  to  wait 
about  an  hour.  All  this  time,  you  know,  I  thought  I  was  a  goner.  (Laugh- 
ter.) So  I  asked  one,  I  says,  "If  I  ain't  going  to  get  away  from  here 
tonight — I  am  a  married  man — I  would  like  to  telephone  home."  Well, 
after  they  had  got  through  the  papers,  they  asked  me  to  read  them  over. 
But  I  couldn't  get  my  mind  on  what  I  was  reading.  I  didn't  telephone 
my  wife.  They  said,  "No,  you  will  be  through  here  in  a  short  time,"  and 
I  signed  up.  I  don't  icnow  how  many  papers  there  was — I  signed  'em  all 
up.  (Laughter.)  I  don't  remember  how  many,  only  one  thing,  I  says: 
"Now,  I'm  not  sure  of  this."  They  says:  "Well,  it  will  be  all  right."  I 
don't  know  that  I  would  have  signed  anything  they  asked  me.  I  know  I 
signed  a  stack.  I  haven't  seen  any  of  them  since.  I  know  I  couldn't  wait 
until  I  seen  those  indictments  to  see  whether  my  name  was  on  them.  I 
thought  I  was  going  to  be  indicted.  You  bet!  I  didn't  sleep  that  night, 
either.  I  didn't  know  I  had  been  doing  any  wrong.  I  told  them,  I  says, 
"I  do  just  what  I  am  told  to  do."  When  I  went  in  first  I  went  through 
some  offices.  I  don't  know  if  one  or  two — they  took  me  into  a  little  back 
room  and  an  office,  about  a  third  as  big  as  this  place  here.  I  thought  I 
seen  bars.  I  seen  some  bars,  before  I  went  in,  on  the  doors.  (Laughter.) 
and  I  thought  sure  I  was  gone.  I  was  there  from  half  past  six  to  seven 
o'clock,  something  like  that.  Not  all  the  time  in  the  little  room,  but  I 
didn't  leave  the  building.  I  felt  I  was  practically  under  restraint.  They 
didn't  actually  tell  me  that.  I  felt  all  right  in  the  grand  jury  room  until 
they  told  me  I  was  up  against  it.  In  the  grand  jury  room  it  was  different, 
you  know.  Of  course,  it's  supposed  to  be  secret.  You  felt  more  at  home, 
the  same  as  here,  as  if  you  were  getting  a  square  deal. 

MILLER    INTERROGATED. 

That  the  fears  of  Eilermann  were  not  unfounded  was  shown  by 
the  experience  of  William  E.  Miller^  secretary  of  the  Lewis  Pub- 
lishing Company.  After  examining  Eilermann  the  inspectors  also 
interrogated  two  young  women  who  had  been  formerly  employed 
in  the  subscription  department  of  the  Lewis  Publishing  Company. 
The  purport  of  their  testimony  was  to  confirm  the  charges  of  Par- 
shall  that  the  circulation  of  both  magazines  was  being  padded  with 
an  excess  number  of  sample  copies.  They  averred,  however,  most 
positively  that  no  secrecy  was  observed  as  to  these  mailings.  The 
facts,  they  said,  were  well  known  to  the  employees.     There  was  no 


THE  DREYFUS  CASE  OF  AMERICA  663 

understanding  that  these  practices  were  in  any  way  unlawful.  One 
of  these  young  women  testified  that  shortly  before  the  October 
mailings  of  the  Farm  Journal  a  change  had  been  ordered  in  the 
style  of  the  Avrappers.  The  effect  of  this  was  to  destroy  the  value  of 
the  key  furnished  by  Parshall  to  the  inspectors  and  make  it  impos* 
cible  for  the  latter  to  distinguish  alleged  irregular  mailings.  On 
this  head  the  witness  said:  "Just  before  I  left,  Mr.  Miller  came 
running  up  and  told  me  to  make  that  change." 

Accordingly,  the  day  following,  ]\Iiller,  who  directed  the  October 
mailings  of  the  Woman's  Farm  Journal,  was  called  to  the  inspectors' 
office  and  questioned.  Miller  testified  that  approximately  one  hun- 
dred and  fifty  thousand  copies  of  the  Farm  Journal  had  been  sent 
out  as  samples,  but  not  so  marked.  These  were  charged  to  the 
defense  fund.  He  said  no  such  system  had  been  used  that  month 
in  mailing  the  Woman's  Magazine.  As  to  the  charges  of  Parshall, 
Miller  made  the  following  statement: 

Mr.  Miller:  I  will  say  that  Mr.  Lewis  and  I  had  a  conference  regarding 
the  statements  made  by  Mr.  Parshall,  who  had  been  dismissed  from  the 
position  of  routing  and  handling  the  wrappers  prior  to  mailing.  His  state- 
ments were  to  the  effect  that  he  had  fixed  the  subscription  list  in  such  shape 
that  it  could  easilj  be  detected  by  the  postoffice  officials.  On  account  of 
those  statements  and  the  arrangements  made  by  Mr.  Parshall,  changes 
were  made  in  the  M'rappers  in  mailing  the  Woman's  Farm  Journal.     *     *     * 

Mr.  Stick:  In  other  words,  if  Mr.  Parshall  had  fixed  anything  so  that 
the  Postoffice  Department  could  make  its  investigation,  you  made  this 
change  so  that  we  (the  inspectors)  could  not  prove  the  truthfulness  of 
what  Mr.  Parshall  had  fixed? 

Mr.  Miller:    Yes,  that  is  the  substance  of  it. 

In  the  course  of  this  investigation  the  inspectors  employed  the 
following  thinly  veiled  threat,  with  the  obvious  purpose  of  intimi- 
dating the  witness: 

Mr.  Stice:  Is  it  not  a  fact,  Mr.  Miller,  that  in  the  idea  of  devotion  to 
the  interests  of  your  employer,  you  lost  sight  of  the  legality  or  illegality 
of  some  of  your  actions,  and  took  steps  out  there  to  assist  in  preventing 
the  postoffice  officials  getting  at  the  correct  subscription  list? 

Mr.  Miller:     I  took  no  steps  on  my  own  responsibility. 

Mr.  Stice:  Did  you  do  that  in  the  sense  that  you  were  acting  for  the 
company. 

Mr.  Miller:  Now,  Mr.  Stice,  any  concern  that  I  work  for  I  feel  that 
my  best  efforts  must  be  given  them.  If  not,  I  should  go  out  of  their 
employ. 

Mr.  Stice:  There  is  just  a  question  of  whether  you  have  not  gone  be- 
yond the  limit  of  legality  and  gotten  over  into  the  field  of  illegality  when, 
in  an  attempt  to  give  your  employers  your  best  efforts,  you  have  gone 
further  and  assisted  them  in  evading  the  law. 

Mr.  Miller:     I  am  not  conscious  of  having  done  any  such  thing. 

After  the  examination  of  Miller  had  been  completed,  he  was 
released  by  the  inspectors,  but  requested  to  return  after  tlie  stenog- 
rapher had  reduced  his  deposition  to  writing,  for  the  purpose  of 
attaching  his  signature.  In  tlie  interval  he  consulted  counsel  and 
was  advised  that  the  inspectors  were  without  authority  of  law  to 
compel  testimony,  and  that  he  would  be  subject  to  no  penalty  if  he 
refused  to  subscribe  to  the  statement.    He  therefore  refused  to  sign. 


664  THE  SIEGE  OF  UNIVERSITY  CITY 

Two  days  later  his  name  was  included  with  those  of  Lewis  and 
Cabot  in  the  first  indictment  found  against  Lewis  and  his  asso- 
ciates, charging  that  as  officers  of  the  Lewis  Publishing  Company 
they  "did  unlawfully  and  feloniousl}^  conspire^  combine,  confed- 
erate and  agree  together  to  defraud  the  United  States  out  of  large 
sums  of  money,"  the  exact  amounts  of  which  were  to  the  grand 
jurors  unknown. 

THE    FIRST    INDICTMENTS. 

The  offense  alleged  was  that  the  "conspirators  falsely  and  fraud- 
ulently represented  that  the  number  of  actual  subscribers"  to  the 
Woman's  Magazine  and  Farm  Journal  were  largely  in  excess  of  the 
actual  and  bona  fide  subscribers,  and  that  they  "did  thereby  fraudu- 
lently secure  to  be  transmitted  through  the  United  States  mails  a 
large  number  of  said  publications  in  excess  of  the  number  to  which 
they  -were  entitled  at  the  rate  of  one  cent  per  pound."  All  of  this 
was  alleged  to  be  "contrary  to  the  form  of  the  statute  in  such  case 
made  and  provided,  and  against  the  peace  and  dignity  of  the 
United  States."  The  indictment  was  signed  by  David  P.  Dyer, 
United  States  attorney. 

This  indictment,  coming  as  an  entire  surprise,  was  naturally  a 
severe  shock  to  Lewis  and  his  associates.  Taken  in  conjunction 
with  the  publication  of  the  inspectors'  report  in  the  Post-Dispatch, 
the  activities  of  the  inspectors  directed  against  the  exchange  of 
stock  and  their  threat  of  a  fraud  order  against  the  Missouri-Lin- 
coln Trust  Company,  the  proceedings  culminating  in  this  indictment 
were  most  ominous.  In  the  light  of  all  this  Lewis  became  con- 
vinced that  there  was  an  intention  on  the  part  of  somebody  "higher 
up"  to  crush  him  utterly.  He  had  no  means  of  knowing  what  was 
taking  place  behind  the  scenes  at  Washington.  The  fact  that  Mad- 
den had  Avashed  his  hands  of  the  whole  affair  and  that  Cortelyou  had 
given  Vickery  and  Fulton  free  reign  to  handle  the  matter  as  they 
saw  fit,  was  not  disclosed  to  him  until  long  afterwards.  He  could 
not  understand  the  utter  silence  of  the  third  assistant's  office,  nor 
could  he  understand  why  he  should  be  indicted  for  practices  con- 
doned by  the  Department  upon  the  part  of  his  competitors.  The 
whole  affair  seemed  shrouded  in  impenetrable  mystery. 

The  outcome  of  this  indictment  will  be  discussed  with  that  of  other 
civil  and  criminal  proceedings  of  the  Government  against  Lewis. 
It  was  based  upon  the  decision  of  the  St.  Louis  postmaster  limiting 
the  legitimate  list  of  subscribers  of  Lewis'  two  publications  to  the 
number  of  paid-in-advance  subscriptions  determined  by  the  in- 
spectors' count  in  October,  plus  an  equal  number  of  sample  copies. 
The  effect  of  this  ruling  was  to  reduce  arbitrarily  Lewis'  mailings 
to  about  one  million  copies  of  the  Woman's  Magazine  and  three 
hundred  thousand  copies  of  the  Farm  Journal.  All  mailings  in 
excess  of  these  figures  were  deemed  illegitimate  and  were,  in  effect, 
so  charged  in  the  indictment.  This  action  was  taken  solely  upon 
the  advice  of  Inspcctor-in-Charge   Fulton,  under  the  general  au- 


THE  DREYFUS  CASE  OF  AMERICA  565 

thority  conveyed  to  him  by  Vickery  to  "take  such  steps  as  he  deemed 
proper."  It  had,  however,  the  tacit,  if  not  the  explicit,  sanction  of 
the  postmaster-general,  who,  in  the  words  of  Vickery,  had  been 
"fully  advised." 

All  this  was  done  without  any  reference  of  the  case  to  the  bureau 
of  the  third  assistant,  the  officer  having  lawful  jurisdiction  over 
the  administration  of  the  second-class  law.  It  was,  in  view  of  the 
Bromwell-Weinschenk  agreement,  not  only  a  gross  violation  of  the 
morals  and  ethics  of  the  administration  of  the  second-class  law.  It 
was  also  contrary  to  the  avowed  policy  of  the  third  assistant 
to  suspend  all  action  against  the  mail  order  journals  until  the 
new  rules  were  published.  It  was  a  transgression  of  the  uniform 
custom  of  the  Department  to  first  warn  offenders  against  the  postal 
laws  and  regulations,  and  thus  afford  them  ample  opportunity  to 
amend  their  practices  before  destroying  their  property  rights  by 
drastic  measures.  Furthermore,  as  the  sequel  will  show,  this  in- 
dictment was,  in  effect,  fraudulent  and  spurious,  because  it  was 
not  based  upon  any  criminal  statute  of  the  United  States. 

On  the  same  day,  December  1,  another  indictment  was  handed 
down,  upon  information  laid  before  the  grand  jury  by  the  inspectors. 
This  charged  Lewis  with  using  the  United  States  mails  in  further- 
ance of  a  scheme  to  defraud  in  the  promotion  of  the  People's  Bank. 
Both  of  these  indictments  were  found  four  or  five  days  before  the 
date  on  which  Congress  was  to  convene.  In  the  light  of  after  events 
there  can  be  little  doubt  that  the  purpose  for  which  they  were  pro- 
cured by  the  inspectors  was  rather  to  forestall  the  congressional 
inquiry  demanded  by  Lewis  in  his  publications,  than  for  any  pur- 
pose proper  to  a  just  administration  of  the  law.  One  of  these 
indictments,  as  we  shall  see,  was  never  brought  to  trial.  The  other 
resulted  in  Lewis'  acquittal  in  the  Federal  court. 

ATTITUDE   OF  FULTON. 

On  December  18,  after  Congress  had  been  in  session  long  enough 
for  the  full  force  of  the  complaints  of  Lewis'  friends  to  be  felt 
by  congressmen,  Fulton  made  a  complete  report  to  Vickery  of  the 
evidence  upon  which  these  indictments  were  procured.  He  shows 
clearly  enough  that  there  was  some  padding  of  Lewis'  circulation 
lists,  but  draws  from  the  facts  a  whole  series  of  erroneous  conclu- 
sions. He  admits  that  Miller  was  indicted  because  of  his  refusal 
to  sign  the  transcript  of  his  testimony  before  the  inspectors.  He 
arrives  at  the  following  conclusion  and  recommendation : 

Lewis  in  this  case  is  shown  as  the  principal  in  another  scheme  to  defraud 
and  this  one,  aimed  at  and  successfully  operated  against  the  Government 
of  the  United  States  to  the  amount  of  seventy-five  thousand  to  one  hun- 
dred thousand  dollars  per  annum.  *  •  *  This  fraud  has  covered  twenty 
months  at  least,  and  has  affected  advertisers  to  whom  Lewis  has  misrep- 
resented the  circulation,  as  well  as  to  the  Government.  As  a  result,  the 
Woman's  Magazine  and  Farm  Journal  are  being  conducted  primarily  for 
advertising  purposes,  and  are  no  longer  entitled  to  second-class  privileges. 


566  THE  SIEGE  OF  UNIVERSITY  CITY 

The  concluding  paragraphs  of  this  report  should  be  studied  care- 
fully for  their  bearing  upon  the  question  of  legislation  to  curb  the 
petty  administrative  officers  of  Government  and  forestall  the  abuse 
of  administrative  power.  The  theory  of  the  inspectors  is  that  the 
postoffice  inspector  is  the  personal  representative  of  the  postmaster- 
general,  clothed  practically  with  equal  authority.  As  such  the 
humblest  and  most  ignorant  inspector  claims,  in  effect,  authority  over 
all  postmasters  and  even  the  highest  departmental  authorities  at 
Washington.  He  may  make  recomendations  affecting  any  branch 
of  the  postal  service  in  its  internal  relations,  or  in  its  relation  to  any 
citizen.  If  approved  by  his  superiors  and  sanctioned  by  the 
postmaster-general,  his  recommendations  may  become  the  acts  of  the 
Administration.  They  are  then  supported  by  the  power  and  author- 
ity of  the  President  himself.  A  postoffice  inspector  may  thus  (if  he 
can  command  the  confidence  of  the  chief  postoffice  inspector  and 
postmaster-general)  wield  against  any  citizen  a  power  superior  to 
that  of  any  European  monarch.  No  judicial  or  administrative  officer 
bars  the  way.  All  that  is  essential  is  a  personal  relation  of  confi- 
dence between  the  individual  inspector,  the  inspector-in-chief  and 
the  postmaster-general.  When  this  exists,  the  inspectors'  recom- 
mendations may  be  approved  in  spite  of  any  individual's  rights  or 
any  protest  or  evidence.  The  conclusions  of  Fulton  were,  in  fact, 
thus  accepted  by  Vickery  and  approved  by  Cortelyou,  notwithstand- 
ing Fulton  was  ignorant  of  the  postal  law  and  precedents  involved, 
and  notwithstanding  his  conclusions  were  afterwards  repudiated  by 
the  courts.  Confident  in  the  power  of  the  inspectors'  service,  and 
with  full  assurance  of  the  backing  of  the  postmaster-general,  Fulton 
here  deliberately  arrayed  his  personal  construction  of  the  postal 
law  against  that  of  the  third  assistant.  He  constituted  himself 
judge  and  jury,  tried  and  condemned  Lewis,  and  assessed  the  pun- 
ishment. He  determined  what  the  policy  of  the  Administration  in 
the  premises  ought  to  be.  All  this  he  did  with  the  calm  assurance 
of  the  Czar  of  all  the  Russias.  The  following  paragraphs,  then, 
in  view  of  the  facts  elsewhere  presented  in  this  volume,  are  assuredly 
worthy  of  grave  consideration: 

What  recommendation  should  be  made  in  view  of  the  delicate  situation 
created  by  non-action  on  our  adverse  recommendation  of  last  May,  is  a 
complex  problem.  At  the  proper  time  and  in  the  proper  manner  the  in- 
spectors' recommendation  should  be  made  effective  and  Lewis'  publicationa 
should  be  denied  second-class  privileges,  and  Leiois  sued  for  the  amount  of 
the  fraud  perpetrated.  There  is  no  other  consistent  course  from  the  stand- 
point of  an  inspector,  and  I  cannot  see  any  other  course  from  the  stand- 
point of  our  Department.  The  local  officers  of  the  Department  of  Justice 
have  given,  and  are  giving,  earnest  and  loyal  co-operation.  This  being 
the  case,  the  United  States  attorney,  the  court,  and  the  people,  will  logi- 
cally reason  that  an  offense  which  is  considered  by  the  officers  of  the  De- 
partment of  Justice  of  such  a  serious  nature  and  extent  as  to  warrant 
indictment  and  prosecution,  looking  toward  a  denial  of  the  personal  liberty 
of  the  individual,  should  be  met  by  the  Postoffice  Department,  against  which 
the  fraud  was  committed,  with  at  least  an  immediate  civil  action  involving 


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THE  DREYFUS  CASE  OF  AMERICA  569 

merely  a  revocation  of  a  property  privilege  and  thereby  discontinuing  fur- 
ther frauds  and  opportunity  to  perpetrate  them. 

Lewis  has  forfeited  every  title  to  any  privilege  he  may  have  enjoyed  in 
the  way  of  second-class  privileges.  He  is  the  most  daring,  determined  and 
resourceful  promoter  of  frauds  known  to  this  section  and  has  defied  the 
statutes,  the  courts,  the  Postoffice  Department,  and  State  officials  for  years, 
first  by  inducing  prominent  officials  to  participate  in  his  promotions,  and 
now  by  severely  arraigning,  in  his  publications,  all  officers  who  do  not  close 
their  eyes  on  "duty  half  done!"  He  is  no  respecter  of  victims.  They  are 
found  not  only  in  the  people  (unsophisticated  women  as  well  as  men),  but 
also  in  the  Government  itself,  which  has  suffered  great  fraud  on  its  already 
much  depleted  revenues. 

The  representatives  of  the  Government^  contemplating  all  the 
activities  of  Fulton  in  this  case,  must  be  irresistibly  reminded  of  the 
words  of  Holy  Writ: 

"The  zeal  of  thine  house  hath  eaten  me  up,  and  the  reproaches  of  him 
that  reproacheth  thee  are  fallen  upon  me." 

The  indictment  of  the  officers  of  the  Lewis  Publishing  Company 
for  alleged  conspiracy  to  defraud  the  Government  filled  their  asso- 
ciates upon  the  board  of  directors  with  alarm.  The  limitations  im- 
posed by  the  postmaster,  restricting  the  company's  mailings  to  its 
actual  current  paid-in-advance  subscriptions  shown  by  the  inspec- 
tors' count  as  of  October,  1905,  if  enforced  against  the  Lewis  Pub- 
lishing Company  and  not  against  its  competitors,  would  ruin  the  con- 
cern and  drive  it  out  of  business.  The  indictment  charged  the  mail- 
ing of  additional  copies  at  the  pound  rate  to  be  a  criminal  offense. 

THE    THIRD    ATTACK. 

Then  came  on  April  1,  1905,  the  third  campaign  of  the  St.  Louis 
Triumvirate.  This  took  the  form  of  a  demand  for  the  prepayment 
of  postage  upon  all  copies  presented  for  mailing,  above  the  limita- 
tions arbitrarily  fixed  by  the  postmaster,  at  the  so-called  transient 
second-class  rate,  which  is,  in  fact,  the  third-class  rate  of  four 
cents  a  pound.  This  was  an  advance  of  400  per  cent  upon  the 
company's  expense  for  postage  in  that  part  of  its  mailings,  com- 
pared with  the  rate  assessed  upon  competing  publications.  The  di- 
rectors of  the  Lewis  Publishing  Company  found  themselves  con- 
fronted with  this  onslaught  at  the  very  moment  when,  the  increase 
of  the  capital  stock  having  gone  into  eifect,  they  had  assumed  the 
task  of  carrying  the  investment  of  the  People's  United  States  Bank 
and  earning  dividends  upon  a  largely  increased  capitalization. 

The  company  had  been  successful  in  preventing  the  interference 
of  the  inspectors  with  the  exchange  of  stock,  by  securing  an  injunc- 
tion in  the  State  courts  against  the  Missouri-Lincoln  Trust  Com- 
pany. It  had  defeated  the  attempted  interference  of  the  attorney- 
general  of  Missouri.  It  had  undergone  the  hazard  of  having  the 
stock  certificates  themselves  held  up  at  the  St.  Louis  postoffice 
(notwithstanding  they  were  mailed  under  seal  and  prepaid  as  first- 
class  letter  mail)  until  the  Department  was  advised  that  they  were 
being  sent  out  and  given  a  last  chance  to  interfere.  The  exchange 
had  been  finally  consummated  as  planned.     The  company  was  now 


670  THE  SIEGE  OF  UNIVERSITY  CITY 

confronted  by  a  fresh  attack,  in  tlie  criminal  proceedings  for  al- 
leged conspiracy  and  in  the  restriction  of  its  mailings,  which,  if  suc- 
cessful, would  defeat  the  object  of  the  exchange  of  stock  by  mak- 
ing the  preferred  stock  of  the  Lewis  Publishing  Company  worthless. 

The  attack  was  a  desperate  one.  The  indictment  of  Lewis  was 
calculated  to  have  the  effect  of  weakening  the  confidence  of  his  sup- 
porters. A  new  weapon  was  placed  in  the  hands  of  the  press  and 
the  competitors  of  the  Lewis  Publishing  Company.  Fortunately  for 
Lewis,  the  confidence  of  his  supporters  was  strengthened,  rather  than 
weakened,  by  this  fresh  outrage,  as  they  deemed  it.  They  rallied 
unhesitatingly  to  his  support.  The  investors  in  the  bank  who  had 
exchanged  their  securities  for  those  of  the  publishing  company,  al- 
ready incensed  by  the  fraud  order  and  irritated  by  the  attempt  to 
hold  up  the  deliver}^  of  their  stock  certificates,  were  angered  by 
these  renewed  and  vicious  attacks,  which,  if  successful,  would  once 
more  wipe  out  the  basis  of  their  investment. 

Congress  convened  on  December  6,  a  few  days  after  the  indict- 
ments were  found,  and  was  promptly  memorialized  by  Lewis'  friends 
and  followers  from  every  quarter  of  the  Union.  We  must  now, 
therefore,  take  up  the  defense  of  the  Lewis  Publishing  Company 
against  the  St.  Louis  Triumvirate  during  the  winter  of  1905  and 
1906.  This  resulted  in  an  appeal  being  taken  to  the  Department 
at  Washington  from  the  decision  of  the  postmaster  at  St.  Louis  re- 
garding the  company's  alleged  excess  mailings.  By  this,  the  third 
assistant  postmaster-general  was  again  brought  into  the  case.  This 
recital  will  involve,  not  only  the  indictments  for  conspiracy,  but  also 
the  extortion  of  excess  postage  by  the  postmaster  at  St.  Louis  and 
the  bringing  of  civil  suits  to  collect  back  postage  covering  a  period 
of  many  months.  The  story  of  the  company's  defense  will  include 
a  description  of  the  count  of  its  subscriptions  by  a  Citizens'  Com- 
mittee and  by  the  American  Advertisers'  Association;  the  dismissal 
of  the  indictments  on  demurrer;  the  counter  suit  against  the  post- 
office  officials;  and  the  final  appeal  to  the  Department  through  the 
standing  committee  of  Congress  on  Postoffices  and  Post  Roads. 
These  developments  will  be  the  subject  of  the  following  chapter. 


CHAPTER  XXIV. 

THE  DEFENSE  OF  THE  WOMAN'S  MAGAZINE. 

'^HE  Alleged  Citizens'  Committee — Report  of  the  Citizens' 
Committee — The  Postal  Laws  Are  Silent — A  Reason- 
able Time  for  Expirations — What  the  Attorneys  Will 
Need — The  "Doctored"  Ruling — The  Third  Campaign 
of  the  Triumvirate — Wyman  Is  Rebuked — The  Only 
Unchangeable  Subscription  List  in  History — The  Sec- 
ond Hearing  Before  Madden — An  Interview  With 
Cortelyou. 

The  Publishing  Company,  on  December  28,  1905,  organized  an  alleged 
citizens'  committee,  of  which  L.  B.  Tebbetts  was  made  chairman;  George 
H.  Augustine,  secretary;  and  the  following  citizens  members:  L.  D.  Kings- 
land,  John  B.  O'Meara,  I.  H.  Sawyer,  William  Bagnell,  Joseph  W.  Jamison, 
George  T.  Coxhead,  Nathan  Frank  and  Jackson  Johnson.  A  resolution  of 
the  board  of  directors  of  the  Publishing  Company,  under  which  this  com- 
mittee acted,  was:  "To  make  a  very  thorough  and  exhaustive  investigation 
and  examination  of  the  subscription  lists  of  the  Woman's  Magazine  and 
the  Woman's  Farm  Journal,  in  order  to  determine,  beyond  any  possibility 
of  controversy,  the  exact  number  of  bona  fide  subscriptions  to  these  two 
publications."  As  to  the  personnel  of  this  committee,  Mr.  Tebbetts  is  a 
member  of  the  board  of  directors  and  one  of  the  principal  holders  of  com- 
mon stock  in  Lewis'  University  Heights  Realty  and  Development  Company, 
and  a  stockholder  in  his  United  States  Fibre  Stopper  Company.  Mr.  Au- 
gustine and  Mr.  Bagnell  are  stockholders  in  the  Lewis  Publishing  Com- 
pany. The  others  are  friends  and  sympathizers.  This  would  indicate  that 
in  the  organization  of  this  committee  and  selection  of  its  members,  the  in- 
terests of  the  publishing  company  were  not  forgotten.  •  *  *  This 
alleged  citizens'  committee  count,  so  far  as  being  an  authority  which  can 
be  accepted  by  the  Postoffice  Department  on  which  to  base  a  conclusion, 
is  worthless. 

THE  "alleged  citizens'  COMMITTEE." 

Such  is  the  comment  of  the  inspectors  on  the  first  move  made  by 
Lewis  in  the  defense  of  the  Woman's  Magazine  and  Farm  Journal. 
One  of  the  citizens  mentioned  by  the  inspectors  as  a  member  of  this 
"alleged  citizens'  committee"  was  former  Congressman  Nathan 
Frank,  publisher  of  the  St.  Louis  Star,  and  prominent  in  national 
as  well  as  in  local  political  and  financial  circles.  While  Mr.  Frank 
was  a  witness  before  the  Ashbrook  Committee,  his  attention  was 
drawn  to  the  above  phrases  from  the  inspectors'  report.  The  fol- 
lowing colloquy  ensued: 

Mb.  Redfield:  The  postoffice  inspectors,  Mr.  Frank,  over  their  own 
signatures,  four  of  them,  say  that  the  citizens'  committee,  of  which  you  are 
a  member,  was  an  "alleged  committee."     Is  that  a  truthful  statement? 

Mr.  Frank:  No.  I  took  the  postmaster,  Mr.  Wyman,  to  task  for  that 
statement.  I  heard,  or  saw  somewhere  in  the  public  print,  that  he  had  re- 
ferred to  us  as  an  "alleged  citizens'  committee."    I  went  to  him  and  asked 

571 


572  THE  SIEGE  OF  UNIVERSITY  CITY 

him  what  he  meant  by  that.  He  apologized  most  profusely  for  the  inter- 
pretation that  I  put  upon  the  word  "alleged."  He  said  he  didn't  mean  that 
this  was  an  "alleged  committee."  He  intended  the  word  "alleged"  to  mean 
something  entirely  foreign  to  anything  I  could  comprehend.  He  tried  to 
make  a  distinction,  and  apologized  for  the  use  of  the  word  as  interpreted 
by  me. 

Mr.  Redfield:  Then  I  call  your  attention  to  the  fact  that  the  same  in- 
spectors, Stice,  Sullivan,  Reid  and  Sullivan,  in  their  report,  said,  "The  result 
of  the  count  made  by  this  committee  cannot,  as  they  state,  be  accepted 
as  absolutely  trustworthy.  They  may  have  counted  the  number  of  lists  and 
names  which  they  state" — I  call  your  attention  to  the  word  "may" — but 
the  objection  is  as  to  what  they  counted.  *  ♦  *  The  "alleged  citizens' 
committee  count,  so  far  as  being  an  authority  which  can  be  accepted  by  the 
Postoffice  Department  on  which  to  base  a  conclusion,  is  worthless." 

Mn.  Fraxk:  As  far  as  these  other  statements  are  concerned,  I  never 
saw  them  before,  but  I  now  recollect  that  we  refused  to  make  that  count 
and  examination  in  Mr.  Lewis'  premises.  We  engaged  rooms  downtown 
at  the  building  of  the  Commonwealth  Trust  Company,  at  the  corner  of 
Broadway  and  Olive  street — a  whole  floor,  if  I  recollect  it — in  which  all 
tliose  papers  were  brought.  I  knew  nothing  about  Mr.  Lewis  at  the  time. 
I  had  just  heard  about  him.  I  remember  going  there  frequently  to  this 
room,  which  was  under  lock  and  key  of  the  head  of  the  examiners,  Mr. 
Walter  B.  Stevens.  That  examination  was  made  in  the  most  careful  way. 
Mr.  Austix:  You  do  not  want  the  committee  to  understand  that  your 
committee's  report  is  more  thorough  and  more  reliable  than  the  investi- 
gation of  the  postoffice  inspectors?  You  do  not  know  about  that,  do  you? 
Mn.   Frank:     No,  sir;   I   do   not  know. 

Mr,  Maddek:  But  you  do  want  the  committee  to  understand  that  you 
had  the  facts? 

Mr.  Fraxk:  Yes;  I  have  stated  repeatedly  that  we  made  the  most  care- 
ful investigation,  the  most  careful  that  was  possible.  That  means  that  we 
stuck  to  it.  We  employed  expert  accountants.  We  checked  up  the  cash 
against  the  subscriptions. 

Mr.  Madden:  I  ask  you  this  question  as  a  lawyer:  Isn't  the  best  evi- 
dence on  earth  of  a  subscription,  the  original  order  signed  by  the  party 
himself? 

Mr.  Fraxk:     Undoubtedly. 

Mr.  Lewis:  Will  you  kindly  state  to  the  committee  what  else  you  re- 
member in  regard  to  the  circumstances. 

Mr.  Frank:  My  recollection  is  that  it  was  desired  to  have  the  busi- 
ness men's  committee  investigate  the  circulation  of  your  publications.  We 
met  first  at  the  Magazine  Building.  We  submitted  the  proposition  that  if 
you  would  put  up  the  amount  of  money  necessary  to  make  an  accurate, 
careful  investigation  and  canvass,  we  would  undertake  it.  We  agreed,  if 
you  would  deposit  the  necessary  funds  in  a  certain  trust  company,  we  would 
employ  professional  newspaper  men  and  canvassers  to  do  the  work.  I  am 
sure  you  did  so,  for  we  went  ahead  and  employed  several  superintendents 
and  clerks  to  make  the  count.  I  know  we  were  frequently  called  together 
during  the  time  occupied  in  making  the  canvass. 

Former  Governor  David  R.  Francis,  in  a  speech  made  on  the 
occasion  of  the  dedication  of  the  Woman's  National  Daily  building, 
in  November,  1909,  referred  to  Fewis'  defense  against  the  St.  Louis 
Triumvirate,  in  part,  in  the   following  language: 

But  other  charges  were  made.  I  do  not  propose  to  criticise  the  action  of 
the  Federal  Government,  but  I  do  want  to  say  this  (and  I  speak  whereof 
I  know),  that  when  the  charges  were  made  that  the  Woman's  Magazine 
had  made  claims  concerning  circulation  which  were  not  justified  by  the 
facts,  Mr.  Lewis  very  promptly  said:  "I  wish  a  thorough  and  impartial 
investigation  made."    I  know  that  a  commission  of  high-minded  citizens,  of 


THE  DREYFUS  CASE  OF  AMERICA  575 

irreproachable  standing,  was  selected  and  authority  given  that  commission 
and  means  provided  to  make  a  thorough  investigation  of  the  circulation  of 
the  Woman's  Magazine,  and  I  know  that  the  result,  as  shown  by  the  report, 
was  that  Mr.  Lewis  was  guilty  of  no  violation  of  the  postal  laws  in  the 
claims  he  had  made. 

REPORT    OF    THE    CITIZENS*    COMMITTEE. 

The  Citizens'  Committee  above  referred  to  was  organized  in  De- 
cember, 1905,  on  invitation  of  James  F.  Coyle,  chairman  of  the 
executive  committee  of  the  Lewis  Publishing  Company,  Its  final 
report  was  rendered  on  February  12,  1906.  After  outlining  the  or- 
ganization of  the  committee,  this  report  proceeds: 

A  sub-committee  was  appointed  to  consider  a  plan  and  recommend  it 
to  the  general  committee.  This  plan  was  adopted.  Messrs.  Walter  B. 
Stevens  and  Major  J.  Lowenstein  were  engaged  to  organize  a  suitable  force 
and  to  superintend  the  work  in  detail.  It  was  decided  that  the  examina- 
tion and  count  of  the  subscriptions  should  take  place  downtown  in  St. 
Louis,  in  rooms  which  would  be  absolutely  under  the  control  of  the  com- 
mittee: that  the  original  letters  and  lists  of  subscriptions  for  IQO-t  and  1905 
should  be  taken  to  those  rooms  to  remain  until  the  count  was  completed. 
All  this  was  done.  Seven  large  rooms  on  the  fourth  floor  of  the  Mechanics- 
American  National  Bank  building  were  rented.  The  delivery  of  the  origi- 
nal subscription  letters  and  club  lists,  by  the  wagon  load,  was  begun  Janu- 
ary 11.  The  last  consignment  was  received  January  26,  1906.  As  the  let- 
ters and  lists  were  delivered  by  the  Lewis  Publishing  Company,  they  were 
placed  in  one  storeroom.  As  the  bundles  were  examined  and  counted,  they 
were  labeled,  stamped  and  taken  to  another  storeroom.  This  system  pro- 
vided against  the  possibility  of  any  subscription  being  counted  more  than 
once.  All  of  the  papers  remained  in  the  custody  of  the  committee's  repre- 
sentatives until  February  3,  at  which  date  the  count  had  been  finished. 

The  chairman  of  the  committee  made  daily  visits  of  inspection  to  the 
rooms  where  the  count  was  progressing,  and  received  daily  reports.  Other 
members  inspected  the  work.  Meetings  of  the  general  committee  were  held 
while  the  count  was  in  progress.  From  their  own  observation,  the  members 
assured  themselves  that  the  count  was  being  made  intelligently,  thoroughly 
and  conscientiously.  Precautions  were  taken  to  avoid  duplicates  in  count 
between  originals  and  renewals.  On  February  12,  the  committee  received 
from  its  representatives  a  report  giving  the  results  of  the  count  of  tlie 
Woman's  Magazine  subscriptions,  certified  and  sworn  to  as  follows: 

If  the  "reasonable  time"  for  carrying  these  subscriptions  which  have 
expired  should  be  considered  one  year,  then  the  bona  fide  subscriptions  of 
the  Woman's  Magazine  as  of  date  December  31,  1905,  were  1,182,928.  If 
the  "reasonable  time"  is  taken  as  six  months,  the  bona  fide  subscriptions  of 
the  Woman's  Magazine  as  of  date  December  31,  1905,  are  929,179,  made  ifp 
as  follows: 

By  actual  subscriptions  paid  in  advance  during  1905 597,465 

By  subscriptions  for  more  than  one  year  received  in  1904  and  alive 

December  31,  1905  13,243 

By  subscriptions  which  expired  between  July  1,  1905,  and  Decem- 
ber 31,  1906,  carried  in  expectation  of  renewal 318,471 

Total 929,179 

Certain  exhibits,  which  speak  for  themselves  of  the  exhaustive  character 
of  the  investigation,  accompany  and  are  made  a  part  of  this  report.  In  the 
unqualified  opinion  of  the  committee,  the  results  of  the  count  may  be  ac- 
cepted as  absolutely  trustworthy. 


676  THE  SIEGE  OF  UNIVERSITY  CITY 

The  above  report  was  signed  by  the  full  committee.* 
The  exliibit  slieets  accompanying  this  report  were  tabulations 
showing  the  number  of  subscriptions  as  ascertained  by  the  actual 
count  of  the  original  orders  by  months,  together  with  a  summary 
for  eacli  year.  Fac-simile  reproductions  of  these  summaries  are 
shown  elsewhere  in  this  volume.  These  sheets  were  signed  by  the 
supervisors  and  attested  before  a  notary.  The  supervisors  employed 
an  expert,  formerly  chief  accountant  in  the  office  of  the  auditor  of 
the  Louisiana  Purchase  Exposition  Company.  His  certification 
appears  upon  each  tabulated  summary.  The  detailed  report  of 
Messrs.  Stevens  and  Lowenstein,  who  were  in  immediate  charge, 
was  of  such  a  character  as  to  give  absolute  assurance  of  thorough- 
ness and  accuracy.  The  count  covered  not  only  the  number  of  sub- 
scriptions, but  touched  upon  the  various  controversial  points  at  is- 
sue. 

A    REASONABLE    TIME    FOR    EXPIRATIONS. 

On  the  subject  of  expirations,  the  supervisors  were  guided  by  the 
newly  published  rules  of  the  Department,  in  pursuance  of  the  agree- 
ment with  ^Messrs.  Bromwell  and  Weinschenk,  as  the  following  ex- 
cerpt from  their  report  to  the  committee  will  show: 

The  conceded  right  of  a  publisher  to  carry  subscribers  who  have  not 
paid  in  advance,  and  to  treat  them  as  bona  fide  subscribers  is  defined  in 
a  letter  of  instructions,  "To  All  Postmasters,"  (Circular  XXV)  dated  De- 
cember 16,  1905,  and  signed  by  Third  Assistant  Postmaster-General  Mad- 
den, as  follows:  "Expired  subscriptions  may  be  carried,  when  necessary, 
for  a  sufBcient  time  to  enable  the  publisher  to  ascertain  whether  it  is  the 
intention  to  renew.  After  the  expiration  of  such  reasonable  time,  they 
will  not  longer  be  recognized  as  actual  subscriptions,  and  in  all  cases  the 
ratio  of  the  expired  subscriptions  to  the  whole  list,  irrespective  of  the  time 
carried,  will  be  considered  and  given  weight  in  determining  the  legitimacy 
of  lists  of  subscribers  and  the  primary  design  of  the  pubhcation." 

The  conclusions  of  the  supervisors  on  this  vital  subject  were  thus 
stated : 

How  long  the  Lewis  Publishing  Company  should  be  allowed  to  carry 
subscriptions,  after  the  time  paid  in  advance  has  expired,  as  "bona  fide," 
is  a  matter  of  interpretation  of  what  is  "reasonable  time,"  upon  which  "the 
ratio  of  expired  subscriptions  to  the  whole  list"  has  bearing.  The  live  cash 
subscriptions  of  the  Woman's  Magazine,  on  December  31,  1905,  were  610,708. 
The  expired  subscriptions  which  were  on  the  mailing  list  numbered  57-2,930. 
Of  these,  318,471  expired  between  July  1,  1905,  and  January  1,  1906.  "Rea- 
sonable time,"  beyond  the  possibility  of  controversy,  it  may  be  safely  as- 
serted in  the  case  of  monthlies  of  large  circulations  and  small  subscription 
rates,  like  the  Woman's  Magazine,  is  at  least  six  months.  This  interpreta- 
tion permits  the  318,4.71  subscriptions  expiring  between  July  1,  1905,  and 

The  signatures  were  as  follows: 

*L.  B.  Tebbetts,  chairman,  vice-president  Commonwealth  Trust  Company,  and 
director  National  Bank  of  Commerce;  George  H.  Augustine,  secretary,  vice-presi 
dent  Carleton  Dry  Goods  Company;  L.  D.  Kincsland,  president  Kingsland  M'f'g  Com 
pany,  and  president  of  St.  Louis  M'f'rs'  Association;  John  B.  O'Meara,  ex-lieutenant 
governor  of  Missouri,  president  Ilill-O'Meara  Construction  Company;  I.  H.  Sawyer, 
director  Brown  Shoe  Company;  Wm.  Bagnei.l,  president  Bagnell  Lumber  Company 
director  Missouri-Lincoln  Trust  Company;  Joseph  W.  Jamison,  Jamison  &  Thomas, 
counsellors-at-law;  George  T.  Coxhead,  general  secretary,  Y.  M.  C.  A.;  Nathan 
Frank,  ex-congressman,  St.  Louis  Star-Chronicle;  Jackson  Johnson,  president  Rob- 
erts, Johnson  &   Rand  Shoe  Company. 


THE  DREYFUS  CASE  OF  AMERICA  677 

Januarj  1,  1906,  to  be  included  in  the  bona  fide  subscriptions  of  December 
31,  1905.  By  this  allowance  the  subscriptions  of  the  Woman's  Magazine, 
once  paid  in  advance  and  continued  after  the  expiration  for  renewal,  formed 
about  one-third  of  the  entire  list. 

Many  publishers  of  weekly  and  monthly  periodicals  consider  the  entire 
current  year  "reasonable  time"  for  carrying  subscriptions  not  paid  in  ad- 
vance. If  the  "reasonable  time"  for  carrying  these  subscriptions  which 
have  expired  should  be  considered  one  year,  then  the  bona  fide  subscrip- 
tions of  the  Woman's  Magazine,  as  of  date  December  31,  1905,  were 
1,182,928. 

The  committee  adopted  the  conclusion  that  a  reasonable  time 
would  be  six  months,  and  determined  the  bona  fide  subscriptions 
of  the  Woman's  Magazine,  on  this  basis,  to  be  929,179.* 

It  should  be  borne  in  mind  that  immediately  after  Lewis  was  noti- 
fied by  the  inspectors  and  the  postmaster  that  the  mailing  of  excess 
samples  to  fill  the  gaps  in  his  subscriptions  caused  by  the  prompt 
discontinuance  of  all  expired  subscriptions,  was  not  permissible,  he 
took  advantage  of  his  privilege  to  continue  expirations  for  a  longer 
period.  The  practice  thus  adopted  and  continued  up  to  the  with- 
drawal of  the  second-class  entry  from  both  publications,  more  than 
a  year  later,  was  commented  upon  by  the  supervisors'  report  to  the 
Citizens'  Committee,  as  follows: 

The  practice  of  the  Lewis  Publishing  Company,  as  stated  by  the  officers, 
is  to  go  over  the  subscription  lists  quarterly,  for  the  purpose  of  notifying 
expirations.  The  first  notice  on  an  expired  subscription  may  not  go  out 
until  the  subscription  is  three  months  past  due.  After  that  it  is  customary 
to  carry  the  subscriber,  thus  notified,  for  several  issues,  to  give  time  for 
renewal.  Every  three  months,  it  is  stated,  those  who  have  not  renewed 
within  the  six  or  nine  months'  grace  are  stricken  from  the  mailing  list.  Dur- 
ing the  year  1905,  the  single  subscriptions  to  The  Woman's  Magazine, 
new  and  old,  number  335,264.  These  subscribers  either  wrote  letters  or 
filled  out  blanks,  enclosing  the  money  or  stamps  for  their  subscriptions. 
The  correspondence  was  voluminous.  It  bore  evidence  to  the  interest 
taken  in  the  Woman's  Magazine  by  a  very  large  number  of  intelligent  read- 
ing people.  *  *  ♦  It  showed  a  distribution  covering  every  state  and 
territory  and  extending  to  postoffices  of  every  class.  It  revealed  a  definite 
and  sincere  appreciation  of  the  publication  by  the  readers.  All  these  facts 
are  to  be  weighed  in  the  consideration  of  what  constitutes  "reasonable  time" 
for  carrying  expired  subscriptions. 

No  fair-minded  person,  it  may  be  safely  assumed,  could  examine 
the  correspondence  between  the  Lewis  Publishing  Company  and 
the  Citizens'  Committee,  its  original  reports  and  exhibits,  investi- 
gate the  personnel  of  the  committee  and  the  working  force  actually 
employed  upon  the  count,  and  not  arrive  at  the  conclusion  that  its 
findings  are  above  candid  adverse  criticism.     Space  forbids  the  re- 

•Number   of   cash   subscriptions,   paid   in   advance,    of  the   Woman's   Magazine, 

for   one   year   or   more   than    one   year,   received   during   the   year    1905 597,465 

Number   of   cash    subscriptions   for    more    than    one   year,    received   during    the 

year    1904   and   alive    December   31,    1905 13,243 

Number  of  subscriptions  shown  by  the  mailing  list,  received  in  the  six  months 
prior  to  January  1,  1905,  which  expired  between  July  1,  1905,  and  Decem- 
ber 31,  1905,  and  which  were  carried  December  31,  1905,  in  expectation 
of  renewal  under  postal  provisions  permitting  a  "reasonable  time"  to 
enable  the  publisher   to   ascertain   whether  it   is  the  intention   to   renew 318,471 

Total   929,179 


578  THE  SIEGE  OF  UNIVERSITY  CITY 

production  here  of  correspondence  preserved  in  Lewis'  private 
vault.  But,  could  these  be  made  public,  they  would  but  confirm  the 
fact  that  the  investigation  was  both  searching  and  rigid,  and  that 
the  showing  made  by  the  Lewis  Publishing  Company  vindicated 
it  and  cleared  it  of  any  imputation  of  fraud.  To  make  assurance 
double  sure,  however,  Lewis  instructed  the  advertising  manager  of 
the  two  publications  to  request  an  examination  of  their  circulation 
by  the  Association  of  American  Advertisers.  The  membership  of 
this  representative  body  then  included  a  list  of  sixty-eight  na- 
tional advertisers,  in  charge  of  probably  the  largest  advertising  ap- 
propriations in  the  world.  As  a  result,  in  the  latter  part  of  Febru- 
ary and  early  part  of  March,  Clarence  Austin,  an  expert  employed 
by  this  association,  inspected  the  books  and  subscription  records 
of  the  Lewis  Publishing  Company.  Austin  states  in  his  report 
that,  on  his  arrival  at  St.  Louis,  he  learned  that  the  Citizens'  Com- 
mittee had  just  completed  its  examination.  In  this  connection,  he 
says: 

My  examination  was  made  in  the  association's  regular  way,  which  in- 
cluded verifying  individual  subscriptions,  verifying,  by  postage  receipts, 
the  total  number  of  copies  mailed;  verifying,  by  the  amount  of  white  paper 
purchased  and  consumed,  the  total  number  of  copies  printed;  and  verifying 
in  other  various  ways  the  publisher's  statement  as  to  circulation.  In  addi- 
tion, the  examiner,  by  checking  up  the  accounts  of  various  days  of  actual 
subscriptions  from  original  letters  and  coupons,  verified  the  report  of  the 
Citizens'  Committee. 

The  net  conclusion  of  this  expert  allowed  the  Woman's  Magazine 
a  total  circulation  of  one  million  and  five  hundred  thousand  copies, 
of  which  approximately  a  half-million  were  said  to  be  samples  and 
the  balance,  exceeding  one  million  copies,  regular  paid  subscriptions. 
His  conclusion  as  to  the  Woman's  Farm  Journal  allowed  a  total 
circulation  in  excess  of  six  hundred  thousand,  of  which  somewhat 
more  than  one-third  was  samples  and  approximately  two-thirds  paid 
subscriptions.  The  examiner  afterwards  verified  his  statements 
under  oath. 

Lewis  signalized  the  receipt  of  the  report  of  the  Citizens'  Com- 
mittee by  the  publication  of  a  twenty-four-page  pamphlet  entitled 
"The  Facts  of  the  Attempt  to  Assassinate  the  Woman's  Magazine 
and  the  Report  of  the  Representative  Business  Men  of  St.  Louis 
Thereon."  This  pamphlet  opens  with  a  resume  entitled  "An  Attack 
on  the  Woman's  Magazine."  This  recites  the  circumstances  with 
which  the  reader  is  now  familiar.  It  sets  forth  in  detail  the  re- 
port of  the  supervisors  to  the  Business  Men's  Committee  and  its 
report  to  the  Lewis  Publishing  Company.  It  includes  the  names 
and  addresses  of  all  those  concerned.  Copies  of  this  document 
were  widely  circulated  among  business  men  in  St.  Louis,  among 
publishers,  advertisers,  and  others  interested  in  the  publishing  in- 
dustry, and  among  the  readers  of  the  Lewis  publications. 

The  date  fixed  for  trial  on  the  indictments  was  now  approaching. 
The  report  of  the  Citizens'  Committee,  in  view  of  the  newly  pub- 


THE  DREYFUS  CASE  OF  AMERICA  679 

lished  rules  of  the  Department,  placed  the  Triumvirate  at  St.  Louis 
upon  the  defensive.  Conditions  compelled  them  to  rely  entirely 
upon  the  power  and  prestige  of  the  Department  at  Washington. 
Luckily  for  them,  Lewis'  demands  for  a  congressional  investigation, 
tlirough  his  editorials  and  the  personal  letters  of  himself  and  his 
allies  to  congressmen,  hardened  the  heart  of  Cortelyou  to  support 
the  inspectors,  "for  the  good  of  the  service." 

THE  POSTAL  LAWS  ARE  SILENT. 

The  postmaster  at  St.  Louis,  not  receiving  a  reply  to  his  letter  of 
November  1 1  to  the  third  assistant,  had  not  ventured  another  com- 
munication on  the  Lewis  case.  The  St.  Louis  inspectors  had  made 
no  further  attempt  to  communicate  with  the  third  assistant  through 
the  chief  inspector's  office.  Nor  had  the  postmaster-general  made 
reply  to  any  of  the  numerous  letters  transmitted  to  him  by  the  third 
assistant  since  October  14,  asking  for  instructions.  Madden,  in 
short,  had  been  completely  isolated  from  the  case.  As  third  assist- 
ant he  was,  however,  the  legally  constituted  officer  to  consider  and 
pass  upon  all  questions  affecting  the  rights  of  publications  to  the 
second-class  rates.  All  other  cases  than  those  of  the  Lewis  Pub- 
lishing Company  were  handled  by  ISIadden  without  any  reference  to, 
or  interference  by,  the  postmaster-general.  Ostensibly,  the  cases 
of  the  Woman's  Magazine  and  AVoman's  Farm  Journal  had  been 
referred  to  him  by  the  postmaster-general  in  July,  to  be  handled 
"along  the  usual  lines."  Actually,  they  had  been  taken  from  his 
hands. 

The  pending  trial  on  the  indictments  created  an  emergency  which 
seemed  to  require  that  the  proper  official  be  again  brought  into  the 
case.  The  silence,  which  had  concealed  from  the  third  assistant 
what  was  taking  place,  was  finally  broken,  on  March  15,  by  two  let- 
ters written  at  St.  Louis.  One  purported  to  be  from  the  postmaster 
to  the  third  assistant.  The  other  was  from  Inspector-in-Charge 
Fulton  to  the  chief  inspector.  Internal  evidence  and  the  testimony 
of  witnesses  tend  to  show  that  both  letters  were  prepared  by  Fulton. 
According  to  common  rumor  in  St.  Louis,  no  secret  was  made  of 
the  fact  that  virtually  every  important  letter  in  the  case  was  pre- 
pared by  him,  even  including  many  letters  bearing  the  signature  of 
the  postmaster-general.  Fulton  is  said  by  General  Madden  to 
have  been  the  "brains"  of  the  case.  He  is  alleged  to  have  been 
hurried  to  and  fro  between  Washington  and  St.  Louis  whenever  an 
important  letter  was  to  be  written.  The  result  is  that  the  principal 
documents  of  the  case  bear  the  unmistakable  stamp  of  a  single  over- 
active, if  not  perverse,  individuality. 

The  postmaster's  letter  of  March  15,  to  the  third  assistant,  after 
stating  that  no  reply  had  been  received  to  his  request  of  November 
11  for  instructions  as  to  the  mailings  of  the  Lewis  Publishing 
Company,  officially  reports,  for  the  first  time,  that  three  hundred 
thousand   copies   of  the   Woman's   Farm   Journal,   mailed   October 


680  THE  SIEGE  OF  UNIVERSITY  CITY 

5  to  11,  inclusive,  were  still  held  up  at  the  St.  Louis  postoffice.  This 
fact  had  been  promptly  reported  to  the  chief  inspector.  It  was 
known  to  the  postmaster-general,  but  it  had  not  previously  been  re- 
ported to  the  third  assistant.  The  postmaster  then  mentioned  the 
fact  and  nature  of  the  indictment.     His  letter  closes  thus: 

It  has  now  become  important  that  I  be  promptly  advised  as  to  what 
postage  should  be  required  on  the  copies  of  the  publications  being  held  in 
this  oflBce,  mailed  in  excess  of  the  number  the  publishers  were  legally  en- 
titled to  mail  at  the  rate  of  one  cent  per  pound,  assuming,  as  a  basis  of 
your  instructions,  that  the  number  charged  was  mailed  in  excess  of  legiti- 
mate mailings. 

The  third  assistant  promptly  transmitted  this  letter  to  the  post- 
master-general. From  his  memorandum  the  following  paragraph 
is   quoted : 

Owing  to  the  unusual  circumstances  and  the  fact  that  the  case  of  these 
publications  did  not  originate  with  and  is  not  being  treated  by  the  third 
assistant  postmaster-general,  I  referred  the  letter  of  November  11  to  you 
with  a  request  for  instructions.  You  issued  none.  *  *  ♦  For  the  same 
reasons  stated  in  connection  with  the  reference  of  the  first  letter,  I  shall 
take  no  action  upon  this  letter  of  March  15  until  I  receive  instructions  from 
you,  but  I  deem  it  proper  to  invite  your  attention  especially  to  the  last 
paragraph,  from  which  it  might  be  inferred  that  specific  instructions  wera 
issued  from  this  office.  Such  is  not  the  fact.  None  were  issued.  The  post- 
master appears  to  be  acting  under  instructions  in  the  Postal  Laws  and  Reg- 
ulations. Section  456*,  and  such  other  as  may  have  been  issued  to  him  by 
other  officers. 

WHAT  THE   ATTORNEYS   WILL   NEED. 

At  the  same  time  the  postmaster's  letter  of  March  15  was  mailed, 
Fulton  addressed  a  letter  to  Vickery,  in  which  affairs  as  they  ex- 
isted in  St.  Louis  were  frankly  reviewed.  After  rehearsing  the 
eseential  circumstances  regarding  the  finding  of  the  indictment, 
Fulton  continues: 

It  is  necessary  in  the  prosecution  of  the  case  to  show  that  the  postage 
on  these  excess  mailings  required  by  the  Department  to  be  paid  (assum- 
ing we  prove  the  mailing  in  excess  of  the  number  to  which  the  publishers 
r.re  entitled)  is  one  cent  per  copy,  or  for  each  four  ounces,  when  sent  to 
a  single  address.  In  the  preparation  for  trial  by  Inspectors  Sullivan,  Stice 
and  Ileid,  involving  a  careful  examination  of  the  postal  laws  on  this  point, 
it  develops  that  there  is  an  apparent  failure  to  specifij  the  exact  course  to 
be  pursued  by  the  postmaster  in  the  icay  of  collections  of  postage  on 
abuses  such  as  the  one  now  in  court*  *  *  *  It  has  apparently  been 
left  to  paragraph  six.  Postal  Laws  and  Regulations,  section  456  (above 
quoted)  to  deal  with  such  cases  as  the  one  now  in  court,  ♦  ♦  *  and  the 
postmaster  is  instructed  to  promptly  report  the  case  to  the  third  assistant 
postmaster-general.     There  is  absolute  silence  as  to  what  postage  is  charge- 


•This  section  of  the  Postal  Laws  and  Regulations,  referred  to  by  the  third  assist- 
ant, is  as  follows: 

"The  mailing  by  a  publisher  of  sample  copies,  of  a  larger  number  than  actually 
subscribed  for,  in  order  to  maintain  a  given  circulation,  or  tlie  continuous  carrying 
of  sample  copies  in  excess  of  one  hundred  per  cent  of  tlie  number  issued  to  regular 
subscribers,  or  of  such  copies  continuously  to  the  same  person,  will  be  deemed  evi- 
dence that  the  publication  is  primarily  designed  for  advertising  and  free  circulation 
(see  Sec.  426),  and  the  sample  copies  should  be  detained  until  the  fact  can  be  ascer- 
tained. The  postmaster  will  promptly  report  the  case  to  the  third  assistant  post- 
master-general." 


THE  DREYFUS  CASE  OF  AMERICA  681 

able  on  these  excess  mailings*     The  postmaster  did  report  these  facts  No- 
vember 11,  to  the  third  assistant,  but  received  no  reply.    *    *     * 

No  mention  was  made  by  Fulton  that  an  interval  of  thirty  days 
had  elapsed  between  the  impounding  and  the  date  on  which  the 
postmaster  made  his  report,  nor  to  the  further  fact  that  the  letter 
to  which  he  referred  did  not  mention  the  fact  that  three  hundred 
thousand  copies  of  the  Woman's  Farm  Journal  had  been  held  up. 
After  referring  to  the  copies  impounded,  Fulton's  letter  proceeds: 

What  the  attorneys  will  need  as  evidence  through  the  postmaster,  will 
be  the  latter's  testimony  to  the  effect  that  the  legal  rate  chargeable  on  these 
publications  mailed  in  excess  of  the  number  to  which  the  publishers  were 
entitled,  is  one  cent  per  copy,  (or  for  each  four  ounces),  when  sent  to  a 
single  address.  The  postal  latcs  being  silent  on  that  direct  proposition,  it 
is  necessary  that  he  be  instructed  by  the  proper  officer  of  the  Department, 
either  to  that  effect  directly,  or  to  the  effect  that  the  same  postage  is  ap- 
plicable as  is  required  under  paragraph  five  of  section  456,  postal  laws, 
which  refers  to  abuses  of  similar  character.  I  have  requested  the  post- 
master to,  this  day,  make  this  inquiry  direct  to  the  third  assistant  post- 
raaster-general.  It  is  desired  that  you  take  the  matter  up  with  the  proper 
officer,  that  such  instructions  may  be  given  the  postmaster,  as  is  necessary 
to  enable  him  to  properly  act  and  testify  on  a  matter  not  made  clear  by 
existing  regidations. 

Fulton  does  not  explain  how  (the  postal  laws  and  regulations  be- 
ing "silent  on  that  direct  proposition")  Lewis  and  his  associates 
could  be  charged  with  intent  to  defraud  the  Government  by  not 
offering  to  pay  the  difference  between  the  pound  rate  and  some  other 
unascertained  rate,  as  to  the  basis  for  computing  which  the  official 
publication  of  the  Department  was  "silent."  Neither  does  Fulton 
indicate  how,  he  and  the  postmaster  being  wholly  uninstructed  by 
the  'proper  officer,"  could  assume  that  a  crime  had  been  com- 
mitted; nor  on  what  theory  of  the  law  an  indictment  was  found. 
Fulton,  on  the  witness  stand,  admitted  that  he  acted  solely  upon  his 
own  construction  of  the  postal  law,  but  shifted  to  the  district  attor- 
ney the  responsibility  for  the  return  of  the  indictments.  The  fact 
is,  that  Fulton  laid  before  the  district  attorney  the  information  upon 
which  he  acted.  He  was  not  only  an  officer  of  the  Department,  but 
was  himself  a  lawyer.  He  presumably  was  familiar  with  the  postal 
laws.  He  admits  having  recommended  the  indictments,  and  the 
district  attorney  himself  admits  that  he  deferred  wholly  to  Fulton's 
judgment. 

THE  INSPECTORS  INTERPRET  THE  LAW. 

Four  days  later,  on  March  19,  Inspectors  Stice,  W.  T.  Sullivan, 
and  Reid,  in  .a  special  report  to  Inspector-in-Charge  Fulton  at 
St.  Louis,  called  attention  to  another  matter,  in  connection  with 
the  prosecution  of  the  conspiracy  charge  against  Lewis,  on  which 
it  was  necessary  to  have  a  precise  construction  from  the  proper 
officer  of  the  Postoffice  Department  of  certain  sections  of  the  Postal 
I^aws  and  Regulations.     After  quoting  sundry  sections  of  the  law, 


•The  italics  here  and  in  the  next  following  pages  are  the  author's.     The  phrases 
tfaus  italicized  are  worthy  of  particular  consideration. 


892  THE  SIEGE  OF  UNIVERSITY  CITY 

the  inspectors  remark  that  in  neither  section  is  it  specifically  stated 
what  constitutes  a  legitimate,  regular  or  actual  subscriber.  One 
section,  in  their  opinion,  seems  to  define  the  word  "legitimate"  as 
used  elsewhere,  to  mean  "those  who  seek  and  pay  for  the  publica- 
tion with  their  own  money."  Another  section,  they  think,  seems 
to  define  a  legitimate  subscriber  as  one  who  is  paid  up,  or  in 
other  words  who  has  paid  his  subscription  in  advance.  The  inspec- 
tors' comment  is  as  follows: 

Had  this  section  been  left  for  the  construction  of  the  court,  we 
would  not  deem  this  inquiry  necessary,  as  under  this  definition  it 
appears  that  no  expired  subscription  could  be  considered  legitimate  in 
the  meaning  of  the  law  governing  second-class  publications;  and  that  when 
the  subscriber  ceases  paying  for  the  publication,  and  has  not  before  or  at 
the  time  of  expiration,  voluntarily  indicated  his  desire  to  continue  same, 
he  is  not  considered  a  legitimate,  regular,  or  actual  subscriber,  after  ex- 
piration of  the  tune  for  which  he  sought  and  paid  for  the  publication. 

The  insjjcctors'  request  for  a  ruling  seems  to  have  been  regarded 
as  necessary,  because  of  the  new  instructions  (Circular  XXV),  is- 
sued in  pursuance  of  the  Bromwell-Weinschenk  agreement  on  De- 
cember 16,  preceding.  These,  in  their  direct  rulings,  according  to 
the  inspectors,  appear  to  support  their  construction  as  to  the  ille- 
gitimacy of  expired  subscriptions.  They  complain,  however,  that 
a  qualification  is  made  which  creates  a  doubt  as  to  what  construc- 
tion is  intended.  They  therefore  call  attention  to  the  paragraph 
heretofore  quoted  by  the  Business  Men's  Committee,  in  which  the 
Department  expressed  the  rule  as  follows:  "Expired  subscriptions 
may  be  carried,  when  necessary,  for  a  sufficient  time  to  enable  the 
publisher  to  ascertain  whether  it  is  the  intention  to  renew."  The 
letter  concludes  with  a  complaint  to  the  effect  that  this  ruling  has 
been  seized  upon  by  the  Lewis  Publishing  Company  as  a  basis  for 
defense.  The  inspectors  deplore  this  official  ruling  of  the  Depart- 
ment in  the  following  extraordinary  language: 

This  not  only  renders  uncertain  what  is  intended  by  the  construction  as 
to  legitimacy  of  subscriptions  based  on  expirations.  It  also  destroys  the 
definition  of  a  legitimate  subscription  based  on  what  seems  to  be  a  rea- 
sonable constraction  of  the  postal  laws,  section  436.  It  has  placed  in  the 
hands  of  Lewis,  and  other  unscrupulous  publishers,  a  means  for  extended 
abuses  of  the  second-class  privileges,  by  apparently  legalizing  expirations 
covering  such  extended  periods  as  are  necessary  to  meet  their  needs,  by 
their  own  construction  of  what  is  a  "reasonable  time."  It  also  renders  diffi- 
cult the  prosecution  of  publishers  for  abuses  of  the  second-class  privilege. 

The  inspectors,  in  other  words,  appear  to  have  believed  that 
they  should  enforce  their  own  construction  of  what  should  consti- 
tute a  legitimate  list  of  subscribers  within  the  meaning  of  the  law. 
They  did  not  choose  to  have  their  own  construction  set  aside,  even 
by  a  departmental  ruling.  They  point  out  that  Lewis  had  taken 
advantage  of  the  new  ruling  to  carry  a  large  number  of  expirations 
as  a  part  of  his  legitimate  subscription  list.  They  complain  that, 
if  permitted  to  make  use  of  the  new  rulings  in  this  manner,  he 
would  be  allowed  to  mail  nearly  three  million  copies,  whereas  they 


THE  DREYFUS  CASE  OF  AMERICA  688 

insist  the  "actual  legitimate  subscription  lists  of  both  publica- 
tions" aggregated  only  681,229  in  October,  1905.  They  observe 
that  Lewis  was  then  mailing  about  two  million  copies,  or  some 
seven  hundred  and  fifty  thousand  more  than  they  decided  he  had  a 
right  to  mail.  The  inspectors  refer  to  the  report  of  the  Citizens' 
Committee  regarding  the  legitimacy  of  the  list  in  the  following 
manner: 

Lewis  and  the  committee  which  recently  counted  his  subscriptions  have 
shown  themselves  well  pleased  with  the  ruling  heretofore  referred  to.  They 
have  liberally  quoted  it  in  support  of  their  contention  that  they  are  entitled 
to  mail,  monthly,  2,986,98!2  copies  of  the  two  publications.  Lewis  contends, 
we  are  advised,  that  expirations  should  be  carried  for  one  year  as  legiti- 
mate subscriptions,  and  that  these  should  be  added  to  his  list  on  the  Wom- 
an's Magazine  alone  to  the  number  of  572,220,  with  the  privilege  of  send- 
ing an  equal  number  of  sample  copies  of  tin;  publication.  *  *  *  With- 
out the  "reasonable  time"  extension  clause  *  *  ♦  there  seems  to  be 
nothing  tangible  in  the  postal  laws  on  which  there  could  be  hung  the  de- 
fense now  put  forth  by  Lewis  and  his  committee.  *  *  *  Whatever 
necessity  there  may  have  appeared  for  the  Department's  quiet  application 
of  this  liberal  policy  to  publications  in  certain  cases,  the  reason  is  not 
apparent  to  us  (sic)  for  the  publication  of  it  to  them  through  postmas- 
ters, after  the  investigation  of  the  Lewis  case  was  well  under  way.  How- 
ever this  may  be,  it  is  peculiarly  unfortunate  at  this  time,  since  it  will  be 
eagerly  grasped  and  used  by  Lewis  in  an  attempt  to  embarrass  and  preju- 
dice the  criminal  prosecution  of  the  officers  of  this  company  in  St.  Louis, 
where  an  effort  is  being  made  to  protect  the  interests  of  the  Government 
by  checking  the  wholesale  frauds  against  its  revenues. 

The  propriety  of  the  postmaster's  rulings  limiting,  for  the  first 
time  in  the  history  of  the  Department,  a  publisher's  legitimate 
subscription  list  to  his  current  paid-in-advance  subscriptions,  hav- 
ing thus  been  challenged,  the  inspectors  themselves  thus  define  the 
issue: 

In  the  case  now  pending,  it  is  necessary  to  have  a  construction  of  this 
law.  We  have  to  request,  therefore,  that  a  specific  departmental  ruling 
be  made  on  the  following  question:  "Is  the  person  whose  subscription 
payment  has  expired  considered  a  regular,  actual  and  legitimate  sub- 
scriber, after  the  expiration  of  the  time  for  which  the  subscriber  paid, 
provided  such  person  has  not  indicated  his  intention  to  renew?"  If  it  is 
intended  by  the  note  of  instructions  referred  to,  to  so  modify  section  436 
as  to  admit  of  the  gross  abuse  being  practiced  as  a  result  of  such  modi- 
fication in  the  Lewis  Publishing  Company  case,  and  will  be  practiced  by 
other  publications,  it  becomes  necessary  that  we  know  definitely,  for  the 
purposes  of  this  case,  what  is  considered  by  the  Department  a  reasonable 
time  for  expirations  to  be  sent  at  second-class  rates,  and  whether  the  send- 
ing of  an  equal  number  of  sample  copies  is  to  be  allowed  to  be  practiced 
thereon.  We  believe,  therefore,  that  it  is  important,  and  necessary,  to  meet 
the  emergencies  of  the  situation  at  the  present  time,  that  the  Department 
make  specific  rulings  on  the  points  noted. 

THE    "doctored"    RULING. 

General  Madden  comments  before  the  Ashbrook  Committee  on 
this  situation  as  follows: 

Inspector  Fulton's  "personal"  letter  of  March  15  to  the  chief  postoffice 
inspector  was  forwarded  to  the  third  assistant.  The  design  was  to  have 
the  "proper  officer  of  the  Department"  advise  the  St.  Louis  postmaster  that 
the  rate  of  postage  on  the  300,727  copies  of  the  Farm  Journal  impounded 


684  THE  SIEGE  OF  UNIVERSITY  CITY 

at  St.  Louis  was  one  cent  for  each  four  ounces  or  fraction,  because  the  pos- 
tal laws  had  been  found  to  be  "silent  on  that  direct  proposition."  The 
third  assistant  responded,  on  March  22,  to  the  chief  postoffice  inspector 
hhnself,  and  called  attention  to  the  irregularities  in  the  case.  He  made  it 
clear  that  it  was  not  being  handled  "along  the  usual  lines."  This  declina- 
tion of  the  "proper  officer"  to  proceed  as  if  the  matter  were  being  handled 
"along  the  usual  lines"  brought  the  postmaster-general  into  the  case,  to 
compel  the  third  assistant  to  act.  Tiie  postmaster-general  now  spoke  for 
the  first  time  in  five  months.  On  March  22,  1906,  the  same  day  the  third 
assistant  replied  to  the  chief  postoffice  inspector,  virtually  declining  to 
address  the  local  postmaster,  the  postmaster-general  broke  silence  as  fol- 
lows: "The  letter  addressed  to  you  by  the  postmaster  at  St.  Louis,  Mo., 
under  date  of  March  15,  to  which  was  attached  your  communication  to  me 
of  March  17,  is  herewith  returned.  You  will  please  inform  the  postmaster 
at  St.  Louis,  in  response  to  his  inquiry,  the  amount  of  postage  which  should 
be  collected  on  copies  of  the  Woman's  Magazine  and  the  Woman's  Farm 
Journal,  now  withheld  from  transmission  by  him  as  being  in  excess  of  the 
immber  of  copies  which  the  publishers  are  legally  entitled  to  transmit  at 
the  second-class  rate  of  postage;  assuming,  as  the  basis  of  your  instruc- 
tion to  the  postmaster,  that  the  number  of  copies  of  each  publication 
charged  by  him  as  having  been  mailed  in  excess  of  that  authorized  by  law, 
ij  correct.  It  is  requested  that  your  letter  of  instructions  to  the  postmaster 
at  St.  Louis  be  submitted  to  me  before  transmission." 

This  letter  of  the  postmaster-general  to  the  third  assistant  is  another 
disclosure  of  the  unusual  lines  which  were  being  followed  in  this  case,  and 
of  the  methods  which  were  being  employed  to  accomplish  results  in  St. 
Louis.  This  was  the  first  instance  in  history  of  the  postmaster-general  re- 
quiring the  third-assistant  to  submit  for  scrutiny  a  ruling  made  by  him  and 
over  his  name  and  official  title.  As  the  letter  of  the  local  postmaster  to 
the  third  assistant,  March  15,  and  the  "personal"  letter  of  Inspector  Ful- 
ton of  the  same  date  to  the  chief  postoffice  inspector,  both  show,  a  ruling 
by  the  "proper  officer"  was  required  to  supply  the  deficiency  in  the  postal 
laws,  for — "W^hat  the  attorneys  will  need  as  evidence  through  the  post- 
master, will  be  testimony  to  the  effect  that  the  legal  rate  chargeable  on 
these  publications  mailed  in  excess  of  the  number  to  which  the  publishers 
were  entitled,  is  one  cent  per  copy  (or  for  each  four  ounces)  when  sent 
to  a  single  address." 

Here  it  is  necessary  to  make  an  explanation.  It  has  been  stated  that 
the  third  assistant  postmaster-general  was  reforming  the  abuses  of  the 
second  class  of  mail  matter.  One  of  the  alleged  abuses  was  the  mailing  of 
too  many  sample  copies  by  publishers.  That  was  regarded  as  an  abuse, 
although  the  law  gave  them  an  unlimited  privilege  while  the  publication 
remained  of  the  second  class.  The  real  remedy  of  the  Department  was  to 
rule  such  a  publication  out  of  the  second  class.  But  the  reform  was  de- 
signed to  be  conducted  with  as  little  damage  to  the  publishing  industry  as 
possible. 

The  office  ruling  of  the  third  assistant  was  to  the  effect  that  any  publi- 
cation of  which  more  sample  copies  were  regularly  mailed  than  subscribers' 
copies,  would  not  be  admitted  to  the  second  class,  on  the  groiuid  that  it 
was  })rimarily  designed  for  free  circulation,  and  so  prohibited  by  law. 
Tliat  rule  served  on  the  question  of  admission.  Under  the  Act  of  1901, 
H  pui)lication  could  not  be  ruled  out  of  the  second  class  for  any  cause, 
until  a  hearing  had  l)een  accorded  the  publisher.  It  was  tlie  practice  also 
at  such  hearings,  to  decide  not  to  rule  against  the  publication,  if  the  pub- 
lislier  would  cease  his  violation  of  the  limitation,  and  observe  the  rule  of 
one  hundred  per  cent  of  sample  copies  upon  his  subscription  list.  This 
practice  is  clearly  stated  in  the  case  of  Conant  v.  Payne.  Conant  issued 
a  publication  known  as  "^Salvation."  He  was  warned  that  excess  mailings 
of  sample  copies  would  cause  his  publication  to  be  ruled  out.  He  con- 
tinued, nevertheless.     He  was  then  cited  to  a  hearing,  as  required  by  the 


THE  DREYFUS  CASE  OF  AMERICA  585 

Act  of  1901.  He  stood  upon  what  he  conceived  his  right  to  mail  without 
limit.  The  third  assistant  ruled  his  publication  out  of  the  second  class. 
Conant  then  applied  to  the  court.  The  court  sustained  the  ruling  of  the 
Department. 

General  Madden,  in  other  words,  asserts  that  even  if  the  Lewis 
Publishing  Company  had  been  declared  guilty  of  mailing  an  exces- 
sive number  of  sample  copies  (which  he  elsewhere  decides  not  to 
have  been  the  case),  it  was  not  chargeable  with  an  indictable  oiFense. 
No  statute  made  such  an  act  criminal.  The  law  gave  the  company 
the  unquestioned  right  to  mail  sample  copies.  The  procedure 
adopted  by  the  St.  Louis  Triumvirate  was  therefore  without  color- 
able basis.  The  proper  course  would  have  been  to  cite  the  company 
to  a  hearing  before  the  third  assistant.  He  would  then  have 
warned  the  officers  of  the  company  that,  if  such  practices  were 
continued,  the  second-class  privilege  would  be  withdrawn.  No 
such  citation  was  ever  made.  The  company  was  not  officially 
warned.  All  other  mail  order  publications,  on  the  contrary,  were 
exempted  from  the  operation  of  a  strict  construction  of  the  regula- 
tions pending  the  publication  of  the  new  rulings  (Circular  XXV). 
and,  thereafter  for  four  months  prior  to  April  1,  1906,  when  these 
were  to  become  effective.  The  only  warning  given  the  Lewis  Pub- 
lishing Company  was  a  verbal  notice  by  the  postmaster  at  St.  Louis 
of  the  detention  of  its  mail  upon  which  postage  had  been  paid, 
followed  by  the  indictment  of  the  company's  officers.  Lewis  promptly 
discontinued  the  practices  complained  of,  and  the  company  then 
began  to  avail  itself  of  its  right  to  carry  expirations,  or  credit 
subscriptions,  for  a  reasonable  time.  Notwithstanding  all  this,  the 
Triumvirate  at  St.  Louis  persisted  in  requesting  a  ruling  by  the 
third  assistant  such  as  "the  attorneys  will  need"  to  complete  the 
destruction  of  the  company  and  to  put  its  officers  in  jail.  The 
following  excerpt  is  taken  verbatim  from  the  record  of  the  con- 
gressional investigation   touching  this  vital  point: 

Mr.  Madden:  We  return  now  to  the  letter  of  the  postmaster-general, 
Mr.  Madden,  dated  March  22.  He  directs  that  the  postmaster  at  St.  Louis 
be  informed  of  the  amount  of  postage  which  should  be  collected  upon  copies 
of  those  magazines,  "assuming  as  the  basis  of  the  instructions  to  the 
postmaster,  that  the  number  of  copies  of  each  publication  charged  by  him 
as  having  been  mailed  in  excess  of  that  authorized  by  law,  is  correct." 
The  third  assistant  could  not  be  mistaken  as  to  what  was  wanted.  But,  as 
prepared,  the  ruling  would  have  disclosed  the  fraud  in  the  indictments, — 
that  is,  as  to  the  "form  of  the  statute." 

Mr.  Alexaxder:  In  other  words,  they  were  going  to  give  that  rule  the 
effect  of  law,  while  there  was  no  statute  to  that  effect? 

Mr.  McCoy:  I  can  not  see  myself  how  that  administrative  rule  had 
anything  to  do  with  the  indictment. 

Mr.  Madden:  It  did  not.  That  is  just  the  complaint.  They  wrote  that 
administrative  rule  into  that  indictment. 

Mr.  McCoy:  I  do  not  believe  that  it  will  be  necessary  for  you  to  argue 
the  proposition  that  there  could  not  be  any  indictment  for  crime,  based 
on  a  violation  of  an  administrative  order.  If  that  is  what  you  are  arguing, 
I  think  it  is  unnecessary.  I  do  not  believe  for  a  moment  that  the  com- 
mittee would  hold  against  you  on  that  proposition. 

Mr.  Bbitt;   That  could  not  be  done. 


586  THE  SIEGE  OF  UNIVERSITY  CITY 

Mr.  McCoy:  Now,  you  are  on  record  as  saying  that  an  indictment  could 
not  be  based  on  an  administrative  regulation  of  the  Department. 

Mr.  Buitt:    Certainly.     If  it  was  attempted,  it  was  not  well  founded. 

Mb.  Madden:  The  ruling  of  the  third  assistant  was,  however,  as  direct- 
ed, submitted  to  the  postmaster-general  "before  transmission."  If  came 
back  edited.  That  part  of  it  which  would  have  defeated  the  purpose  in 
St.  Louis  was  eliminated.  The  postmaster-general  required  that  it  be  re- 
written as  edited.  That  was  done.  The  letter  was  forwarded,  as  edited, 
March  30,  1906.  This  editing  of  the  ruling  to  make  it  supply  the  needs 
of  the  attorneys  in  St.  Louis,  because  the  postal  laws  were  found  to  be 
"silent  on  that  direct  proposition,"  was  under  the  advice  of  the  assistant 
attorney-general  for  the  PostofEce  Department,  who  has  been  named  as  one 
of  the  conspirators  in  the  case.  As  the  procedure  shows,  it  was  all  im- 
portant that  the  third  assistant,  "the  proper  officer  of  the  Department," 
should  make  this  ruling.  Then,  on  the  face  of  the  record,  the  case  would 
appear  to  have  been  handled  "along  the  usual  lines." 

The  famons  doctored  ruling  was  in  response  to  Postmaster 
Wyman's  letter  of  March  15.  The  paragraph  in  question  follows. 
The  sentence  in  brackets  was  stricken  out  by  the  advice  of  Assist- 
ant Attorney-General  Goodwin.  This  action  had  Cortelyou's  ap- 
proval and  consent.     Moddcn,  in  this  letter,  said: 

Assuming,  as  a  matter  of  fact,  that  the  copies  withheld  from  transmis- 
sion in  the  one  case  and  mailed  in  excess  in  the  other,  are  copies  in  excess 
of  the  number  which  the  publishers  are  entitled  to  mail  at  the  pound  rate 
of  postage,  as  stated  in  your  letter,  then  [unless  sucti  excess  is  great  enough 
to  establish  that  the  publication  is  "designed  primarily  for  advertising 
purposes,  or  for  free  circulation,  or  for  circulation  at  nominal  rates,"  and 
thus  exclude  the  publication  from  the  second  class  altogether,  a  matter 
which  can  be  determined  onlv  after  a  hearing  before  this  bureau  under  the 
act  of  March  3,  1901— ch.  851,  31  St.  L.,  1107,  sec.  444  P.  L.  and  R.],  such 
excess  copies  are  chargeable  at  the  rate  of  one  cent  for  each  four  ounces 
or  fraction  thereof,  prepaid  by  stamps  affixed. 

The  effect  of  the  clause  thus  stricken  out  was  to  assert  the 
prerogative  of  the  third  assistant  to  determine  the  facts  at  issue 
on  a  hearing,  and  to  direct  attention  to  the  law  requiring  that 
such  hearing  be  had.  Obviously  this  would  not  be  the  sort  of  evi- 
dence the  "attorneys  will  need."  The  letter,  as  edited,  was  signed 
by  the  third  assistant  and  dispatched  under  date  of  March  30.  The 
following  is  the  explanation  given  by  General  Madden  of  his  mo- 
tives in  so  doing: 

A  brief  personal  explanation  is  called  for  here.  I  was  third  assistant 
postmaster-general  when  the  letter  of  instruction  to  tiie  St.  Louis  post- 
master, dated  March  27,  1906,  came  back  from  the  postmaster-general 
edited.  Mr  impulse  was  to  resign.  But  there  were  many  reasons  why  1 
should  not.  *  *  *  If  I  had  done  so,  it  would  have  been  impossible  to 
have  obtained  copies  of  the  complete  record.  My  thouglit  was  tliat,  if  it 
came  to  an  actual  trial  of  Lewis  and  the  others  on  those  fraudulent  indict- 
ments, and  this  doctored  ruling  of  mine  were  made  use  of,  I  would  do  mj 
duty  as  a  citizen  and  go  to  St.  Louis  and  testify.  My  remaining  in  tlie 
service  made  it  possible  for  me  to  lay  before  this  committee  the  indisput- 
flble  evidence  of  the  conspiracy  which  I  charged. 

THE    THIRD    CAMPAIGN    OF    THE    TRIUMVIRATE. 

The  postmaster  at  St.  Louis,  in  response  to  this  letter,  states 
that  the  Triumvirate  held  a  joint  conference  on  March  28  to  dis- 
cuss the  letter  of  the  third  assistant,  dated  March  22,  to  the  chief 


THE  DREYFUS  CASE  OF  AMERICA  587 

inspector.  It  was  deemed  necessary,  he  says,  to  ask  for  similar 
instructions  as  to  past  and  future  issues  of  both  publicatione.  In- 
structions, in  effect  similar  to  the  doctored  ruling,  were  forwarded 
by  the  third  assistant  on  April  6,  having  first  been  submitted  to 
the  postmaster-general  and  initialed  "O.  K.,  G.  B.  C."  The  post- 
master, thus  armed,  proceeded  promptly  to  lead  a  fresh  assault. 
On  April  6,  Lewis  received  from  him  the  following  communication: 
From  facts  obtained,  which,  in  my  judgment,  justify  me  in  the  conclu- 
sion that  the  legitimate  subscriptions  to  the  Woman's  Farm  Journal  are 
not  to  exceed  141,328,  and  that  you  are  entitled  to  transmit  through  the 
mail  at  the  pound  rate  not  to  exceed  282,656  copies  of  that  publication, 
including  sample  copies,  you  are  hereby  notified  that  transient  second- 
class  postage  at  the  rate*  of  one  cent  for  each  four  ounces  or  fraction 
thereof,  must  be  prepaid  by  stamps  aiRxed  on  all  copies  of  said  publica- 
tion in  excess  of  your  legitimate  mailings,  as  above  indicated,  hereafter 
presented  by  your  company.  If  not  so  prepaid,  it  will  be  necessary  for 
me  to  refuse  to  accept  such  excess  for  transmission  through  the  mails. 
This  notice  does  not  in  any  way  waive  any  claim  of  the  United  States 
against  your  company  for  previous  mailings  of  this  or  other  publications 
at  the  pound  rate,  in  excess  of  your  legitimate  mailings  under  the  Postal 
Laws  and  Regulations  of  the  Department. 

To  Wyman's  letter,  Lewis  responded  with  the  following  protest: 
Your  communication  of  April  6,  1906,  was  duly  received.  The  Lewis 
Publishing  Company  is  fully  informed  of  the  number  of  subscriptions  to 
the  Woman's  Farm  Journal,  and  begs  leave  to  advise  you  that  the  state- 
ment of  the  number  thereof  in  your  letter  is  not  correct,  whatever  may 
be  sources  of  your  information.  Tlie  Lewis  Publishing  Company  has  no 
intention  whatever  to  violate  the  postal  laws  in  any  particular,  but  it 
intends  to  protect  its  interests  and  those  of  its  stockholders  against  any 
attempt  to  deprive  that  company  of  its  rights  under  the  laws.  This  Com- 
pany protests  against  your  demand  for  additional  postage  on  copies  of 
the  Woman's  Farm  Journal,  offered  for  mailing  at  your  office,  under  the 
second-class  entry  of  that  magazine. 

Lewis,  after  writing  this  letter  to  Wyman,  called  on  the  same  day 
on  the  postmaster  and  stated  the  intention  of  appealing  from  his 
decision.  On  that  very  day  he  did,  in  fact,  forward  an  appeal  to 
Washington,  not,  however,  through  the  postmaster  at  St.  Louis, 
the  third  assistant,  or  the  postmaster-general.  Despairing  of 
justice  at  the  hands  of  these  officials,  he  appealed  over  their  heads,, 
directly  to  the  committee  on  Postoffices  and  Post  Roads  of  the 
House  of  Representatives.  This  appeal  took  the  form  of  a  lengthy 
communication  to  the  chairman.  Congressman  Overstreet,  whom 
Lewis  had  personally  interviewed  in  Washington.  By  this  move 
Lewis  was  successful  at  last  in  touching  an  efficient  spring  of  de- 
partmental activity.  The  career  of  an  administrative  officer  hinges 
largely  upon  his  ability  to  command  the  good-will  of  Congress. 
This  obtains  not  only  as  regards  proposed  measures  of  legislation, 
but  also  as  touching  upon  all  the  important  annual  appropriations. 
Congress  is  the  paymaster.  The  chairman  of  the  powerful  com- 
mittee on  Postoffices  and  Postroads  is  a  personage  with  whom  the 
postmaster-general  can  ill  afford  to  quarrel.  Accordingly  Lewis 
appeal,  when  transmitted  by  Overstreet  to  Cortelyou,  was  received 


688  THE  SIEGE  OF  UNIVERSITY  CITY 

with  at  least  apparent  deference.  Cortelyou,  therefore,  on  April 
14,  forwarded  Lewis'  appeal  to  Madden,  stating  the  circumstances 
and  nature  of  the  grievance  and  closing  with  the  following  in- 
structions : 

You  will  please  immediately  institute  an  investigation  for  the  purpose 
of  determining  whether  the  Woman's  Farm  Journal  and  the  Woman's 
Magazine,  issued  by  the  I,ewis  Publishing  Company,  are  entitled  to  second- 
class  privileges,  and  if  so,  what  number  of  copies  of  each  publication 
should  be  admitted  to  the  mails  monthly  at  the  rate  of  one  cent  per  pound. 
This  investigation  should  be  thorough  and  comprehensive.  In  pursuance 
of  it  the  company  should  be  afforded  early  opportunity  to  be  fully  heard 
upon  the  questions  involved. 

The  case  was  thus  once  more  in  the  hands  of  the  third  assistant. 
He  proceeded  to  deal  with  it  according  to  the  practices  of  his 
bureau.  He  instructed  the  chief  postotiice  inspector  to  furnish 
copies  of  all  ev'idence  in  his  possession  bearing  upon  the  question  as 
to  the  number  of  subscribers  constituting  the  legitimate  list  of 
the  Woman's  Farm  Journal.  He  directed  the  postmaster  to  fur- 
nish all  the  evidence  in  his  possession  touching  the  alleged  excess. 
He  informed  the  Lewis  Publishing  Company  that,  although  its 
letter  to  Representative  Overstreet  could  not  "in  strictness  be  said 
to  constitute  an  appeal,"  it  would  be  treated  as  such,  and  that  the 
company  would  be  accorded  an  opportunity,  on  April  27  (which 
date  was  afterwards  changed  to  April  29),  to  present  its  evi- 
dence. The  statement  was  also  made  in  this  connection  that  its 
second-class  entry  was  in  dispute. 

The  chief  postoffice  inspector  informed  the  third  assistant  that  he 
was  unable  to  furnish  either  originals  or  copies  of  the  inspectors' 
reports,  it  being  the  custom  of  his  office,  whenever  an  indictment 
had  been  returned,  to  submit  all  books  to  the  Department  of  Jus- 
tice. All  the  papers  were,  therefore,  said  to  be  in  the  possession 
of  the  United  States  district  attorney  in  St.  Louis.  This  letter 
closes  thus: 

As  Mr.  Lewis  has  very  bitterly  assailed  the  character,  motives  and  intel- 
ligence of  the  inspectors  who  have  made  the  investigation,  it  is  suggested 
that  an  investigation  on  independent  lines,  as  far  as  possible,  will  be  more 
satisfactory  to  this  office.  I  have  to  ask  that  the  statements  of  the  inspec- 
tors shall  not  be  used  in  your  investigation,  unless  your  representatives 
shall  be  satisfied  that  they  are  founded  upon  fact. 

WYMAN    is   REBUKED. 

The  postmaster  responded  with  a  lengthy  communication,  express- 
ing his  regret  that  the  third  assistant  had  not  seen  fit  to  comply 
with  his  request  that  the  papers  submitted  by  the  company  be 
placed  in  his  possession.  Being,  as  he  expressed  it,  "blinded  as 
to  what  particular  issues  Lewis  has  raised  in  his  appeal,"  the  post- 
mater  went  into  the  case  in  great  detail.  He  expressed  his  mis- 
givings as  to  the  outcome  as  follows: 

The  ramifications  arc  so  great,  and  the  evidence  so  intricate  and  neces- 
sary of  explanation  in  many  particulars,  and  the  time  is  so  short,  that  1 
do  not  hesitate  to  say  1  fear  that,  if  this  is  to  be  the  extent  to  which  the 
Government  is  to  be  heard  in  this  appeal,  its  interests  will  be  inadequately 


THE  DREYFUS  CASE  OF  AMERICA  689 

represented.  Especially  will  this  be  true,  if  Mr.  Lewis  is  there  in  person 
with  his  profuse  and  specious  explanations  and  representations,  with  no- 
body (acquainted  with  the  facts)  there  to  combat  him.     *     *     * 

Lewis  has  vilified  and  maligned  every  officer  in  any  way  connected  with 
the  issuance  of  the  fraud  order  against  him,  from  the  head  of  the  Depart- 
ment down,  including  the  judge  of  the  United  States  court.  He  has 
placed  all  of  them  in  the  category  of  thieves,  conspirators,  dishonest  offi- 
cials, dupes,  or  incompetents.  In  letters  signed  by  Lewis  and  in  articles 
published  regularly  by  him  since  tlie  fraud  order  was  made  effective,  all 
of  which  are  teeming  with  anarchistic  statements  and  charges  of  official 
corruption,  your  name  alone,  as  an  official,  has  received  favorable  com- 
ment. The  effect  of  this  on  thousands  of  his  credulous  readers  is  appall- 
ing, as  is  evidenced  by  the  fact  that  not  only  I,  as  postmaster,  but  other 
officials  of  the  Department  here  in  St.  Louis,  iiave  received  many  letters 
of  vituperative  condemnation  for  the  course  we  have  pursued  in  our  efforts 
to  protect  the  revenues  of  the  Government. 

The  postmaster  then  referred  at  length  to  the  joint  investigation 
conducted  in  the  fall  of  1905.  He  stated  that  following  the  inves- 
tigation the  company  discontinued  its  system  of  distinguishing 
wrappers,  "with  every  apparent  effort  on  Mr.  Lewis'  part  to  pre- 
vent the  Department,  if  possible,  from  gathering  further  facts  as 
to  the  exact  number  of  his  illegitimate  mailings."  Deprived  of  this 
key,  the  po.stmaster  had  recourse  to  inquiries  through  postmasters, 
with  the  alleged  result  that  "not  to  exceed  fifty-five  per  cent  of 
Lewis'  subscribers  are  legitimate."  The  postmaster  stated  that 
Lewis'  "alleged"  Citizens'  Committee  lays  claim  to  the  legitimacy 
of  expired  subscriptions  under  the  newly  published  rules  of  the 
Department,  but  asserts  that,  with  this  exception,  its  count  and  that 
made  by  the  inspectors  are  practically  alike.  After  rehearsing 
alleged  discrepancies  in  Lewis  circulation  statement,  he  indulges  in 
the  following:  "In  face  of  these  indisputable  facts,  I  cannot  un- 
derstand why  any  of  his  statements  or  explanations  are  accepted 
as  truthful  or  why  he  should  be  given  the  sufferance  of  second- 
class  privileges  another  day." 

After  directing  sundry  criticisms  at  the  company's  method  of 
securing  circulation,  the  postmaster  states  that  he  has  not  acted 
without  full  realization  of  his  responsibilities,  and  is  "not  insensible 
to  the  criticisms  and  abuse  which,  on  the  part  of  Lewis  and  his 
friends,  has  followed  such  action,  and  will  continue  so  doing." 
He  expresses  the  earnest  hope  that  the  officers  of  the  head  of  the 
bureau  having  jurisdiction  over  these  abuses  and  having  the  power 
to  stop  them,  will  give  him  the  "loyal  and  effective  support"  that  is 
due  a  postmaster  under  such  circumstances.  The  letter  closes 
thus : 

I  desire  to  again  express  it  as  my  conviction  that  not  only  should  the 
additional  postage  collected  from  Mr.  Lewis  be  retained  by  the  Govern- 
ment, but  that  the  second-class  privilege  granted  the  Woman's  Magazine 
and  the  Woman's  Farm  Journal  should  be  immediately  revoked,  because 
of  the  unquestionable  illegitimacy  of  his  subscription  lists,  and  his  gross 
abuse  of  second-class  privileges  in  the  use  of  these  publications  primarily 
for  advertising  purposes. 


690  THE  SIEGE  OF  UNIVERSITY  CITY 

General  Madden  caustically  remarks  tliat  his  reply  to  the  fore- 
going letter  "was  not  submitted  to  the  postmaster-genei-al  before 
transmission."  This  letter  from  the  third  assistant  is  of  sufficient 
interest  to  justify  its  insertion  here  in  its  entirety.     He  says: 

Your  letter  of  April  23,  a  copy  of  which  was  also  sent  to  the  postmaster- 
general  is  received.  This  is  not  a  reply  to  such  parts  of  your  letter  as  are 
responsive  to  my  letter  of  the  19th  instant  calling  for  information.  There 
are  certain  portions  of  your  letter,  however,  not  concerned  with  the  merits 
of  the  matter  to  which  it  relates,  which,  by  reason  of  their  unusual  charac- 
ter, require  special  notice  at  this  time. 

You  should  understand  that  the  second-class  mailing  privilege  of  any 
publication  depends  upon  the  facts  pertaining  to  that  publication  as  mail- 
able matter,  and  the  circumstances,  if  true,  that  a  publisher  has  "vilJified 
and  maligned  every  oflScer  in  any  way  connected  with  the  issuance  of  the 
fraud  order  against  him,  from  the  head  of  the  Department  down,  includ- 
ing the  judge  of  the  United  States  court,  and  has  placed  all  of  them  in 
the  category  of  thieves,  conspirators,  dishonest  officials,  dupes,  or  incom- 
petents," or  the  circumstances  that  the  statements  made  by  him  are  anar- 
chistic, or  that  any  one  official  has  aot  been  the  object  of  his  displeasure,  are 
matters  wholly  disconnected  from  his  right  to  the  second-class  mailing 
privilege,  and  are  matters  which  you  should  not  permit  to  enter  into  the 
consideration  which  you,  as  an  official,  are  required  to  give  the  case.  If  the 
publisher  has  libeled  you  or  any  other  official,  there  is  a  remedy  at  law. 

It  is  especially  important  that  an  official  charged  with  administering  the 
postal  laws  and  regulations  uniformly  should,  in  the  discharge  of  his  func- 
tions, be  entirely  unbiased  by  such  circumstances  as  those  upon  which  you 
dwell  in  your  letter.  Particularly  should  you  endeavor  to  eliminate  from 
your  investigation  and  report  upon  the  physical  facts  involved  in  the  in- 
quiry, the  supposed  effect,  however  appalling  in  your  judgment,  of  these 
statements  upon  the  readers  of  the  publication.  Neither  should  you  take 
into  consideration,  as  an  official,  the  letters  of  vituperative  condemnation 
which  you  say  you  have  received.  While  your  protestation  that  you  intend 
to  continue  to  perform  your  duty  faithfully  and  fearlessly  is  commendable, 
and  you  wiU  have  the  support  of  this  bureau  whenever  your  action  is  just, 
lawful  and  reasonable,  you  should  not,  by  reason  of  the  criticism  and  abuse 
to  which  you  say  you  have  been  subjected,  put  yourself  in  the  frame  of 
mind  of  one  suffering  from  delusions  of  persecution,  nor  sliould  you  per- 
mit the  irritation  which,  as  an  indivioual,  you  may  naturally  feel  on  that 
account,  to  drive  you  to  imperil  the  SQCcess  of  administration  by  over 
zealous  or  hysterical  measures. 

It  is  my  duty  to  inform  you  that  the  cases  of  the  publications  mentioned 
in  your  letter  are  now  with  this  bureau.  They  involve  two  questions:  First, 
whether  the  excess  mailings  alleged  by  you  are,  as  a  matter  of  fact,  excess 
under  the  usual  rules  applicable  to  all  publications;  second,  the  right  of  the 
publications,  as  constituted,  to  the  second-class  mailing  privilege. 

The  facts  with  respect  to  the  fraud  order  against  the  People's  United 
States  Bank  and  the  indictment  of  Mr.  E.  G.  Lewis  in  connection  with 
the  promotion  of  that  bank  and  for  conspiracy  to  defraud  the  postal  rev- 
enues, recited  at  length  in  your  letter,  are  matters  of  which  this  bureau 
has  already  official  cognizance  and  which,  in  the  request  for  information 
concerning  your  ruling  as  to  excess  copies,  you  were  not  called  upon  to 
recount  at  length.  Neither  is  it  your  duty  to  pass  judgment  upon  the 
extent  to  which  the  Government  is  to  be  heard  in  the  appeal  from  your 
ruling,  nor  upon  the  question  whether  its  interests  will  be  adetjuately  rep- 
resented. Equally  superfluous  is  your  statement  that  "no  action,  so  far  as 
this  office  is  advised,  has  been  taken  by  you  in  connection  witli  the  recom- 
mendation and  hearing  on  the  matter  of  revoking  Lewis'  second-class  privi- 
leges."    Whether  action  has  been  taken  by  me  or  not  is  something  which 


8  ?  !e  >^ 


H^      C-       i^       — 


Ills 


>-  s  ^  ir  t: 


2-clS?      ° 

sis  S  i'^" 
5  H^  >-■  c  S 


a  tL,  "-  " 

.    .^  =*  ^  S 

"s  °-2  '*"  2 

-=2  -  -  ^ 


THE  DREYFUS  CASE  OP  AMERICA  593 

I  may  be  assumed  to  know,  and  your  statement  to  that  efPect  in  an  answer 
to  a  letter  calling  upon  you  for  information,  can  be  accounted  for  only 
upon  the  view  that  you  assume  to  sit  in  judgment  upon  the  actions  of  this 
bureau  and  to  express  contempt  for  them.  You  must  know  that  conduct 
of  this  character  will  not  be  tolerated,  and  that  a  repetition  of  it  will 
involve  consequences  more  serious  than  the  rebuke  and  reprimand  which  is 
now  administered  to  you.  This  reprimand  applies  equally  to  other  state- 
ments in  your  letter,  among  them  the  expression  of  your  surprise  that  any 
of  Mr.  Lewis'  statements  or  explanations  are  accepted  as  truthful,  or  that 
he  should  be  given  the  sufferance  of  second-class  privileges  another  day. 
The  law  has  not  delegated  to  you  the  power  or  authority  to  pass  upon  the 
second-class  privileges  of  any  publication,  nor,  so  long  as  you  remain  sub- 
ordinate officer  of  this  Department  are  you  at  liberty  to  review,  or  express 
your  disapproval  of,  the  decisions  of  your  superiors. 

It  is  unnecessary  for  the  present  purpose  to  refer  to  further  evidence 
in  your  letter  of  the  attitude  of  insubordination  in  which  you  place  your- 
self. It  is  hoped  and  expected  that  hereafter,  in  the  management  of  that 
part  of  the  public  business  committed  to  your  care,  you  will  confine  yeur- 
self  to  the  duties  which  you  are  called  upon  to  perform,  and  in  doing  so 
will  display  sanity,  moderation,  and  dignity. 

THE   ONLY  UNCHANGEABLE   SUBSCRIPTION   LIST  IN  HISTORY. 

Neither  the  postmaster  nor  the  chief  inspector  complied  with  the 
third  assistant's  request  for  tlie  evidence  in  their  possession.  He 
therefore  proceeded  according  to  his  own  methods  and  practices. 
Meantime,  notwithstanding  Lewis'  protest  and  the  pendency  of 
his  appeal,  the  postmaster  refused  to  receive  the  current  issue 
of  the  Woman's  Farm  Journal  for  transmittal,  until  the  alleged 
excess  to  the  amount  of  three  thousand  dollars  had  been  deposited. 
For  this   a  receipt,  of  which  the  following  is  a  copy,  was  given: 

Received  of  the  Lewis  Publishing  Company,  subject  to  proper  disposi- 
tion of  same  by  the  Postoffice  Department,  the  sum  of  $3,000,  as  a  deposit 
to  cover  the  mailing  of  such  part  of  the  April,  1906,  issue  of  the  Woman's 
Farm  Journal  as  is  held  to  be  subject  to  the  transient  second-class  rate  of 
postage.  Frank  Wyman,  Postmaster. 

Attached  to  this  receipt,  in  Lewis'  private  vault,  are  similar  ac- 
knowledgments of  excess  postage  on  both  publications,  covering 
the  period  from  April  7,  1906,  to  March  14,  1907,  aggregating  thir- 
ty-two thousand  dollars. 

The  total  of  141,328  subscriptions  to  which  the  second-class  rights 
of  the  Woman's  Farm  Journal  were  thus  limited  by  the  postmas- 
ter's ruling,  was  first  established  by  the  inspectors'  count  of  the 
subscription  cards  as  of  October  1,  1905.  Even  the  current  month's 
expirations  were  excluded.  The  expirations  for  the  months  of  July, 
August  and  September  of  the  preceding  year  were,  however,  being 
carried  at  that  time  as  credit  subscriptions.  This  practice  was 
fully  authorized  by  the  newly  published  departmental  rulings. 
Lewis,  moreover,  had  modified  his  practice  as  to  expirations  after 
the  inspectors'  investigation  in  October,  and  continuously  availed 
himself  thereafter  of  his  privilege  to  carry  expirations  "a  reason- 
able time,"  which  he  chose  to  interpret  as  from  six  months  to  one 
vear.  Accordingly,  six  months  additional  expirations  had  been 
added  to  his  regular  subscription  list  over  and  above  the  141,828 


394  THE  SIEGE  OF  UNIVERSITY  CITY 

allowed  by  the  inspectors,  a  total  of  approximately  one-half  as  many 
additional.  These  subscriptions  the  postmaster  totally  ignored. 
Lewis  on  April  10,  made  this  fact  the  subject  of  the  following  caus- 
tic letter: 

In  view  of  your  letter  of  April  6,  purporting  to  fix  the  number  of  sub- 
scriptions to  the  Woman's  Farm  Journal  at  141,328,  we  beg  to  call  your  at- 
tention to  the  fact  that  we  are  recei\ing  large  numbers  of  new  subscrip- 
tions in  every  dtiy's  mail.  Will  you  have  the  kindness  to  inform  us  what 
the  new  regulations  are  in  regard  to  these  additional  subscriptions,  under 
the  revised  postal  laws  which  you  are  enforcing  on  this  publication?  Is 
the  subscription  list  of  the  Woman's  Farm  Journal  supposed  to  remain 
permanently  at  the  figure  you  have  fixed,  for  all  time  to  come;  are  we  to 
be  entitled  to  mail  these  additional  subscriptions  at  the  regular  pound 
rate;  or  must  we  return  the  money  to  these  subscribers  as  it  comes  in,  and 
declare  to  them  that  our  subscription  list  is  unchangeable  since  you  fixed  it? 
As  we  are  unable  to  find  anything  in  the  postal  laws  and  regulations  which 
throws  light  on  this  problem,  we  ask  your  ruling  on  the  point,  as  it  is  a 
matter  of  importance,  not  only  to  the  Woman's  Farm  Journal,  but  to 
every  newspaper  and  magazine  in  America. 

The  effect  of  this  outburst  was  merely  to  provoke  additional 
reprisal.  On  April  12,  the  postmaster  ruled  that  "the  legitimate 
subscriptions  to  the  Woman's  Magazine  are  not  to  exceed  539,901," 
being  the  figure  established  b}'^  the  inspectors'  October  count,  and 
the  mailings  of  that  publication  were  therefore  limited  to  1,079,802 
copies.  Instructions  were  given  that  the  "regular  legitimate  sub- 
scriptions" should  be  first  presented  for  mailing,  then  the  sample 
copies,  and  afterwards  any  excess  copies  must  be  presented  sepa- 
rately, with  postage  fully  prepaid.  Accompanying  this  communi- 
cation was  the  postmaster's  reply  to  Lewis'  inquiry  touching  possi- 
ble additions  to  his  subscription  lists.  The  postmaster,  in  this  letter, 
takes  advantage  of  verbal  notice  given  him  by  Lewis  of  the  pro- 
posed appeal  from  his  decision  to  the  Department,  and  invites  him 
to  submit  in  the  regular  way,  through  the  St.  Louis  postoffice,  all 
evidence  bearing  on  the  subject.  Lewis  was  advised  that  his  claims 
■would  be  fully  investigated,  but  that  he  must  convince  the  St.  Louis 
office  or  the  Department,  by  evidence,  of  their  validity.  The  fol- 
lowing paragraph  in  this  letter  is  of  interest: 

In  passing  upon  any  proposed  change,  however,  you  are  advised  that 
the  net  increase  or  the  net  decrease  must  be  the  basis  thereof.  All  addi- 
tional legitimate  subscriptions  received  by  you  will,  of  course,  be  given  due 
consideration.  On  the  other  hand,  expirations  and  names  illegitimately  used 
by  you  as  subscribers  will  likewise  be  considered  and  deducted. 

Additional  interest  attaches  to  this  letter  because,  in  closing,  the 
postmaster  quotes  from  the  newly  published  rules  of  the  Depart- 
ment (Circular  XXV),  and  for  the  first  time  serves  upon  Lewis 
formal  notice  of  tlie  construction  of  the  Postal  Laws  and  Regula- 
tions, compliance  with  which  would  be  expected.  No  mention  is 
made,  however,  of  the  clause  above  quoted  from  the  supervisors' 
report  of  the  Citizens'  Committee,  allowing  publishers  to  carry 
expirations  for  a  reasonable  time.  This  clause,  however,  had  already 
attracted  the  attention  of   the   St.   Louis   Triumvirate,  as  will  be 


THE  DREYFUS  CASE  OF  AMERICA  595 

seen  later  from  an  examination  of  their  reports.  Lewis  coun- 
tered heavily  upon  the  postmaster.  His  reply,  after  calling  atten- 
tion to  the  fact  that  expirations  carried  for  a  "reasonable  time"  are 
classified  by  the  Postoffice  Department  as  legitimate  subscribers, 
concludes  sarcasticalW : 

If  you  have  recently  made  a  new  set  of  rulings  to  supersede  those 
made  and  promulgated  by  the  third  assistant  postmaster-general  on  Decem- 
ber 17,  will  you  kindly  send  us  a  copy  in  order  that  we  may  be  guided  bj 
them  and  furnish  them  to  all  other  publications. 

THE    SECOND    HEARING   BEFORE    MADDEN. 

The  St.  Louis  Globe-Democrat  of  April  24  and  26  contained 
brief  items  to  the  effect  that  the  Lewis  case  was  to  be  reconsidered 
and  that  an  open  hearing  was  to  be  had  the  following  Monday  in 
Vr  Washington.  Upon  the  telegraphic  request  of  the  company,  the 
■  date  was  postponed  until  2:30  p.  m.,  April  30.  Lewis  left  for 
Wasliington  at  noon,  April  28,  accompanied  by  a  party  consisting 
of  Governor  and  Mrs.  Stephens,  Judge  Barclay,  counsel  for  the 
company;  Mrs.  Barclay,  H.  L.  Kramer,  vice-president,  and  James 
F.    Coyle,   director. 

A  full  stenographic  report  of  the  proceedings  at  this  hearing 
is  of  record.  What  took  place  is  of  basic  importance,  because  Cor- 
telyou  asserted  afterwards  that  this  was  the  hearing  prescribed  by 
law  on  which,  ten  months  later,  he  withdrew  the  second-class  privi- 
lege from  both  publications.  The  courts  afterwards  decided  that 
Cortelyou,  in  fact,  was  wrong  and  that  no  legal  hearing  had  been 
accorded.  Both  publications,  however,  when  the  decision  was 
rendered,  had  been  excluded  for  nine  months  from  the  mails  and 
the  work  of  their  destruction  was  virtually  complete.  In  this  con- 
nection, the  following  excerpt  from  the  record  of  the  hearing  is 
reproduced : 

Judge  Barclay:  There  is  one  thing,  General  Madden,  which  I  wish 
to  ask  particularly.  That  is  the  second  paragraph  of  your  honored  com- 
munication of  April  19,  in  which  you  state,  in  addition  to  the  question  of 
circulation,  "In  this  connection  you  are  also  informed  that  the  question  of 
the  right  of  these  publications  to  second-class  entry  is  in  dispute."  If  this 
matter  is  to  be  heard  independent  of  the  question  of  the  circulation,  we 
should  like  to  understand  it,  as  it  would  involve  a  very  much  larger  inquiry. 

Gexerat.  Madden  :    It  is  independent  and  unnecessary,  today. 

Judge  Barclay:    We  can    only  take  the  appeal,  today? 

General  Madden:    Yes. 

Mr.  Lewis:  I  understand  that  the  bearing  today  is  separate  from  the 
last  clause  of  your  letter — that  is,  it  is  not  upon  the  general  character  of 
the  publications  or  their  being  entitled  to  second-class  privileges;  it  is 
purely  and  simply  upon  the  excess  mailings. 

Judge  Barclay:  Are  we  to  have  the  privilege  of  knowing  upon  what 
facts  there  is  a  prima  facie  case?  Mr.  Wyman's  figures  or  anyone  else's, 
regarding  the  circulation? 

General  Madden:  No,  sir.  I  am  going  to  hear  what  you  have  to  say  to 
establish  your  own  figures. 

Judge  Barclay:     Independent  of  that? 

General  Madden:     Independent  of  that  point. 

This  would  seem  to  be  in  direct  conflict  with  Cortelyou's  conten- 


596  THE  SIEGE  OF  UXIVERSITY  CITY 

tion  that  this  was  such  a  hearing  as  is  prescribed  in  the  Act  of 
Congress  of  Marcli  3,  1901.* 

The  hearing  before  the  third  assistant  was  opened  by  the  follow- 
ing remarks  from  Congressman  Bartholdt,  who  has  attained  world- 
wide celebrit}'  by  his  services  in  the  cause  of  international  peace: 

General  Madden,  before  the  hearing  begins,  I  should  like  to  state  that 
the  plant  of  the  Lewis  Publishing  Company  is  located  in  my  district.  That 
accounts  for  my  presence  heRe  today.  The  arguments  will  be  submitted  by 
the  other  gentlemen.  All  I  have  to  say,  and  the  reason  I  came  here,  is 
thai  I  desire  to  testify  to  the  character  of  the  gentlemen  who  appear  before 
you.  They  are  men  of  the  highest  standing  in  St.  Louis,  whose  word  would 
be  believed  under  any  circumstances,  in  any  business  transaction,  or  in  any 
other  respect.  They  will,  I  suppose,  be  able  to  satisfy  you.  From  the 
knowledge  I  have  gained  from  personal  study  of  the  subject,  if  the  methods 
which  have  been  pursued  to  establish  the  circulation  of  the  Woman's  Maga- 
zine, and  the  otiier  publications,  should  be  pursued  to  establish  the  circula- 
tion of  a  daily  newspaper,  it  would  pretty  nearly  break  up  any  first-class 
newspaper  in  the  country.     That  is  all  I  have  to  say. 

Counsel  for  the  company  thereupon  read  into  the  record  its  for- 
mal protest  and  appeal.  The  issue  was  partially  defined  and 
Lewis  took  the  floor.  After  stating  that  his  understanding  of  the 
purpose  of  Congi-ess  in  enacting  the  law  governing  the  carriage 
of  second-class  n^il  was  to  encourage  "the  distribution  of  good, 
clean  literature  and  information  to  the  great  mass  of  the  Ameri- 
can people  at  the  lowest  possible  price,"  Lewis  discussed  briefly  the 
administration  of  the  law.  He  then  reviewed  the  whole  controversy. 
After  stating  at  length  his  grievances  and  contentions,  he  introduced 
Walter  B.  Stevens,  who  made  the  following  statement: 

Mr.  Stevens:  This  is  somewhat  personal,  and  I  don't  like  to  introduce 
it^  but  it  may  have  some  bearing  and  may  heli^  to  emphasize  what  I  have 
to  say.  For  a  period  of  seventeen  years,  I  served  the  St.  Louis  Globe- 
Democrat  as  its  Washington  correspondent.  I  have  been  to  some  extent 
familiar  with  the  Postoffice  Department  policies  and  rulings.  When  Mr. 
Loud  of  California,  was  on  the  postofBce  committee  of  the  House  of  Repre- 
sentatives, efforts  were  being  made  to  remedy  abuses  of  second-class  privi- 
leges. I  was  then  instructed  by  the  Globe-Democrat  to  give  the  subject  spe- 
cial attention,  and  did  so.  Mr.  Loud  and  officials  of  this  Department  gave 
me  the  use  of  information  which  had  been  gathered,  and,  so  far  as  I  had 
the  aWlity,  I  pointed  out  the  legitimate  use  and  abuse  of  the  privilege.  I 
sought  to  create  all  the  reform  sentiment  I  could.  Such  opinions  as  I  then 
formed  were  decidedly  against  the  misuse  of  the  second-class  privilegA. 
When  this  investigation  was  undertaken,  the  committee  of  citizens  of  St. 
Louis  was  told  plainly  that  no  ex  parte  report  could  be  made.  The  chair- 
man replied  that  the  committee  would  be  satisfied  with  nothing  but  the 
facts.  In  a  determination  to  show  the  Lewis  Publishing  Company  no  favor 
and  to  establish  the  truth,  this  investigation  was  made. 

Mr.  Bartiioldt:  Will  you  permit  me  to  add  just  a  word?  Mr.  Stevens 
was  formerly  the  president  of  the  Gridiron  Club,  and  enjoys  the  confidence 
of  every  public  man  with  whom  he  ever  came  in  contact. 


*This  statute  is  quoted  as  section  444  of  the  Postal  Laws  and  Regulations,  as 
follows:  "When  any  publication  has  been  accorded  second-class  mail  privileges,  the 
same  shall  not  be  suspended  or  annulled  until  a  hearing  shall  have  been  granted  to 
the  parties  interested." 


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THE  DREYFUS  CASE  OF  AMERICA  599 

After  submitting  a  statement,  which  gave  the  substance  of  the 
report  of  the  Citizens'  Committee,  Mr.  Stevenis  described  the 
whole  method  of  manufacture  and  mailing  of  the  Lewis  publica- 
tions.    He  thus  concluded: 

The  examination  of  the  original  subscriptions  justified  some  conclusions. 
During  the  year  1905, — I  think  this  is  quite  an  important  statement — the 
single  paid-in-advance  subscriptions  to  the  magazine  numbered  335,364. 
The  other  subscriptions  were  in  club  lists.  Those  single  subscribers  either 
wrote  letters  or  filled  out  blanks  and  inclosed  money  or  postage  stamps. 
The  correspondence  was  voluminous.  It  bore  evidence  to  an  active  interest 
in  this  publication,  by  a  large  number  of  women  and  girls  living  on 
farms,  in  villages  and  small  towns.  The  reading  of  a  few  thousand  of  these 
letters  will  satisfy  any  fair-minded  person  that  the  Woman's  Magazine  and 
Farm  Journal  have  legitimate  fields  and  appreciative  readers.  These  are 
not  publications  that  appeal  particularly  to  masculine  constituencies.  They 
do  reach  the  feminine  mind,  and  that  is  one  secret  of  the  success  of  Mr, 
Lewis  in  building  up  these  two  publications.  It  has  been  amazing  that 
this  man  has  made  such  a  success.  He  has  a  way  of  making  the  publica- 
tion appeal  to  women,  especially  women  living  in  the  country.  There  are 
not  many  publishers  who  have  preeminently  this  faculty  or  understanding 
that  enables  them  to  cater  to  women  readers.    Mr.  Lewis  is  one  of  them. 

Commenting  on  the  question  as  to  whether  the  subscription  price 
of  the  Woman's  Magazine  could  be  deemed  nominal  within  the 
meaning  of  the  law,  Mr.  Stevens  said: 

The  first  impression  of  a  ten-cent  subscription  is  that  it  is  merely  nomi- 
nal, almost  ridiculously  small.  The  fact  is,  the  two-thirds  of  a  cent  which 
the  publishing  company  averages  on  each  number,  from  subscriptions, 
goes  much  farther  toward  paying  for  the  material  and  mechanical  cost  of 
the  product  than  those,  not  intimately  familar  with  the  publishing  business 
today,  are  aware.  When  I  began  work  on  a  St.  Louis  paper,  not  one  of 
the  dailies  in  the  city  was  sold  at  less  than  five  cents  a  copy.  The  mail 
rate  per  annum  was  from  ten  to  twelve  dollars.  When  the  first  daily  was 
started  at  one  cent,  it  was  nccessarv  to  ship  pennies  by  the  barrel  from  the 
Treasury  Department  to  St.  Louis,  to  make  change.  Today,  every  daily 
paper  in  St.  Louis  is  retailed  six  days  in  the  week  at  one  cent  a  copy. 
The  newsdealers  and  newsboys  buy  these  papers  at  from  one-half  to  five- 
eighths  of  a  cent  per  copy.  I  do  not  know  what  the  Lewis  Publishing  Com- 
jtany  pays  for  white  paper,  for  composition,  and  for  press  work.  But, 
from  general  knowledge  on  these  matters,  I  do  not  think  there  is  very  much 
difference  between  the  material  and  mechanical  cost  per  copy  of  one  issue 
ot  a  St.  Louis  morning  newspaper  and  one  issue  of  the  Woman's  Magazine. 
That  is,  a  copy  of  the"  St.  Louis  Globe-Democrat  or  the  St.  Louis  Republic 
costs,  for  paper,  press  work,  and  composition,  about  the  same  as  one  copy 
of  one  issue  of  the  magazine. 

The  economies  that  have  been  introduced  in  the  publishing  business  have 
revolutionized  it.  In  no  other  large  printing  estabhshment  that  I  know  of, 
have  these  economies  been  carried  to  the  point  of  saving  that  they  have 
in  the  plant  of  the  Lewis  Publishing  Company.  Girls  do  most  of  the  work 
in  the  subscription  and  rnaihng  departments.  Lads  learning  the  trade, 
with  here  and  there  an  experienced  man,  handle  the  material  and  the 
presses.  Labor-saving  machinery  has  been  introduced  in  all  branches  of 
the  business.  It  is  doubtful  if  anywhere  else  in  the  United  States  there 
is  a  printing  establishment  which  does  work  at  such  minimum  cost.  In 
St.  Louis,  we  have  come  to  look  upon  the  publishing  plant  of  the  Lewis 
Company  as  a  modeh  and  to  take  pride  in  it  as  a  local  institution.  We 
realize  that  the  publication  of  a  monthly  magazine  at  a  subscription  price 
of  ten  cents  a  year  is  not  a  joke,  nor  a  fake.     The  recognition  of  the 


600  THE  SIEGE  OF  UNIVERSITY  CITY 

character  of  these  publications  was  shown  in  the  consent  of  the  members 
of  the  committee  to  investigate  its  subscriptions. 

The  remainder  of  the  hearing  consisted  chiefly  in  the  examina- 
tion of  Lewis  by  Madden  and  his  assistant,  Glassie,  special  counsel 
for  the  Government.  The  minutiae  of  the  company's  methods  of 
handling  expirations  and  sample  copies  was  probed  exhaustively. 
Lewis  made  specific  replies  to  all  questions.  He  told  all  about 
the  defense  fund,  the  method  of  procuring  names  from  mail  order 
advertisers,  the  use  of  distinguishing  wrappers,  and  the  various 
other  controversial  points  with  which  the   reader  is   familiar. 

After  an  expression  of  confidence  in  the  third  assistant  by  Vice- 
President  Kramer,  and  an  appeal  by  him  in  behalf  of  the  stock- 
holders for  a  prompt  decision,  the  hearing  came  to  an  end.  A 
large  number  of  exhibits,  including  the  detailed  tabulation  of  the 
Business  Men's  Committee,  with  copies  of  their  report,  and  that 
of  the  American  Advertisers'  Association,  were  submitted  to  the 
third  assistant. 

AN    INTERVIEAV    WITH    CORTELYOU. 

The  day  following,  between  the  hours  of  four  and  six  p.  m., 
through  the  courtesy  of  Congressman  Bartholdt,  the  representa- 
tives of  the  company  were  given  a  personal  hearing  by  General 
Cortelvou.  Judge  Barclay  made  the  first  formal  remarks.  He 
then  introduced  Mr.  Stevens,  who  called  the  attention  of  the  post- 
master-general to  the  tabulation  and  report  of  the  Business  Men's 
Committee.  Following  is  Lewis'  statement  as  to  what  transpired 
in  the  course  of  this  interview: 

We  called  on  Mr.  Corteljou  and  had  a  personal  interview  with  him. 
Walter  B.  Stevens  presented  the  tabulated  analysis  of  the  count  of  the 
Business  Men's  Committee,  This  was  an  analysis  of  the  original  subscrip- 
tions orders.  It  showed  exactly  what  the  subscriptions  to  these  magazines 
were.  Mr.  Cortelyou  asked  a  number  of  questions  of  Mr.  Stevens  with 
whom,  I  believe,  he  was  acquainted.  To  the  best  of  my  recollection  he 
said  that  a  special  commission  would  be  sent  out  from  Washington  to 
make  an  independent  and  exhaustive  investigation,  and  that  if  the  result 
.sustained  and  verified  the  count  of  the  Business  Men's  Committee,  it  would 
end  the  whole  controversy. 

Lewis  and  his  associates,  knowing  that  in  the  nature  of  things 
the  report  of  the  Citizens'  Committee  was  bound  to  be  confirmed 
by  a  fair  investigation,  believed  that  their  troubles  were  practically 
at  an  end.  Reassured  by  the  nature  of  the  hearing,  and  the  appar- 
ent attitude  of  the  postmaster-general,  they  returned  to  St.  Louis, 
and  with  renewed  confidence  devoted  themslves  to  the  task  of  estab- 
lishing the  Woman's  National  Daily  and  earning  dividends  upon 
the  largely  increased  capitalization  of  the  company. 


CHAPTER  XXV. 

CORTELYOU  SHOWS  HIS  HAND. 

The    Riddle    of   the    Sphinx-Like    Cortelyou — The    Penrose- 

OVERSTREET    COMMISSION ThE    FeTTIS    COMMISSION    AT    St. 

Louis — Cortelyou  Shows  His  Hand — The  Postmaster's 
Mode  of  Defense — Report  of  the  Fettis  Count — Mad- 
den's  Decision — The  "Proper  Officer"  is  Reversed — The 
Last  Two  Days  and  Nights — Lewis'  Gatling-gun — Rep- 
resentatives AT  Washington — Lewis  Gets  a  Birthday 
Gift, 

The  centre  of  interest  now  shifts  to  Washington.  We  here  ap- 
proach the  source  of  the  mj^stery  in  which  the  attacks  on  the 
People's  Bank  and  the  Woman's  Magazine  were  shrouded'.  Affable, 
courteous,  fair  spoken,  the  postmaster-general  all  along  had  main- 
tained, to  outward  seeming,  an  attitude  of  aloofness  from  the 
Lewis  case.  He  protested  an  entire  freedom  from  prejudice  or 
bias  and  disclaimed  any  personal  interest  in  the  relations  of  the 
Lewis  Publishing  Company  with  the  Department.  He  laid  great 
emphasis  upon  his  expressed  policy  to  treat  the  Lewis  case  with 
absolute  fairness  and  upon  precisely  the  same  terms  as  those 
accorded  other  publishers.  He  received  the  representatives  of  the 
People's  Bank,  after  tlie  hearing  before  Goodwin  in  1905,  with  ap- 
parent candor  and  gave  them  assurances  of  further  hearing  before 
himself.  Of  these,  however,  he  was  afterwards  unmindful.  In 
like  manner,  after  the  hearing  before  Madden  in  1906,  he  re- 
ceived the  representatives  of  the  Lewis  Publishing  Company.  Again 
he  was  ready  with  assurances.  A  special  commission  would  be  ap- 
pointed, he  said,  to  investigate  the  claims  of  the  company.  If  the 
finding  of  the  Citizens'  Committee  were  confirmed  by  this  com- 
mission, the  company's  appeal  would  be  sustained.  By  these  tac- 
tics the  postmaster-general  once  more  won  the  entire  confidence 
of  Lewis  and  his  associates.  Again  they  left  his  presence  glad- 
dened by  the  belief  that  in  the  highest  quarters  of  the  Depart- 
ment, in  the  last  analysis,  justice,  long  sought  and  long  denied 
them,  could  be  obtained. 

the  riddle  of  the  sphinx-like  cortelyou. 
Conspiracy  is  among  all  crimes  the  most  difficult  to  establish  by 
legal  evidence.  Its  very  essence  is  the  act  of  two  or  more  per- 
sons uniting  to  commit  an  overt  wrong.  This  crime  most  often 
develops  by  means  of  a  series  of  secret  conclaves  among  the  arch- 
conspirators  or  the  word  of  mouth  fetchings  and  carryings  of  a  go- 

601 


602  THE  SIEGE  OF  UNIVERSITY  CITY 

between.  The  consciousness  of  -vvrongdoinjij  most  often  seals  the 
lips  of  the  conspirators.  It  almost  invariably  precludes  them  from 
putting  Kpon  paper  any  incriminating  evidence  of  their  intent. 
A  very  celebrated  case  has  recently  given  much  prominence  to 
the  possibilities  of  the  modern  invention  known  as  the  dictagraph 
in  the  detection  of  this  class  of  crimes.  One  of  these  devices, 
secretly  concealed  in  an  apartment,  has  power  to  transmit  to  listen- 
ing ears  (by  means  of  wires  similar  to  those  employed  in  the  tele- 
phone), every  word  and  intonation  of  any  conversation  which 
takes  place  within  its  range.  What  confidential  councils,  what 
revelations  of  intent  and  motive,  w^hat  pledges  of  mutual  loyalty  may 
have  been  exchanged  in  the  office  of  the  postmaster-general  at 
Washington  upon  occasion  of  the  frequent  visits  of  Inspector-in- 
Charge  Fulton  and  the  postmaster  from  St.  Louis,  are  still  mat' 
ters  of  conjecture.  One  may  fancy  that  the  record  of  a  dictagraph 
at  Cortelyou's  elbow  during  the  many  conferences  which  he  ac- 
knowledges having  had  with  Assistant  Attorney-General  Goodwin, 
Fulton  and  otiier  aids,  touching  the  Lewis  case,  might  prove  more 
illuminating  than  the  testimony  of  the  same  officials  under  the 
congressional  prolie.  However  this  may  be,  the  mj^stery  which 
concealed  from  Lewis  and  his  associates  what  took  place  behind 
the  official  screen  at  Washington  has,  in  part,  been  cleared  away. 
The  attitude  and  relation  of  the  third  assistant  postmaster-general 
toward  the  Lewis  case,  and  the  resulting  controversy  between 
him  and  his  chief,  have  been  disclosed.  We  are  now  to  endeavor 
to  read  the  riddle  of  the  sphinx-like  Cortelyou.  At  least  we  shall 
see  how,  when,  and  under  what  circumstances  the  postmaster- 
general  was  compelled  to  show  his  hand. 

General  ]\Iadden  makes  the  following  statement,  in  substance, 
touching  the  appointment  of  the  Fettis  Commission: 

At  the  hearing,  Lewis  was  unable  to  present  any  satisfactory  evidence 
to  enable  me  to  determine  the  question  at  issue.  This  question  was  an 
entirely  numerical  one,  namely,  how  many  subscribers  there  were  of  each 
magazine,  of  issues  in  dispute;  and  the  number  of  copies  of  those  issues 
mailed.  If  the  number  of  subscribers  was  equal  to  one-half  the  copies 
mailed,  there  was,  under  the  rule  applied,  no  excess.  The  evidence  in  the 
case  weighed  tons.  I  therefore  asked  Lewis  if  he  was  willing  to  have  us 
send  a  cnmmission  to  make  a  count  of  the  original  orders.  He  agreed  to 
that.  The  Commission  was  appointed  and  directed  on  my  own  initiative, 
but  on  an  understanding  with  the  postmaster-general.  I  submitted  to  him 
mr    instructions    to    the    commission. 

There  were  five  persons,  four  of  whom  were  special  agents,  authorized 
by  law  for  the  classification  division  of  the  third  assistant's  bureau.  They 
■were  experts.  They  had  instructions  to  coimt  only  the  written  subscrip- 
tion orders  of  the  subscribers  themselves.  That  would  determine  whether 
or  not  there  was  a  legitimate  list  of  subscribers  for  each  magazine.  Upon 
the  findings  of  the  Commission  depended  whether  action  should  be  taken 
as  recommended  on  the  broader  question  of  the  rights  of  the  magazines 
in  the  seeond-class  mails. 

This  Commission  required  the  assistance  of  sixty  clerks  from  the  St. 
Louis  postoffice.  The  postmaster  at  first  refused  to  detail  any  clerks  to 
assist,  out  I  appealed  to  the  first  assistant,  and  the  clerks  were  supplied. 


THE  DREYFUS  CASE  OF  AMERICA  603 

The  Commission  occupied  three  and  a  half  months  in  making  the  count, 
and  the  publication  of  its  report  was  deferred  for  several  months  more. 
The  report  was  finally  suljmitted  to  me  under  date  of  January  3,  eight 
months,  to  a  day,  after  the  date  of  my  letter  of  instructions. 

TPIE    PENROSE-OVERSTREET    COMMISSION. 

A  better  understanding  will  be  gained  by  looking  ahead  at  this 
point  to  learn  why  the  report  of  the  Fettis  Commission  was  not 
submitted  earlier.  General  Madden  appears  to  have  reached  the 
conclusion  that  the  reforms  of  the  second  class,  upon  which  he  had 
set  his  heart,  could  not  be  carried  to  a  successful  issue  on  the  basis 
of  existing  law,  because  of  the  interference  of  the  postmaster- 
general.  The  existing  postal  legislation  was  sadly  in  need  of  re- 
vision. It  was  (and  still  is)  antiquated,  inadequate,  and  so  loosely 
phrased  as  to  leave  altogether  too  much  latitude  for  administrative 
construction  and  discretion.  Previous  postmasters-general  had  al- 
lowed the  third  assistant  freedom  to  work  out  the  necessary  re- 
forms by  a  system  of  office  regulations  and  devices  of  construction. 
Publishers  who  felt  themselves  aggrieved  had  taken  several  of  these 
rulings  into  court.  Almost  without  exception,  the  third  assistant 
had  been  sustained.  There  had  thus  been  established  a  system 
of  legal  precedents  which  in  time  would,  perhaps,  have  remedied 
the  deficiencies  of  the  law.  The  intermeddling  of  Cortelyou, 
however,  and  his  apparent  lack  of  confidence  in  the  third  assistant, 
seem  to  have  forced  General  Madden  to  conclude  that  some  other 
course  must  be  adopted. 

The  third  assistant,  finding  that  uniform  and  impartial  adminis- 
tration was  hampered,  appealed  to  the  postmaster-general  to  recom- 
mend that  Congress  appoint  a  commission  to  consider  the  whole 
subject  of  second-class  mail  matter,  and  enact  a  new  and  compre- 
hensive law.  He  further  recommended  that  the  work  of  reform 
be  suspended  until  this  commission  had  reported  and  Congress  had 
acted.     The  postmaster-general  acquiesced. 

The  third  assistant  then  prepared  for  the  postmaster-general's 
signature  a  communication  for  the  committees  in  the  House  and 
Senate.  Congress  responded.  Three  senators  and  three  members 
of  the  House  M^ere  appointed.  The  postmaster-general  then  com- 
missioned the  third  assistant,  under  date  of  July  14,  1906,  to  repre- 
sent the  Department  before  the  commission.  This  was  the  Penrose- 
Overstreet  Commission.  It  sat  during  the  entire  summer  of  1906, 
at  the  Holland  House,  New  York,  and  presented  to  Congress,  at 
the  close  of  its  labors,  an  exhaustive  report  covering  the  whole 
subject  of  postal  legislation.  It  also  submitted  a  bill  embodying 
a  project  to  amend  and  codify  all  existing  postal  legislation  by 
means  of  a  single  act.  This  measure  was  not  adopted  by  Congress, 
but  the  report  of  the  commission  and  the  bill  which  it  proposed 
stand  as  the  most  important  landmarks  in  the  progress  of  postal 
legislation.  The  reader  will  recall  our  quotations  in  a  previous 
chapter  from  the  findings  and  recommendations  of  this  commission. 


604  THE  SIEGE  OF  UNIVERSITY  CITY 

Tlie  secretary  of  the  Penrose-Overstreet  Commission  was  Henry 
Classic,  special  counsel  appointed  by  Congress  for  the  bureau  of 
the  third  assistant.  He  was  selected  on  the  recommendation  of 
tliat  official.  By  instruction  of  the  postmaster-general,  Madden 
also  placed  himself  wholly  at  the  disposal  of  the  Commission.  His 
time  during  the  summer  and  fall  of  1906  was  occupied  almost  wholly 
by  those  duties.  The  Commission,  in  its  report,  expresses  its  warm 
appreciation  both  of  his  assistance  and  of  his  capacity  as  an  execu- 
tive and  administrator  of  the  postal  law.  The  whole  course  of  Mad- 
dcn's  reform  and  especially  the  appointment  and  report  of  this 
Commission  (which  results  were  well  known  to  be  due  to  his  initia- 
tive and  capacity),  reflected  exceptional  credit  upon  his  adminis- 
tration. The  summer  and  fall  of  1906,  therefore,  found  him  en- 
joying unusual  influence  with  Congress.  He  apparently  was  high 
in  the  councils  of  the  Administration.  Except  for  the  Lewis  case, 
there  is  every  reason  to  suppose  that  he  would  have  been  retained 
in  office,  and  that  the  doors  of  the  Cabinet  ere  long  might  have 
been  opened  to  him. 

THE  FETTIS  COMMISSION  AT  ST.  LOUIS. 

Madden  was  keenly  alive  to  the  fact  that  his  handling  of  the 
Lewis  investigation  had  not  met  the  approval  of  the  postmaster- 
general,  and  that  it  might  jDrove  a  stumbling  block  in  his  career. 
The  whole  atmosphere  of  the  Postoffice  Department  was  by  this 
time  charged  with  intense  hostility  to  Lewis  and  his  enterprises. 
Common  rumor  in  departmental  circles  was  that  Lewis  was  to  be 
"put  out  of  business."  His  publications  were  to  be  silenced.  He 
himself  was  to  be  convicted  and  imprisoned.  The  honor  of  the 
Department  was  thought  to  be  at  stake  unless  it  could  make  good 
the  charges  its  spies  had  brought  against  him.  A  man  of  less 
firmness  and  moral  integrity  than  Madden  would  have  bent  to 
the  storm  and  conformed  to  the  manifest  wishes  of  his  superior. 
Madden  merely  sought  to  be  excused  from  handling  the  Lewis 
case.  In  this,  unluckily  for  himself,  he  was  unsuccessful.  In  this 
connection,  he  says: 

After  the  appointment  of  this  congressional  commission  and  of  the  third 
assistant  to  represent  the  Department  before  it,  I  made  those  circumstances 
an  excuse  to  apply  to  the  postmaster-general  to  take  the  case  of  the  Lewis 
Puhlishing  Company,  which  he  had  sent  to  me  April  14,  out  of  my  hands. 
Although  the  reform  work  was  now  suspended  as  to  all  others,  I  was 
morally  certain  there  would  be  no  abatement  of  the  compaign  against  the 
Lewis  Company.  The  postmaster-general  refused.  He  said:  "You  must 
act  in  that  case." 

As  the  first  duty  of  the  third  assistant  must  now  be  to  the  congressional 
commission,  and  it  woukl  take  months  of  his  time,  it  was  deemed  unfair 
to  require  the  company  to  continue,  indefinitely,  to  deposit  cash  in  trust 
with  the  postmaster  to  cover  the  ]iostage  on  alleged  excess  mailings.  *  *  ♦ 
By  this  time,  souietiiing  less  than  thirty  thousand  dollars  had  been  de- 
posited. It  was  now  arranged,  because  of  tlie  time  which  would  elapse  be- 
fore there  could  be  a  decision  on  the  appeal,  the  company  might  file  a 
bond  with  the  postmaster  to  cover  the  alleged  excesses  for  the  probable 


THE  DREYFUS  CASE  OF  AMERICA  605 

mailings  of  the  magazines  before  a  decision  could  be  expected.     A  fifty- 
thousand  dollar  bond  was  accepted. 

The  third  assistant  did  not  finish  his  work  with  the  congressional  com- 
mission until  late  in  December,  1906.  The  commission  did  not  report  to 
Congress  until  some  time  later.  The  postoffice  commission,  to  count  the 
subscriptions  in  St.  Louis,  did  not  render  its  report  until  January,  1907. 

The  appearance  of  the  Fettis  Commission  at  St.  Louis  was  the 
signal  for  renewed  activities  on  the  part  of  the  Triumvirate.  The 
postmaster  and  the  inspectors,  prior  to  the  hearing,  had  refused 
to  submit  the  evidence  in  their  possession  to  the  third  assistant 
at  Washington.  Now,  however,  they  insisted  upon  submitting 
to  the  Fettis  Commission  such  part  of  it  as  they  thought  would 
not  prejudice  the  criminal  case.  They  were  told  that  the  in- 
structions of  the  commission  did  not  admit  of  their  considering 
any  evidence  not  previously  submitted  at  Washington.  The  Com- 
mission avowed  its  purpose  to  confirm  or  disprove  the  count  of  the 
Citizens'  Committee,  since  this  had  been  advanced  by  Lewis  as  the 
basis  of  his  appeal.  The  postmaster  and  the  inspectors  protested 
vigorously  against  this  proceeding.  They  took  the  ground  that 
the  count  of  the  subscription  cards  by  the  inspectors  in  October, 
1905,  ought  to  have  been  taken  as  the  basis  of  the  investigation. 
The  postmaster  even  went  so  far  as  to  refuse,  until  overruled  by 
tlie  Department,  to  furnish  the  clerks  requisitioned  from  the  St. 
Louis  postoffice  for  the  purpose  of  this  count.  He  then  pro- 
tested that  the  written  instructions  of  the  third  assistant  to  the 
Fettis  Commission  were  in  many  respects  inadequate.  His  con- 
tentions were  sustained  by  the  postmaster-general.  Supplemen- 
tary instructions  were  issued  to  the  Commission  in  conformity  with 
his  request. 

CORTELYOU  SHOWS  HIS  HAND. 

To  make  assurance  doubly  sure,  the  postmaster  and  the  inspec- 
tors now  desired  the  privilege  of  conducting  an  independent  and 
secret  investigation  under  cover  of  the  Fettis  Commission,  and 
without  Lewis'  knowledge  or  consent.  Tliis  they  first  sought  to 
provide  by  arrangement  with  IMr.  Fettis,  the  chairman.  Failing  in 
this,  they  appealed  to  the  postmaster-general.  Cortelyou  was  thus 
finally  compelled  to  show  his  hand.  Lewis,  before  the  Ashbrook 
Committee,  made  the   following  statement: 

The  Fettis  Commission  had  been  at  work  but  a  short  time  when  we 
noticed  several  men  who  were  not  working  with  the  rest,  but  off  to  one 
side.  Mv  attention  was  first  called  to  them  by  Mr.  Walter  B.  Stevens. 
This  was'  a  joint  investigation,  and  it  had  been  distinctly  agreed  that  it 
should  be  open  and  thaf  we  should  be  fully  cognizant  of  everything  that 
was  done.  We  had  nothing  to  conceal.  But  there  were  indictments  hang- 
ing over  us,  and  the  presence  of  two  or  more  men  there  whose  mission  we 
were  unable  to  learn  did  not  seem  right.  They  were  going  into  our  papers 
and  books  at  random. 

I  inquired  of  INIr.  Fettis  at  once  what  it  meant.  He  said  he  did  not 
know,  but  if  I  would  inquire  from  the  postmaster,  Mr.  Wyman,  I  probably 
would  find  out.  I  called  up  Mr.  WjTuan  and  asked  him.  He  told  me  it 
was  none  of  my  business.    I  said  I  thought  it  was  a  good  deal  of  my  busi- 


606  TPIE  SIEGE  OF  UNIVERSITY  CITY 

ness,  and  I  should  certainly  moke  it  so  under  the  circumstances.  A  day 
cr  two  after  that  the  nunit)er  of  men  increased.  I  entered  a  vigorous  pro- 
test to  Mr.  ?>ttis,  and  another  to  Washington,  charging  bad  faith,  and 
asking  what  these  men  were  doing.  I>ater  Fettis  came  down  to  the  office 
and  stated  that  the  men  were  part  of  his  Commission  and  were  working 
under  him.  Our  representative  said  that  this  seemed  to  be  the  case  and 
that  it  then  seemed  to  be  perfectly  regular.  Mr.  Fettis  seemed  to  be  an 
entirely  reliable  sort  of  a  man.  I  had  a  great  deal  of  confidence  in  him. 
I  dropped  the  matter,  as  I  supposed  those'were  the  facts.  In  view  of  the 
circumstances  and  conditions  under  which  this  investigation  had  been 
ordered,  the  agreement  that  we  had  and  the  fact  that  there  was  an  indict- 
ment hanging  over  us,  we  looked  on  this  proposition  as  an  outrage. 

Mr.  Alexander:  In  other  words,  you  did  not  consent  to  the  investiga- 
tion in  the  manner  it  was  conducted  by  the  Government? 

Mr.  Lewis:    Not  at  all. 

Mr.  Alexander:  And  would  not  have  consented  if  you  had  known  it 
was  to  take  that  course? 

Mr.  Lewis:  Certainly  not — a  secret  investigation.  We  had  already  had 
too  much  secret  investigation.  The  sole  stipulation  was  that  this  should 
be  an  open,  above-board  investigation;  that  we  should  be  cognizant  at  all 
times  of  everything  that  was  done,  and  should  be  furnished  each  day  with 
a  duplicate  record  of  the  results  of  that  investigation. 

The  first  complaint  of  the  Lewis  Publishing  Company  as  to  tlie 
presence  of  the  postmaster's  special  representatives  was  forwarded 
on  June  19  b}'  the  third  assistant  to  the  postmaster-general.  Addi- 
tional complaints  were  forwarded  on  June  20  and  June  22.  The 
following  is  from  Lewis'  letter  of  June  16: 

We  beg  to  enter  a  most  respectful  protest  against  what  appears  to  be 
a  most  unjustifiable  and  unnecessary  attempt  to  use  the  present  investiga- 
tion being  made  by  your  special  commissioners  as  a  cloak  to  further  the 
purposes  and  designs  of  local  postal  officials,  who  have  already  procured 
criminal  indictments  against  officers  of  this  company  in  connection  with 
the  mailing  of  our  publications.  For  some  two  weeks  past,  two  clerks, 
working  separately  from  tlie  remainder  of  the  clerks,  and  apparently  under 
direct  and  continuous  orders  from  the  postoffice  inspectors,  have  been  con- 
ducting a  separate  and  independent  investigation  into  our  matters,  receiv- 
ing their  instructions  and  reporting  continuously  throughout  the  day  from 
and  to  the  local  postoffice  inspectors  and  Mr.  Wyman,  the  St.  Louis  post- 
master. 

We  entered  a  respectful  protest  to  Mr.  Fettis,  and  for  two  days  they 
did  not  appear.  Yesterday,  they  again  appeared  and  continued  their  former 
proceedings,  copying  papers  and  documents  and  apparently  conducting  some 
special  investigation  of  their  own,  entirely  outside  of  and  independent  of 
that  being  made  by  your  representatives.  We  are  informed  by  your  Mr. 
Fettis  that  these  men  are  not  under  his  jurisdiction,  nor  are  they  acting 
for  him  as  a  part  of  the  present  force  under  his  charge,  but  that  their 
investigation  is  a  separate  and  independent  one,  so  far  as  he  is  concerned. 

You  are  well  aware  of  the  criminal  indictments  pending  against  the 
officers  of  this  concern.  We  have  today  made  a  formal  demand  on  Mr. 
W^yman  for  a  letter  from  him,  advising  us  of  his  purpose  in  this  present 
investigation,  and  giving  us  some  credentials  for  the  men  now,  apparently 
acting  for  him.  He  doclined  to  give  us  any  information  in  writing.  We 
most  respectfully  protest  against  this  interference  with  the  present  open 
and,  what  we  believe  to  be,  entirely  fair  investigation,  and  submit  that  in 
view  of  the  present  proceedings,  such  course  of  action  on  the  part  of  the 
postmaster  and  the  local  inspectors  should  not  be  tolerated. 

In  response,  the  third  assistant  received  a  memorandum  from 
the   postmaster-general   which   he   characterizes   as   "the  most   as- 


^First  (1908)  convention  of  .Pioneers,  the  traveling  representatives  and  organisers  of 
the  American  Woman's  League  "The  second  (1909)  convention  ^Local  Representatives, 
successors  of  the  pioneers,  assembled  at  the  first  general  convention  of  the  American 
li'oinan's  League,   June,   loio 

These   groups   show   clearly   the   remarkably    rapid   growth   of   the   League   movement 


^First  Contention  of  Regents  of  the  American  JVoman's  League  called  for  Ihc  pur- 
pose of  organisation,  January   j(j,   iqii 

'^Second  Regents'  Convention,  August  6,  J(,>Il,  called  to  take  over  the  management  of 
the  League  from  the  Reorganization.  The  Regents'  Publishing  and  Mercantile  Corpo- 
ration was  organized  during  this  convention 


THE  DREYFUS  CASE  OF  AMERICA  609 

tounding  proposition  that  I  ever  heard  of  in  all  my  life."  After 
reviewing  the  facts  complained  of  by  Lewis,  Cortelyou  gives  the 
following  definite  instructions: 

I  desire  that  Mr.  Fettis  be  emphatically  reminded  that  it  is  his  duty 
to  obey  instructions  and  not  to  make  comments  thereon,  particularly  to 
persons  whom  he  is  investigating;  that  he  shall,  as  was  contemplated  in  my 
previous  instructions,  assume  direction  of  the  clerks  referred  to;  that 
their  investigation  be  made  a  part  of  the  investigation  being  carried  on 
by  him;  that  the  information  so  obtained  be  transmitted  daily  to  you  by 
Mr.  Fettis,  and  I  desire  that  it  be  by  you  promptly  transmitted  to  me.  Mr. 
Fettis  should  not  disclose  to  Mr.  Lewis  the  information  thus  obtained. 

General  Madden  makes  the  following  statement  in  this  connec- 
tion: 

The  matter  may  be  briefly  explained.  Presumably  the  postmaster-gen- 
eral had  again  placed  the  case  in  the  hands  of  the  third  assistant.  Tlie 
work  of  determining  the  simple  question  of  how  many  subscribers  there 
were  for  the  issues  in  dispute  was,  by  consent  of  the  company,  conducted 
at  its  establishment.  This  was  for  the  convenience  of  the  postal  officials 
as  well  as  the  company.  If  the  company  had  objected  to  the  presence  of 
the  officials  in  its  establishment,  the  subscription  orders  and  records  might 
have  been  sent  to  the  postoffice,  where  the  count  would  have  had  to  be  made. 
The  Commission  could  work  in  the  company's  offices  only  by  its  courtesy 
and  consent.  President  Lewis  now  complams,  on  June  16,  that  this  investi- 
gation of  the  third  assistant  is  being  made  the  cover  for  some  secret  inqui- 
sition conducted  on  the  side  by  the  postoffice  inspectors  and  the  local 
postujaster,  for  some  purpose  of  which  he  is  not  informed  and  of  which  he 
is  unable  to  get  a  satisfactory  explanation.  Here,  in  that  company's  plant, 
under  cover  of  the  third  assistant's  open  investigation  to  make  a  mere 
count  of  the  subscriptions,  he  was  conducting  some  sort  of  a  secret  inqui- 
sition into  the  books  and  papers  of  the  company,  surreptitiously,  making 
the  company  believe  it  was  part  of  my  investigation  to  determine  those 
matters  that  were  given  to  me  to  determine,  using  my  commission  as  a  cloak 
to  deceive  the   company. 

Acting  under  these  instructions  from  the  postmaster-general,  the  third 
assistant  wired  the  chairman  of  his  special  commission  in  St.  Louis  to  as- 
sume charge  of  the  men  working  on  the  secret  commission,  as  if  they 
were  working  for  him,  cause  them  to  report  to  him,  but  not  to  disclose 
what  they  had  obtained,  and  send  the  results  daily  to  the  third  assistant. 
On  June  28  the  first  package  containing  the  results  of  the  work  of  these 
men  was  received  by  the  third  assistant.  He  transmitted  the  package, 
unopened,  with  a  memorandmu  to  the  postmaster-general.  The  packages 
came  daily.    All  were  so  transmitted. 

On  June  23,  I  received  the  letter  from  the  postmaster-general,  instruct- 
ing me  to  carry  out  this  deception  by  means  of  having  my  men  cover  up 
this  secret  inquisition.  It  was  about  5:00  p.  m.  when  his  messenger  handed 
it  to  me.  I  read  it,  and  while  I  have  heretofore  spoken  of  my  suspicions  of 
what  was  going  on,  I  was  astounded.  T  could  not  believe  Mr.  Cortelyou 
meant  that.  I  thought  he  must  have  been  mistaken,  or  he  had  signed  a 
letter  prepared  for  him  by  some  one  else,  without  considering  what  it  really 
meant.  I  called  his  office  on  the  telephone  and  asked  his  private  secretary 
to  get  an  interview  for  me  right  away.  I  went  right  over,  placed  the  let- 
ter before  Mr.  Cortelyou  and  said,  "Mr.  Cortelyou,  do  you  really  mean 
to  have  such  a  thing  as  that  done?"  He  looked  at  the  letter  again  and  said: 
"1  have  considered  the  matter  thoroughly;  I  want  my  order  carried  out." 
That  was  his  answer.  I  walked  out,  astounded  that  it  had  become  pos- 
sible in  this  country  for  a  man  capable  of  such  an  action  to  become  post- 
master-general. 


6]0  THE  SIEGE  OF  UNIVERSITY  CITY 

This  deception  was  completed  by  tlie  following  memorandum  of 
the  postmaster-general  to  the  third  assistant,  under  date  of  July  6: 

Referring  to  Tour  memorandum  of  23rd  ultimo,  in  relation  to  the  case 
of  the  Woman's' Magazine  and  the  Woman's  Farm  Journal,  of  St,  Louis, 
and  in  which  you  advise  me  that  rou  have  instructed  Mr.  Fettis  as  fol- 
lows: "Assume  charge  of  clerks  working  under  your  agreement  with 
postmaster.  Do  not  change  Iheir  duties.  Cause  them  to  report  to  you, 
but  do  not  disclose  information  they  obtain.  Send  results  of  their  werk 
daily  to  me."  I  desire  that  this  work  shall  form  a  part  of  our  general 
investigation  in  the  case  of  the  two  publications  above  referred  to,  and  that 
Mr.  Fettis  be  instructed  that  hereafter,  instead  of  following  the  present 
procedure,  he  is  to  deliver  the  slips  daily  to  the  postmaster  at  St.  Louis, 
who  has  been  instructed  to  report  to  me  personally  from  time  to  time  re- 
garding them. 

General  Madden  sums  up  tlie  incident  in  the  following  manner: 
No  effort  is  here  made  to  characterize  this  deception  which  the  post- 
master-general practiced  on  the  publishing  company.  The  records  speak 
for  themselves.  According  to  the  Constitution,  the  people  are  guaranteed 
security  in  their  papers  and  effects  against  unreasonable  searches,  and 
searches  are  authorized  to  be  made  only  upon  warrant  issued  upon  probable 
cause,  etc. 

Note  how  artfully  the  thing  is  done.  The  company's  books  and  papers 
had  been  thrown  open  to  the  third  assistant's  commission.  Practically,  it 
has  possession  of  the  company's  offices.  The  chairman  of  the  commission 
is  required  to  assume  charge  of  these  secret  agents  as  if  they  were  clerks 
Avorking  for  him.  In  that  way  access  is  gained  to  the  books  and  papers 
of  the  company.  The  sealed  reports,  to  keep  up  the  deception,  are  handed 
to  the  chairman  of  the  commission.  Lest  the  fraud  be  noticed,  the  results 
are  forwarded  by  the  chairman  to  the  third  assistant  at  Washington,  to 
be  handed  to  the  postmaster-general.  They  are  then  handed  to  the  post- 
master at  St.  Louis,  who  is  instructed  to  report  to  the  postmaster-general 
"personally  from  time  to  lime,  regarding  them."  But  what  is  all  this  for? 
In  the  administration  of  what  postal  law  are  such  things  required? 

THE    postmaster's    MODE    OF    DEFENSE. 

The  use  to  which  the  names,  thus  secured  from  each  of  the  lists 
of  subscribers  counted  by  the  Fettis  Commission,  were  put,  was 
made  known  to  the  company  by  complaints  of  its  agents  and  sub- 
scribers, of  renewed  circularization  and  inquiries  through  local 
postmasters.  Following  is  a  copy  of  the  circular  signed  "Frank 
Wyman,  Postmaster,"  received  by  one  of  Lewis'  agents: 

The  Department  has  been  informed  that  a  certain  patron  of  your  office 
(naming  him),  acted  as  agent  for  the  Woman's  Magazine,  published  at 
St.  Louis,  Mo.,  sending  in  lists  of  subscriptions  to  the  publishing  company 
during  the  year  1906.  It  is  desired  that  detailed  information  be  obtained 
as  to  the  following  specific  list  of  subscriptions  sent  in,  the  number  of 
subscriptions  being  six.  Among  them  appear  the  two  following  names  and 
addresses  (naming  them):  The  information  sought  is  of  the  utmost  im- 
portance to  the  Department,  and  it  is  desired  that  you  secure  same  from 
agent  personally,  if  possible,  and  return  to  me  with  as  little  delay  as  pos- 
sible.* 


•Space  was  provided  at  the  foot  of  the  sheet  for  the  following  information: 
The  date,  both  month  and  day,  that  the  list  was  sent  to  the  Lewis  Publishing 
Company.  The  amount  remitted  with  the  list.  How  the  remittance  was  made, 
whether  by  money  order,  express  order,  currency,  stamps,  or  otherwise.  If  money 
order,  the  date  shown  by  the  postmaster's  records.  Also  whether  or  not  the  agent 
won  a  prize. 


THE  DREYFUS  CASE  OF  AMERICA  611 

A  more  eiFective  device  for  destroying  an  agency  organization 
was  never  concocted,  although  there  is  no  evidence  that  the  postmas- 
ter either  knew  or  cared  whether  or  not  his  inquiries  would  have 
that  effect.  Very  few  agents  preserve  records  which  would  enable 
them  to  reply  with  accuracy  to  such  questions  as  the  above.  Nor 
do  most  persons  care  to  communicate  their  private  business  to  their 
neighbors  or  be  subject  to  interrogation  by  postmasters,  letter  car- 
riers or  other  petty  officials.  Speculation  as  to  the  reason  why 
such  inquiries  were  deemed  necessary  was  unavoidable.  Taken 
in  connection  with  the  fraud  order,  the  fact  of  which  was  known 
to  every  postoffice  employee,  tliere  could  be  but  one  logical  conclu- 
sion. The  Lewis  publications  were  deemed  fraudulent,  and  an 
effort  was  being  made  to  exclude  them  from  the  mails.  Each  dif- 
ferent classification  of  Lewis'  clubbing  lists  gave  rise  to  a  slightly 
different  circular,  in  addition  to  which  a  variety  of  special  circu- 
lars were  forwarded  to  the  subscribers  direct.  These  were,  of  them- 
selves, sufficiently  injurious.  But  the  postmaster,  in  his  anxiety  to 
successfully  defend  himself  and  make  good,  against  the  publisher's 
appeal,  the  position  which  he  had  assumed,  caused  to  be  printed 
and  enclosed  with  his  circulars  to  other  postmasters  the  following 
extraordinary   personal   memorandum : 

To  My  Brother  Postmasters:  The  Department  has  before  it  a  case  of 
imusual  gravity,  and  while  you  may  have  heretofore  received  similar  letters, 
it  is  of  paramount  importance  that  you  respond  to  this  one.  Its  relation 
to  the  case  is  more  vital  than  any  others.  I  therefore  strenuously  urge 
that  a  careful  and  prompt  response  be  sent  me,  with  the  fullest  possible 
information,  as  I  am  following  the  Department's  directions,  and  am  com- 
pelled to  seek  your  aid  as  stated. 

This  last  test  caps  the  climax.  The  postmaster,  with  the  aid  of 
Cortelyou,  first  foisted  onto  the  Fettis  Commission,  over  the  pro- 
tests of  the  chairman  of  the  commission  and  the  third  assistant, 
the  clerks  necessary  to  secure  these  names.  With  the  consent  of 
Cortelyou,  he  caused  this  information  to  be  secretly  obtained.  This 
was  in  direct  violation  of  the  agreement  with  the  publisher  that  the 
entire  investigation  should  be  open,  and  that  his  representatives 
should  have  knowledge  of  all  that  was  done.  He  then  made  use 
of  the  names  and  addresses  thus  obtained  in  a  manner,  than  which 
it  would  be  difficult  to  imagine  anything  more  injurious  to  the 
publisher.  To  make  confusion  worse  confounded,  the  clerks  em- 
ployed uiJon  this  work  were  guilty  of  numerous  errors.  Circulars 
relating  to  the  Woman's  Magazine  were  sent  to  subscribers  of  the 
Woman's  Farm  Journal,  and  vice  versa.  The  same  individuals  fre- 
quently received  the  same  blank  to  be  filled  out  a  second  or  third 
time.  Subscribers  were  repeatedly  catechised  by  mail  carriers  and 
summoned  to  the  postoffice.  Those  neglecting  or  refusing  to  fill 
out  the  first  circular,  received  a  second  or  third  importunate  de- 
mand. Altogether  a  condition  of  terrorism  was  inflicted  upon  the 
subscribers  and  agents.  The  result  was  that  many  subscribers 
denied  that  they  had  ever  ordered  the  publication.     Many  others 


612  THE  SIEGE  OF  UNIVERSITY  CITY 

wrote  the  publisher  to  discontinue  their  subscription.  They  did 
not  wish  to  be  subjected  to  this  species  of  petty  persecution.  The 
inspectors'  review  of  the  case  discloses  that  the  purpose  of  the 
postmaster  was  to  test  by  circularization  the  names  and  addresses 
thus  obtained.  Lewis  testifies  that  no  fewer  than  121  of  these 
injurious  circular  letters  have  been  sent  to  patrons.  A  Gatling-gun 
could  not  be  more  effective  in  mowing  down  a  subscription  list. 

REPOllT  OF  THE  FETTIS  COUNT. 

The  company's  representatives  attached  to  the  Fettis  Commission 
made  a  preliminary  report  on  August  20.  They  asserted,  in  brief, 
that  the  count  of  the  Citizens'  Committee  was  affirmed.  This  re- 
port was  drafted  by  Walter  B.  Stevens.  It  bears  the  signatures 
of  Messrs.  Stevens,  Ambrose,  Thompson,  Putnam,  and  Coakley,  as 
representatives  of  the  company.     It  is  summed  up  as  follows: 

In  conclusion,  the  undersigned  repeat  that  the  investigation,  searching 
and  rigorous  as  it  was,  did  not  cast  a  cloud  on  the  integrity  of  the  sub- 
scription lists  of  the  Woman's  Magazine  and  the  Woman's  Farm  Journal. 
The  system  of  handling  these  subscriptions  is  very  simple,  almost  crude. 
An  elaborate  system  is  not  to  be  expected  of  a  ten-cent  monthly  maga- 
zine. But  simple  or  crude  as  the  system  is,  the  investigation  left  no  doubt 
that  these  hundreds  of  thousands  of  subscriptions  have  been  coming  to 
the  Lewis  Publishing  Company  for  years,  and  are  still  coming.  The  sub- 
scriptions are  genuine.  They  twice  have  been  counted  within  the  current 
year,  and  the  results  substantially  agree. 

The  Fettis  Commission  comjileted  the  actual  count  about  the  mid- 
dle of  August,  but  prolonged  its  investigation  at  St.  Louis  into 
September.  Considerable  labor  was  then  required  to  digest  its  find- 
ings and  form.ulate  its  report.  That  was  vacation  time  in  the 
Department.  The  third  assistant  postmaster-general  was  occupied 
with  the  Penrose-Overstreet  Commission,  and  could  not  have  en- 
tertained the  report,  had  it  been  presented.  He,  therefore,  gave 
instructions  that  it  be  deferred.  When  finally  delivered  to  him  on 
January  3,  it  contained  an  exhaustive  summary  of  the  facts  ascer- 
tained. 

madden's  final  report. 

The  third  assistant  devoted  several  weeks  to  a  careful  analysis 
of  the  report  of  his  special  commissioners.  On  February  7  he  ren- 
dered his  decision  to  the  effect  that  no  excess  copies  had  been 
mailed  during  the  period  covered  by  his  investigation.  Ordinarily, 
his  decisions  were  transmitted  direct  to  the  postmaster.  General 
Madden  asserts  that  in  no  other  case  during  his  long  term  of  service 
did  he  submit  an  official  decision  to  the  postmaster-general  before 
transmission.  Owing  to  the  unusual  circumstances  of  this  case, 
however,  he  made  a  full  report  of  his  findings  and  the  basis  for 
them,  to  Cortelyou.  Exactly  two  years  had  elapsed,  by  a  coinci- 
dence, between  the  date  on  which  the  investigation  was  opened 
by  the  inspectors  on  February  7,  1905,  and  the  date  of  the  third 
assistant's  final  decision  on  February  7,  1907.  Madden  stated  in 
his  communication  to  Cortelyou  that  he  jjroposed  to  make  an  ex- 


^Faculty  of  the  school  of  Ceramics  of  the  Art  Institute  of  the  American 
Woman's  League.  The  most  notable  group  of  Ceramic  Artists  and  experts  ever  asso- 
ciated with  an  American  institution.  From  left  to  right,  Frederick  H.  Rhead,  Emile 
Diffloth,  Samuel  Robineau,  Mrs.  Adalaide  .'ilsop-Robineau,  Eugene  Labarriere,  Ta.rile 
Doat,  E.  G.  Lewis 

^The  famous  Scarab  Vase,  by  Mrs.  .4dalaide  Alsop-Robineau,  which  took  the  Grand 
Prix  at  Turin,  Italy.  Show7i  with  other  vases  when  the  kiln  in  which  it  was  fired 
tvas  first  opened 


^Studio  of  M.   Taxile  Doat     ^Studio  ef  Mrs.  AdaUide  Ahof-Ri>b\ncau.   Art   Institute 
of  the  American  IVoman's  League 

Foremost  Ceramic  artists  of  Europe  and  America  respectively  Mrs.  Robincau  is  en- 
gaged upon  the  scarab  vase  which  won  an  international  medal  at  the  Twin  Italy 
Exposition,  11)11  "" 


THE  DREYFUS  CASE  OF  AMERICA  616 

haustive  report  in  three  divisions.  The  first  was  to  deal  with  his 
decision  on  the  local  postmaster's  appeal.  The  second  was  to  touch 
upon  the  rights  of  the  publications  in  the  second  class.  The  third 
was  to  contain  his  views  on  various  related  topics  affecting  the 
entire  postal  administration.  Only  the  first  section  of  this  report 
was  ever  completed  and  submitted  to  Cortelyou.  After  reciting 
the  provisions  of  the  postal  law  and  the  methods  and  findings  of  the 
Fettis  Commission  on  the  issue  of  a  legitimate  subscription  list, 
the  conclusion  was  reached  that  "under  no  rule  of  the  Depart- 
ment, so  far  applied  to  any  other  publisher  or  publication,  could 
any  exception  be  taken  to  the  great  bulk  of  the  subscribers  on  the 
list." 

The  following  paragraphs  are  quoted  to  indicate  the  spirit  of  fair- 
ness witli  which  the  third  assistant  approached  this  delicate  and 
complex  problem,  and  his  firm  and  statesmanlike  grasp  of  the 
grave  issues   involved: 

There  is  no  authority  of  law  for  holding  that  a  subscription  must  be 
paid  in  advance,  nor  for  holding  that  every  subscription  terminates  at  the 
expiration  of  the  period  for  which  it  is  written.  It  is  upon  this  construc- 
tion, existing  since  the  passage  of  the  act  of  March  3,  1879,  that  the  carry- 
ing of  expired  subscriptions  is  permissible.  *  *  *  So  far  we  have  never 
had  any  rule  at  all  on  this  subject,  other  than  the  one  quoted  from  Circular 
XXV.  This  is  indefinite  as  to  proportion  and  length  of  time.  Nor  has  it 
yet  been  applied  in  a  single  case.  The  necessity  of  a  rule,  fixing  definitely 
the  proportion  and  the  time  permissible  to  carry  expired  subscriptions,  has 
frequently  been  felt,  but  the  point  has  not  been  reached  where  it  was 
considered  wise  and  timely  to  formulate  and  publish  one.  The  advance 
of  the  reform  must  not  be  headlong  or  indiflFerent  to  the  equities  of  the 
situation.  It  must  be  by  steady,  well-thought-out,  well-planned,  and  con- 
servative degrees. 

This  expired  subscription  feature  is  only  one  phase  of  the  great  postal 
problem.  This  is  a  universal  practice.  Whatever  rule  may  be  adopted 
definitely  fixing  the  limits  of  proportion  and  time  as  to  credits  and  expira- 
tions, is  certain  to  shock  the  publishing  industry  to  its  very  foundation.  *  *  * 
Many  publishing  houses  carry  expired  subscriptions  three  or  four  years. 
The  practice  varies  according  to  what  the  publisher  himself  deems  to  be 
in  the  best  interests  of  his  business.  A  rule  definitely  limiting  the  privi- 
lege is  certain  to  meet  strenuous  opposition  as  a  curtailment  of  the  pub- 
lisher's right.  But  for  the  privilege  of  carrying  expired  subscriptions  for 
a  number  of  years,  it  is  said  that  the  country  press  could  not  exist.  The 
publishers  appearing  before  the  meeting  of  the  Postal  Commission  in  New 
York,  October  last,  argued  that  they  should  be  permitted  to  carry  expira- 
tions at  least  a  year  and  a  half. 

The  same  spirit  of  fairness  in  criticising  the  publisher  upon  one 
hand,  but  recognizing  his  legal  rights  and  equities  upon  the  other, 
is  shown  in  the  following  excerpts: 

Since  there  is  no  definite  existing  rule  of  limitation  to  apply  to  credits 
and  expirations,  to  make  a  special  rule  for  this  case  would  be  unwarranted 
and  open  to  serious  criticism.  To  give  any  such  rule  effect,  it  would  be 
necessary  to  apply  it  ex  post  facto,  penalizing  a  practice  not  in  conflict 
with  any  existing  rule.  This  would  have  to  be  done  in  face  of  the  pub- 
lisher's repeated  statements  that  he  stands  ready  to  meet  any  and  all  re- 
quirements or  limitations  of  the  Department  as  soon  as  shown. 

I  believe  the  publisher  of  the  Woman's  Magazine  is  violating  the  spirit 
of  the  second-class  privilege  by  carrying  such  a  volume  of  expired  sub- 


616  THE  SIEGE  OF  UNIVERSITY  CITY 

scriptions;  that  it  is  an  abuse;  that  it  results  in  other  abuses;  that  it  is 
unfair  to  the  Government,  and  that  it  is  reprehensible  and  ought  to  be 
dealt  with.  But  I  am  compelled  in  justice  to  state  that,  in  this  regard, 
this  publisher  is  no  worse  than  many  others  in  his  class.  Indeed,  it  is 
known  that  his  case  is  by  no  means  as  flagrant  as  some  others.  It  is 
understood  that  some  publications  in  this  class  carry  expired  subscriptions 
without  any  limit  save  the  convenience  of  the  publisher.  With  some  of 
them,  the  securing  of  a  subscription  means  that  the  name  will  never  be 
cut  off  their  list,  renewal,  or  no  renewal.  Once  a  subscriber,  always  a 
subscriber,  is  their  rule.  Then  again,  some  of  our  best  publications  carry 
expired  subscriptions  for  several  years.     ♦    *     * 

I  rest  on  this  question  by  stating  my  condemnation  of  the  practice,  but 
finding  that  there  is  no  existing  rule  which  I  would  be  justified  in  applying 
to  the  expired  subscriptions  in  this  instance,  either  as  to  the  proportion 
carried  or  for  the  length  of  time,  as  a  ground  upon  which  to  rest  in  de- 
ciding whether  or  not  there  has  been  an  excess  mailing  at  the  pound  rate. 
When  a  general  rule  is  formulated,  and  due  notice  has  been  given  when  it 
will  take  effect,  this  publisher,  with  others,  will  be  required  to  abide  by 
its  terms,  whatever  they  may  be. 

madden's  decision. 

Under  the  head  of  the  "Publisher  and  the  Public/'  the  third  as- 
sistant thus  discusses  the  conduct  of  the  entire  case: 

In  treating  this  case,  it  was  necessary  for  me  to  take  great  pains  to  be 
wholly  uninfluenced  by  the  estimates  or  opinions  of  others,  or  of  myself, 
as  to  the  character  of  the  publisher.  Whether  he  be  good  or  whether  he 
be  bad,  has  nothing  to  do  with  the  rate  of  postage  on  his  periodicals. 
It  is  all  a  question  of  law,  fact,  rules  and  departmental  practice  as 
affecting  the  periodical  itself.  The  publisher  and  the  publication  must  be 
treated  under  exactly  the  same  rules  as  all  others.  That  has  been  done. 
There  has  been  no  stretch  of  any  ruling  to  cover  any  question.  This  case, 
however,  is  unusual  in  that,  so  far  as  known,  never  before  has  any 
publisher's  business  or  business  methods  been  subjected  to  such  a  raking 
scrutiny.  The  minutest  details  have  been  examined  into  for  the  pur- 
pose of  rendering  a  decision  on  this  excess  question.  If  the  Woman's 
Magazine  be  in  whole  or  in  part  an  abuse  of  the  second-class  mailing 
privilege,  it  must,  in  justice,  be  said  that  it  does  not  appear  to  be  as 
flagrant  as  others  in  its  class,  which  have  come  to  attention  and  which,  for 
prudential  reasons,  the  Department  has  not  undertaken  to  deal  with,  action 
having  been  deferred  until  the  class  can  be  taken  up  as  a  whole  and 
uniform  rules  be  applied  to  all.  So  far,  the  Department  has  not  been 
free  to  take  up  and  deal  with  this  class,  nor  has  it  been  equipped  for 
such  a  campaign.  It  is  alleged,  and  it  is  generally  understood,  that  with 
this  kind  of  periodical,  great  abuses  of  the  second-class  privilege  exist. 
Many  of  the  claimed  lists  of  subscribers  are  not  legitimate,  as  required  by 
law.  In  other  particulars  they  do  not  comply  with  the  law's  requirements. 
However,  they  all  are  substantially  alike,  varying  only  in  degree  in  one 
particular  or  another.  Therefore,  tbe  wisdom  of  singling  out  one  or  two 
publications  to  be  dealt  with,  in  advance  of  being  ready  administratively 
to  handle  the  class  as  a  whole,  may  well  be  doubted.  Certainly,  this  can 
not  be  done  without  the  most  serious  embarrassment  to  the  operation  of 
uniform,  impartial  and  efficient  administration  of  the  second-class  mail 
problem.  *  *  *  This  case  did  not  originate  with,  and  was  not  under  the 
direction  of  the  third  assistant  postmaster-general  until  it  was,  by  your 
letter  of  April  14,  transferred  to  him.  If  the  postmaster  conceived  the 
Woman's  Magazine  to  be  an  abuse  in  whole  or  in  part  of  the  second-class 
privilege,  it  was  his  duty  to  report  his  reasons  for  so  believing  to  the 
third  assistant  postmaster-general,  and  await  instructions.  It  was  wrong 
ifor  him  to  proceed  on  his  own  motion  and  according  to  his  own  methods 
and  judgment,  *  *  *  My  decision  is  that  under  no  existing  rule  did  the 


THE  DREYFUS  CASE  OF  AMERICA  617 

publisher  of  the  Woman's  Magazine  mail  at  the  pound  rate  copies  in  excess 
of  his  privilege  at  that  rate  with  the  issues  from  October,  1905,  to  May, 
1906,  both  inclusive. 

Under  the  ordinary  procedure  of  the  Department,  Madden's  de- 
cision would  have  been  final.  If  the  St.  Louis  postmaster  was  dis- 
satisfied with  this  decision,  the  way  was  open  for  him  to  appeal  to 
the  postmaster-general.  This  case,  however,  is  unique.  No  parallel 
to  it  can  be  found  in  the  annals  of  the  Department. 

MADDEN   "broken"   BY   CORTELYOU. 

Since  the  policy  suggested  in  the  famous  "concerted  action"  tele- 
gram to  Inspector  Fulton  had  miscarried,  by  the  refusal  of  the  third 
assistant  to  summarily  withdraw  the  second-class  privilege  from  the 
two  publications,  on  the  inspector's  recommendation,  this  case,  and 
this  alone,  had  been  marked  for  the  especial  attention  of  the  post- 
master-general. The  case  had  originated  with  the  inspectors.  Cor- 
telyou  had  accei^ted  their  findings  as  to  the  bank.  Madden  had  re- 
jected them  as  to  the  publications.  The  third  assistant  had  then 
been  excluded  from  the  case  of  the  magazines,  except  when  emer- 
gency demanded  that  the  "proper  ofiicer"  of  the  Department  be 
called  upon  to  act.  Cortelyou  had  sustained  the  Triumvirate  at  St. 
Louis  to  the  full  extent  of  the  powers  of  his  office.  He  had  humil- 
iated the  third  assistant,  by  demanding  that  his  letters  be  submitted 
before  transmission.  He  had  caused  that  official's  communications 
to  be  edited.  He  had  sustained  the  postmaster's  protest  against 
Fettis.  He  had  officially  commanded  that  the  Lewis  Publishing 
Company  be  tricked  and  deceived.  His  attitude,  as  disclosed  by  all 
these  official  acts,  was  well  known  to  the  third  assistant.  Yet  that 
official  had  the  hardihood  to  submit  to  him  a  final  decision  reversing 
the  postmaster  at  St.  Louis  and  completely  exonerating  the  Lewis 
Publishing  Company.  The  consequences  of  this  decision  were  dis- 
astrous to  IMadden's  official  career.  The  following  is  his  own  ac- 
count of  what  took  place,  as  afterwards  published  by  him  to  the 
world : 

A    DRAMATIC    MOMENT. 

The  postmaster-general  received  the  report  and  then  closed  up,  as 
before,  for  a  full  week.  Mystery  again  settled  down  upon  the  place  deeper 
than  ever.  By  intuition  everybody  knew  that  the  report  did  not  please. 
It  was  not  what  was  wanted  or  expected.  The  third  assistant  had  failed 
to  read  the  "hand-writing  on  the  wall,"  that  nothing  favorable  to  Lewis 
was  acceptable.  There  were  more  secret  conferences  with  the  assistant 
attorney-general.  There  was  much  coming  and  going.  An  order  was 
given  the  third  assistant  not  to  make  known  his  judgment  on  the  appeal 
until  the  postmaster-general  gave  his  permission.  This  added  to  the 
mystery.     Such  a  thing  had  never  before  been  done. 

On  February  11,  the  fourth  day  after  the  decision,  the  third  assistant 
was  summoned  to  the  inner  ofiBce  of  the  postmaster-general.  There  sat  the 
head  of  the  postal  service  in  a  state  of  suppressed  rage.  As  the  street 
gamins  would  say,  he  was  "hot."  His  was  the  sort  of  passion  where,  in 
the  plays  and  stories,  the  dirk  without  warning  does  its  swift  and  fatal 
work.  There  could  be  no  mistake  that  this  angry  man  hated,  with  all  the 
venom  in  him,  the  person  who  was  in  his  presence.  1  had  dared  to  cross 
him.    This  was  the  second  time,    The  first  was  in  July,  1905,  when  I  had 


618  THE  SIEGE  OF  UNIVERSITY  CITY 

found  no  just  or  lawful  reason  to  put  the  Lewis  publications  out  of  the 
mails  in  a  conceit  of  action  with  the  issuance  of  the  fraud  order  against 
the  People's  Bank.  Now  I  had  again  decided  the  wrong  way,  though 
really  it  was  the  Fettis  Commission  which  had  cleared  Lewis. 

When  Mr.  Cortelyou  could  command  himself  to  speak,  he  said:  "The 
President,  sir,  will  accept  your  resignation.  Please  hand  it  in."  "He  shall 
have  ray  resignation,"  I  replied.  "I  am,  of  course,  aware  that  my  decision 
on  the  question  of  excess  mailings  by  the  Lewis  Publishing  Company  was 
displeasing  to  you;  but  it  was  the  only  decision  which  honestly  could  be 
made.  The  commission  found  the  postmaster  wrong  in  his  contentions.  I 
could  not  properly  sustain  him.  The  question  was  one  of  fact.  Did  the 
publisher  have  half  as  many  subscribers  on  his  lists  as  he  was  mailing 
copies  of  his  publications?  After  more  than  three  months'  work  by  some 
sixty-five  persons  in  counting  the  original  written  orders  of  the  subscribers, 
the  Commission  found  and  reported  that  more  than  half  the  copies  sent 
out  were  to  subscribers.  I  decided  only  in  accordance  with  its  findings. 
I  could  not  do  otherwise.     Lewis  was  right.     The  postmaster  was  wrong." 

"You  did  not  take  into  account  and  weigh  the  evidence  which  the 
inspectors  and  postmaster  furnished,"  the  postmaster-general  replied. 

"I  gave  their  testimony  all  the  weight  to  which  it  was  entitled.  It  was 
not  evidence.  It  was  mostly  assumptions,  which  were  false  and  misleading. 
It  could  not  properly  be  allowed  to  weigh  against  indisputable  facts.  To 
permit  such  assumptions  to  weigh  against  actual  conclusive  evidence  would 
be  not  only  absurd,  but  unjust  and  unlawful.  I  have  decided.  The  decision 
must  stand,  so  far  as  I  am  concerned." 

"When  you  write  your  resignation,"  said  Mr.  Cortelyou,  "do  not  let  it 
show  the  fact  that  it  was  asked  for."  "I  shall  comply  with  your  wish,"  I 
replied. 

THE  "proper  officer"   IS  REVERSED. 

Cortelyou  made  one  further  effort  to  bend  the  stubborn  third  as- 
sistant to  his  will.  On  February  13,  he  came  back  at  the  third 
assistant  with  a  forty-page  review  of  the  latter's  decision.  Accord- 
ing to  Madden's  statement,  "he  demanded  a  review  of  the  case,  and 
practically  insisted  that  the  decision  be  reversed." 

Madden  alleges  that  in  his  opinion,  Cortelyou  had  little,  if  any- 
thing, to  do  with  drafting  this  letter.  The  writer  betrays  a  fami- 
liarity with  the  details  of  the  case  which  could  come  only  from  the 
most  exhaustive  personal  investigation.  It  is  regarded  by  Madden 
as  unlikely  that  Cortelyou  could  have  given  to  the  subject  the  time 
necessary  to  master  its  intricate  details.  His  judgment  is  that  Ful- 
ton was  brought  on  from  St.  I.ouis  expressly  to  prepare  the  letter, 
in  an  effort  to  wring  from  the  "proper  officer"  of  the  Department 
the  decision  desired.  Copious  extracts  were  made  from  Madden's 
report.  These  are  contrasted  with  the  findings  of  the  postmaster 
and  the  inspectors.  Then  follow  comments  calculated  to  establish 
the  fact  that  Madden's  decision  ought  to  be  reversed.  Space  does 
not  permit  a  full  digest  of  this  letter.  The  position  of  the  St.  Louis 
Triumvirate  was,  in  general  terms,  restated  and  affirmed.  Cortelyou 
concludes : 

I  wish  you  to  reconsider  this  case,  in  the  light  of  the  inquiries  and 
suggestions  contained  in  this  memorandum.  You  are  not  to  determine 
whether  it  is  politic  or  hnpolitic  to  rule  upon  this  matter,  either  the  one 
way  or  the  other.  Your  duty  is  merely  to  examine  all  the  evidence  before 
you,  from  whatever  source  derived,  and  determine  whether,  under  the  law, 
the   action  of  the  postmaster   at   St.   Louis   was   proper   and   should   be 


THE  DREYFUS  CASE  OF  AMERICA  619 

sustained,  or  was  improper  in  whole  or  in  part  and  should  be  reversed. 
You  may  have  reason  to  believe  that  there  are  other  publishers  whose 
methods  and  practices  are  as  bad  as,  or  worse  than,  those  of  this  pub- 
lisher. But  that  fact  certainly  has  no  bearing  upon  the  action  which  your 
duty  demands  you  to  take  as  to  those  features  of  the  case  which  should 
be  considered  without  regard  to  the  class  to  which  it  belongs. 

It  seems  to  me  that  in  giving  credence  to  the  claims  of  the  publisher,  you 
have  entirely  lost  sight  of  the  findings  of  the  postmaster  at  St.  Louis  and 
the  postoffice  inspectors.  Certainly  the  investigations  made  and  reports 
submitted  by  those  officers  are  entitled  to  at  least  equal  weight  with  the 
claims  of  a  publisher  who  is  under  investigation.  It  should  be  remem- 
bered, also,  that  the  original  investigation  by  these  officers  was  made  at  a 
time  when  the  methods  of  the  publisher  were  more  nearly  normal  and 
when  he  was  not  contemplating  investigation  by  the  Postoffice  Department. 
This  was  calculated  to  put  the  publisher  upon  his  guard,  and  it  is  possible 
that,  when  your  subsequent  inquiry  was  made,  however  thorough  and 
conscientious  it  may  have  been,  he  had  adopted  measures  which  effectively 
concealed  past  practices.  Indeed,  subsequent  inquiries  by  the  postmaster 
and  inspectors  seem  to  have  developed  this  to  have  been  true.  *  *  *  I  desire 
nothing  but  a  just  and  impartial  report,  and  will  sustain  you  in  making 
such  a  report.  But  I  do  not  feel  that,  in  the  absence  of  a  further  state- 
ment from  you  in  response  to  the  questions  raised  in  this  memorandum, 
I  would  be  warranted  in  approving  your  action. 

The  third  assistant  responded  to  the  postmaster-general's  forty- 
page  letter  on  March  2,  with  a  brief  preliminary  memorandum. 
Later,  on  the  same  day.  Madden  complied  with  Cortelyou's  request, 
by  transmitting  a  full  review  of  the  entire  case,  consisting  of  one 
hundred  and  sixty-four  typewritten  pages.  A  complete  review  of 
this  communication  is  clearly  impossible  here.  Luckily,  it  is  un- 
necessary. In  large  part,  it  consists  of  a  rehearsal  of  facts  with 
which  the  reader  is  already  thoroughly  familiar.  The  issue  between 
the  third  assistant  and  the  postmaster-general  is  sharply  defined  in 
the  following  paragraphs: 

You  say  that  the  fact  that  other  publishers  are  abusing  the  second- 
class  privilege  is  of  no  relevancy  in  this  case.  I  do  not  understand  what 
you  mean  by  that.  It  cannot  be  that  you  mean  one  publication  should  be 
singled  out  of  a  class  and  dealt  with  in  some  extraordinary  way,  out  of 
accord  with  the  general  policy  and  practice  as  to  the  class  in  which  it 
belongs?  I  did  not,  however,  decide  whether  or  not  the  Woman's  Magazine 
is  an  abuse.  I  did  say  that  I  thought  the  publisher  was  abusing  hid 
privilege  as  to  carrying  expired  subscriptions,  but  the  abuse  of  the  publi- 
cation and  its  mailings  as  a  whole,  and  an  abuse  in  the  practice  of  carry- 
ing expired  subscriptions,  are  two  different  matters.  You  are  correct  as 
to  no  such  thorough  investigation  having  ever  been  made  in  any  case  as 
in  the  Woman's  Magazine.  I  have  already  shown  in  this  communication 
that  we  never  dealt  with  any  case  before  as  we  have  with  this  one.  *  *  * 

You  say  that  when  I  have  sufficient  information  that  other  publishers 
are  guilty  of  such  flagrant  abuses,  my  duty  will  be  plain.  I  do  not  quite 
understand  you.  I  do  not  know  whether  you  refer  to  the  abuse  of  carry- 
ing expired  subscriptions  in  too  great  a  proportion  and  too  long,  or 
whether  your  statement  is  as  to  the  publication  as  a  whole.  We  now  know 
that  there  are  many  abuses  in  the  mail-order  type  of  publications,  as  that 
term  is  generally  understood,  much  more  flagrant  than  in  the  case  of  the 
Woman's  Magazine.  But  I  have  not  reported  that  it  (the  Woman's 
Magazine)  is  or  is  not  an  abuse,  taking  the  business  as  a  whole. 

You  say  that  I  should  take  cases  up  promptly  and  deal  with  them  ac- 
cording to  the  law  and  the  facts.  You  cannot  possibly  conceive  of  the 
volume  of  business  transacted  in  this  bureau  from  day  to  day,  and  what 


620  THE  SIEGE  OF  UNIVERSITY  CITY 

the  effect  of  such  disorderlj^  work  would  be,  and  how  the  singling  out  in 
that  way  of  a  publication  here  and  tliere,  in  one  or  another  class,  and 
dealing  with  it  alone  of  its  class,  would  bring  down  ujion  us  such  a  protest 
against  its  unfairness  that  the  public  condemnation  of  our  work  would  soon 
put  a  stop  to  it.  We  can  hope  to  succeed  in  this  reform  work  only  while 
we  are  considerate  of  the  morals  and  equities  of  the  situation,  and  are 
careful  to  be  not  only  within  the  law,  but  to  be  following  a  course  which 
will  appeal  to  the  public  as  fair. 

You  no  doubt  have  the  power  to  direct  any  course  of  procedure.  But 
you  never  before  indicated  that  you  desired  such  a  radical  change  in  the 
policy  which  has  all  along  characterized  the  work  of  this  bureau  in  dealing 
with  this  problem.  If  the  second-class  were  not  literally  infested  with 
abuses  as  it  is,  and  there  existed  only  one  here  and  there,  we  should,  of 
course,  take  them  up  as  we  found  them  and  deal  with  them  regardless  of 
the  class  in  which  the  abuse  was  found.  But  these  practices  are  of  long 
years'  standing.  The  publishers,  by  reason  of  non-interference  on  the 
part  of  the  Department,  are  justified  in  believing  that  they  are  not  abuses 
at  all.  The  Department  has  declared,  and  has  followed  all  along,  the 
practice  of  giving  notice  of  changes  of  rules  concerning  the  application  of 
the  law  under  the  reform.  The  only  way  we  can  successfully  handle  this 
work  at  all  is  by  dealing  with  publications  in  classes.  We  must  go  through 
one  at  a  time,  take  the  more  flagrant  class  first,  and  the  more  flagrant 
abuse  in  that  class  first,  as  nearly  as  we  can  locate  them.  You  do  not 
seem  to  appreciate  that  this  reform  work  is  a  revolution  and  not  an 
ordc-rlr  procedure  of  administering  a  law  from  the  beginning.  The 
Department  itself  is  not  clean.  *  *  * 

I  spoke  of  the  raking  scrutiny  given  this  publisher's  business  by  this 
bureau,  because  never  before  had  such  an  investigation  been  undertaken. 
Ordinarily,  we  require  a  publisher  to  prove  his  right.  We  do  not  undertake 
to  prove  that  he  has  not  the  right,  as  was  done  in  this  case.  In  dealing 
with  this  case,  in  this  reverse  way,  it  was  necessary  to  keep  a  force  of 
from  sixty-five  to  seventy  persons  for  upward  of  three  months,  scruti- 
nizing every  scrap  of  paper  which  furnished  any  evidence  upon  the  ques- 
tion of  the  subscription  list.  It  is  believed  that  not  many  publications 
could  survive  such  an  ordeal.  What  might  happen  in  the  entire  field  while 
we  were  concentrating  all  of  our  energies  on  one  case  may  be  left  to 
conjecture.  To  make  any  sort  of  progress  at  all,  under  such  methods  as 
were  pursued  in  the  Woman's  Magazine  case,  we  should  require  a  thousand 
additional  employees,  available  all  the  time  in  the  field,  as  well  as  an 
addition  to  the  departmental  force,  to  deal  adequately  with  the  matters 
arising,  from  day  to  day,  in  connection  with  such  investigations.  We 
should  not  have  taken  up  this  case  as  we  did  but  for  the  manner  in  which 
the  issue  had   been   drawn   at  the  time   it  was  transferred   to  me.   *   *   ♦ 

The  postmaster's  and  the  inspectors'  case  seems  to  rest,  in  the  last 
analysis,  upon  the  theory  that  expired  subscriptions  may  not  legally  be 
counted.  In  this  proposition,  knowing  the  universal  practice  of  publishers 
and  the  rules  of  the  Department,  it  is  impossible  for  me  to  concur. 

THR    LAST    TWO    DAYS    AND    NIGHTS. 

Only  two  days  now  intervened  before  the  close  of  the  adminis- 
tration of  Cortelyou  as  postmaster-general.  These  closing  hours  of 
his  administration  appear  to  have  been  very  largely  devoted  to  the 
case  of  tlie  .Lewis  Publishing  Company.  The  third  assistant's  decis- 
ion, supported  by  his  lengthy  review,  created  a  presumption  in  favor 
of  the  publisher  which  might  have  weight  with  the  succeeding  ad- 
ministration. Tt  might  leave  a  blemish  upon  Cortelyou's  career, 
should  the  facts  ever  come  to  light.  Then,  too,  this  was  the  last 
opportunity  the  postmaster-general  would  have  to  sustain  the  Trium- 
virate at  St.  Louis.     The  third  assistant  standing  firm,  and  his  rcsig- 


THE  DREYFUS  CASE  OF  AMERICA  621 

nation  having  been  requested,  the  case  could  not  be  decided  against 
the  publisher  unless  Cortelyou  was  willing  to  assume  full  responsi- 
bility. The  record  must  be  set  right.  The  Triumvirate  must  be  sus- 
tained. Preparations  must  be  made  to  meet  the  storm  of  criticism 
certain  to  be  raised  by  Lewis  and  his  associates.  The  two  days  in- 
tervening between  the  final  review  of  the  third  assistant,  affirming 
his  decision  in  favor  of  the  publisher,  and  the  hour  in  which  Mr. 
Cortelyou  vacated  his  office,  bore  fruit  in  a  letter  to  the  third  assist- 
ant, severely  rebuking  him  for  his  alleged  mismanagement  of  the 
entire  case.     From  that  epistle,  the  following  extracts  are  taken: 

Inconsistencies,  evasions  and  statements  flatly  contradictory  of  each 
other  run  through  the  whole  length  of  your  communication.  The  expla- 
nations and  excuses  offered  in  support  of  the  position  which  you  have 
taken  are  so  flimsy  and  so  lacking  in  every  element  of  common  sense  and 
reason,  that  it  is  amazing  that  an  officer  of  your  experience  and  assumed 
expert  knowledge  of  the  subject  to  which  the  comnmnication  relates, 
would  be  willing  to  take  responsibility  for  preparing  and  submitting  it  to 
his  official  superior.  You  have  obscured  the  situation  by  including  in  this 
voluminous  communication  a  vast  amount  of  irrelevant  comment  and 
numerous  misleading  and  untrue  statements.  Your  object  seems  to  be 
to  place  the  postmaster-general  in  a  false  position,  and  to  throw  back 
upon  him  the  responsibility  and  discredit  which  attach  to  your  inexcusable 
mismanagement  of  this  whole  matter.  *  *  *  You  have  taken  up  these  two 
questions  in  the  inverse  order,  deciding  that  there  have  been  no  excess 
mailings  by  the  company,  but  leaving  undetermined  the  question  whether 
the  two  publications  are  entitled  to  second-class  privileges.  No  reason  is 
given  for  this  change  in  the  mode  of  procedure  directed  by  my  letter;  and 
yoxt  knew  that,  at  this  late  date,  I  could  not  wait  for  your  finding  upon 
the  question  of  the  second-class  privilege.  *  *  * 

You  say  that  what  the  postmaster  at  St.  Louis  did  in  pursuance  of  his 
inquiries  as  to  alleged  excess  mailings  by  the  Lewis  Publishing  Company; 
what  the  postoffice  inspectors  found  in  the  course  of  their  investigations; 
what  has  been  sworn  to  by  employees  and  ex-employees  of  the  company; 
what  declarations  have  been  made  by  the  president  of  the  company  against 
its  interests;  what  its  published,  and  presumably  established,  rules  were  as 
to  expired  subscriptions,  and,  in  fact,  every  other  matter,  except  the  count 
of  subscription  letters  made  by  your  commission  and  the  actual  receipts 
of  the  postmaster  showing  weights  of  mailings,  have  received  no  attention 
or  consideration  from  you  whatever.  That  an  officer  acting  in  a  quasi- 
judicial  character,  as  you  assume  to  be  doing,  should  put  out  of  view  such 
material  and  important  evidence  and  testimony,  is  incomprehensible.  *  *  * 

I  am  not  able,  in  the  brief  time  remaining  before  my  retirement  from 
this  office,  to  comment  in  further  detail  upon  the  matters  set  forth  in  your 
memorandum  by  way  of  excuse  or  explanation  of  your  action.  I  shall, 
however,  give  them  further  attention  later,  and  see  that  the  results  o.f 
such  attention  are  embodied  in  the  official  records  of  the  Postoffice  De- 
partment. 

Cortelyou  has  testified  as  to  this  communication,  to  the  following 
effect: 

Tlie  subject  of  this  letter  was  discussed  with  the  officers  of  the  attorney- 
general's  office  and  some  of  the  inspectors.  I  don't  recall  how  many.  I 
talked  with  the  assistant  attorney-general.  Judge  Goodwin;  probably  with 
Mr.  Fulton,  and  several  others.  I  don't  know  how  far  my  conversations 
went  at  that  time.  I  do  not  recall  their  advising  the  writer  as  to  this 
letter,  but  the  document  that  I  received  called  for  a  comment  of  some 
sort,  and  the  brief  time  remaining  in  my  administration  admitted  of  my 
writing  only  that.    As  to  some  of  the  facts  and  figures,  I  called  upon  the 


622  THE  SIEGE  OF  UNIVERSITY  CITY 

gentlemen  who  have  been  working  on  the  case  for  months  and  incorporated 
their  facts  and  figures  and  such  statements  that  I  had  indicated  I  wanted, 
as  a  framework  for  a  reply.  I  then  dictated  the  salient  portions  of  that 
letter  to  my  stenographer.  /  devoted  practicallt/,  you  might  say,  the  last 
tico  days  in  my  Department  to  this  case,  and  two  ivhole  nights.  The 
statement  that  I  could  not  wait  was  due  to  the  fact  that  I  thought  I 
should  not  turn  o%'er  to  my  successor  a  burden  I  had  had  for  two  years. 
It  would  have  taken  him  six  months  to  familiarize  himself  with  the  matter. 
I  worked  days  and  nights  for  the  purpose  of  clearing  up  those  facts  with 
which  I  was  personally  familiar. 

"assassination"  of  the   m'oman's  magazine  and  farm   journal. 

After  thus  clearing  the  way,  by  removing  the  third  assistant  and 
rebuking  him  for  his  "inexcusable  mismanagement/'  Cortelyou,  dur- 
ing the  closing  hours  of  his  administration,  addressed  to  the  post- 
master at  St.  Louis  two  letters  over  his  own  signature.  The  first 
sustained  the  postmaster  against  the  appeal  of  the  publisher  as  to 
alleged  excess  mailings  of  the  Woman's  Farm  Journal  and  covered 
into  the  treasury  the  cash  deposited  at  the  so-called  transient  second- 
class  rate.  Not  content  with  this,  however,  Cortelyou  took  up  and 
sustained  the  recommendation  of  the  postmaster  that  the  second- 
class  entry  of  the  Woman's  Farm  Journal  be  withdrawn.  He  closes 
tliis  letter  with  the  following  paragraph: 

You  will,  therefore,  refuse  hereafter  to  accept  for  mailing,  at  the  second- 
class  rate  of  postage,  copies  of  the  said  publication,  and  inform  the  pub- 
lisher that  the  second-class  mailing  privilege  heretofore  extended  the 
Woman's  Farm  Journal  is  withdrawn,  and  that  the  order  granting  the 
same  is  revoked. 

The  second  letter  denies  the  appeal  as  to  the  alleged  excess  mail- 
ings of  the  Woman's  INIagazine  and  covers  into  the  Treasury  the  cash 
deposits  of  the  publisher.  The  postmaster-general  then  reverts  to 
the  original  application  for  the  Woman's  Magazine  to  second-class 
entry  on  the  occasion  of  the  change  of  name  from  the  "Winner," 
five  years  earlier,  rules  that  the  Woman's  Magazine  had  never  been 
admitted  to  the  second-class,  and  denies  that  application  in  the  fol- 
lowing language: 

In  the  matter  of  your  recommendation  that  the  Department  deny  the 
pending  application,  submitted  August  2iJ,  1902,  for  entry  of  this  publi- 
cation as  second-class  matter,  you  are  informed  that,  upon  a  hearing 
granted  the  publisher  on  the  same  dates  (April  30  and  May  1,  1906),  and 
upon  a  careful  and  thorough  investigation  of  all  of  the  evidence  by  the 
Department,  I  find  that  the  publication  does  not  have  a  legitimate  list  of 
subscribers;  thftt  it  is  designed  and  published  primarily  for  advertising 
]>urposes,  and  that  it  is  being  circulated  at  a  nominal  rate,  contrary  to 
the  law  and  the  regulations  of  the  Department.  You  will,  therefore,  refuse 
hereafter  to  accept  for  mailing  at  the  second-class  rate  of  postage  copies 
of  the  said  publication,  and  inform  the  publisher  that  his  application  for 
entry  of  the  Womark's  Magazine  as  second-class  matter  is  denied. 

The  effect  of  these  two  decisions  was  to  cover  into  the  Treasury 
about  thirty  thousand  dollars  of  the  company's  money,  which  had 
been  deposited  under  ])rotest  pending  the  appeal,  and  to  make  the 
company,  in  theory,  liable  on  its  fifty-thousand-dollar  bond  for  addi- 
tional excess  postage  to  a  considerable  amount.     The  following  is 


THE  DREYFUS  CASE  OF  AMERICA  623 

Afadden's  comment  on  this  phase  of  the  decision  before  the  Ash- 
brook  Committee: 

If  the  officials  had,  by  force,  broken  down  the  doors  of  the  company's 
plant,  blown  open  its  vaults  and  taken  the  same  amount  of  money  there- 
from, it  would  have  been  no  bolder  or  more  high-handed  robbery  than  was 
perpetrated  upon  the  company  by  means  of  this  decision  of  the  postmaster- 
general,  false  as  to  law  and  false  as  to  facts. 

The  two  years'  campaign  against  Lewis'  publications  was  at  an 
end.  The  Woman's  Magazine  and  Woman's  Farm  Journal  had  fal- 
len. As  Lewis  would  put  the  matter,  in  his  expressive  phrase:  the 
Woman's  Magazine  and  Woman's  Farm  Journal  had  been  assassi- 
nated. • 
lewis'  gatling-gun. 

During  the  summer  of  1906,  while  the  investigation  of  the  Fettis 
Commission  was  in  progress,  Lewis  was  erecting  a  new  fortress  and 
installing  therein  a  Gatling-gun.  These  were  the  Woman's  National 
Daily  building  and  the  great  Goss  press,  elsewhere  described  as  the 
greatest  printing  press  in  the  world.  In  his  statement  before  the 
Ashbrook  Committee,  Lewis  remarks  that  when  the  Siege  most  un- 
expectedly began,  he  found  himself  equipped  with  muzzle-loading 
rifles,  that  is,  his  monthly  publications.  He  was  put  to  enormous 
expenses  to  communicate  with  the  stockholders  of  the  bank  by  let- 
ter, for  the  reason  that  the  Woman's  Magazine  and  the  Woman's 
Farm  Journal  were  made  up  two  months  in  advance.  It  was  there- 
fore a  month  or  six  weeks  after  each  fresh  attack  of  the  allies  before 
he  could  rally  his  readers  through  his  editorial  columns.  For  this, 
and  other  reasons,  he  had  announced  the  intention  of  organizing  a 
national  daily  newspaper  for  women,  as  part  of  the  program  for  the 
reorganization  of  the  Lewis  Publishing  Company,  growing  out  of 
the  exchange  of  its  capital  stock  for  the  securities  of  the  People's 
Bank.  Partly  in  commemoration  of  the  bank  and  partly  in  the 
hope  that  it  might  be  reorganized  and  developed  along  the  original 
lines,  Lewis  resolved  to  erect  a  building  for  the  projected  newspaper 
upon  the  plans  originally  designed  for  the  bank.  The  Egyptian 
Temple  was  therefore  constructed  with  the  funds  realized  by  the 
Lewis  Publishing  Company  from  the  liquidation  of  the  bank.  In 
the  fall  of  1906,  this  building  was  completed  and  the  great  press 
was  installed. 

Notwithstanding  indictments  and  unfavorable  newspaper  notor- 
iety, Lewis  retained,  to  a  large  degree,  the  confidence  of  his  fellow 
townsmen.  A  considerable  group  of  St.  Louis  bankers  and  business 
men  attended  the  dedicatory  exercises,  and  one  of  the  foremost  rep- 
resentatives of  the  city  of  St.  Louis  and  State  of  Missouri,  former 
Governor  David  R.  Francis,  delivered  the  address.  The  tribute  paid 
to  Lewis  by  Francis  on  this  occasion  indelibly  marks  one  of  the 
milestones  in  the  former's  career.  The  St.  Louis  Republic  devoted 
a  half  column  to  a  record  of  the  proceedings.  The  following  para- 
graphs are  quoted: 


624  THE  SIEGE  OF  UNIVERSITY  CITY 

In  the  presence  of  about  three  hundred  persons,  the  majority  of  whom 
were  women,  the  Woman's  National  Daily  iniilding.  University  City,  ad- 
joining St.  Louis  to  the  west,  was  dedicated  yesterday  afternoon.  Former 
Governor  David  R.  Francis  of  the  Louisiana  Purchase  Exposition  delivered 
the  principal  address.  Mrs.  William  II.  Lewis,  the  publisher's  mother, 
pressed  the  button  which  at  3:30  p.  m.  set  the  big  press  in  motion.  The 
press  was  decorated   with   American  Beauty  roses   and   strings  of  smilax. 

At  the  close  of  his  remarks.  Governor  Francis  was  presented  with  a 
life  subscription  to  the  Woman's  National  Dailj'.  E.  G.  Lewis  was  the 
recipient  from  the  builders  of  the  structure  of  a  diamond-set  key,  which 
unlocks  the  main  entrance  of  the  pressroom.  The  publisher's  father,  the 
Rev,  Wm.  H.  Lewis,  of  Bridgeport,  Conn.,  delivered  the  invocation.  While 
the  press  was  turning  out  the  papers,  Vogcl's  Orchestra  played  a  march 
composed  by  Guido  Vogel.  The  one  hundred  thousand  dollar  press,  which 
was  recently  installed,  is  said  to  be  the  only  one  of  its  kind  in  the  country. 
It  can  be  loaded  before  starting  with  newspaper  enough  to  print  for  the 
entire  edition.  From  the  press  the  papers  are  printed  at  the  rate  of  five 
thousand  per  minute  and  folded  into  a  battery  of  machines  which  print  the 
names  and  addresses  of  the  subscribers  on  the  cover  of  each  paper  and 
wrap  it,  mailing  at  the  rate  of  fourteen  thousand  copies  per  hour.  Under 
the  pressrooms  stand  the  mail  cars  into  which  the  papers  are  automatically 
loaded. 

The  tribute  of  Governor  Francis  to  Lewis'  integrity,  delivered  at 
the  dedicatory  ceremonies,  was  clear  and  unhesitating,  and  calcu- 
lated to  carry  conviction  of  his  honesty  and  earnestness  of  purpose. 
It  seems,  however,  to  have  angered  the  St.  Louis  postoffice  authorities 
afresh.  Hardly  had  the  remarks  of  Governor  Francis  challenging 
the  justice  of  the  attacks  upon  and  accusations  against  Lewis,  fallen 
from  his  lijis,  than  Lewis'  new  daily  was  itself  assaulted.  A  new 
commission  was  appointed.  Soon  a  fresh  investigation  into  Lewis* 
affairs  was  mider  way. 

The  limitations  of  space  forbid  any  detailed  description  of  the 
bitter  and  determined  attack  made  by  the  Triumvirate  at  St.  Louis 
with  a  view  to  throttling  this  infant  Hercules  in  its  cradle.  The 
application  for  entry  of  the  AVoman's  National  Daily  was  filed  in 
due  course  with  the  postmaster  at  St.  Louis.  It  was  held  in  sus- 
pense by  him  for  several  weeks,  pending  an  investigation  of  the  sub- 
scription list  by  the  same  injurious  methods  which  previously  ob- 
tained in  the  case  of  the  Woman's  Magazine  and  Farm  Journal. 
Meantime,  Lewis  was  compelled  to  deposit  postage  at  the  third-class 
rate.  The  local  postmaster  openly  boasted  among  his  intimates  that 
he  now  had  Lewis  where  he  wanted  him,  and  proposed  to  hold  up 
the  application  for  entry  of  the  new  publication  until  so  much  pos- 
tage had  been  deposited  that  the  denial  of  entry  would  "break"  the 
company  and  put  it  completely  out  of  business. 

REPRESENTATIVES   AT   WASHINGTON. 

Lewis  meantime  organized  a  Washington  News  Bureau,  in 
cliarge  of  General  Robert  M.  MeWade,  formerly  Consul  General 
of  tlie  United  States  in  China.  ]\IcWade  was  thus  well  and  favor- 
ably known  in  official  circles  at  Washington  as  a  trained  and  expe- 
rienced diplomat  of  the  highest  personal  integrity.  He  was  a  ncws- 
pajier  man  of  many  years'  experience.     Lewis  also  retained  as  Wash- 


THE  DREYFUS  CASE  OF  AMERICA  625 

ington  correspondent  Arthur  Wallace  Dunn,  formerly  representa- 
tive of  the  Associated  Press  at  Washington,  sometime  president  of 
the  Gridiron  Club,  and  personally  known  in  official  circles  as  a  jour- 
nalist of  the  highest  probity.  Both  representatives  were  trained  in 
political  tactics  and  diplomacy.  Both  were  well  and  favorably 
known  to  Washington  correspondents  of  the  press,  and  indeed 
throughout  official  Washington.  To  them  Lewis  unbosomed  him- 
self without  reserve  touching  the  maneuvers  of  the  Triumvirate  at 
St.  Louis,  and  through  them  from  time  to  time,  he  voiced  his  pro- 
test and  sought  to  bring  the  true  state  of  affairs  to  the  attention  of 
both  the  postmaster-general  and  the  third  assistant. 

Lewis  had  for  many  months  bided  his  time  with  such  patience  as 
he  could  command,  in  the  belief  that  once  the  case  of  the  Woman's 
Magazine  and  Woman's  Farm  Journal  was  submitted  to  the  third 
assistant  upon  the  report  of  the  Fettis  Commission,  justice  would 
be  done.  Wholly  unaware  of  what  was  going  on  behind  the  scenes, 
he  was  hugging  the  delusion  that  Cortelyou  was  standing  aloof  from 
the  case  and  would  not  enter  into  it  except  upon  appeal,  after  a 
decision  by  the  third  assistant.  In  such  an  event,  he  had  every 
confidence  in  the  postmaster-general's  fairness.  Of  the  rapidly 
widening  breach  between  the  third  assistant  and  the  postmaster-gen- 
eral, he  knew  nothing.  Neither  was  he  aware  of  the  extent  to  which 
the  St.  Louis  Triumvirate  had  the  ear  of  Cortelyou,  nor  of  the  ex- 
tent to  which  they  had  already  profited  by  the  postmaster-general's 
support. 

In  January,  1907,  Lewis,  as  publisher  of  the  Woman's  National 
Daily,  through  the  courtesy  of  Dvmn,  his  Washington  correspond- 
ent, received  an  invitation  to  attend  the  annual  banquet  of  the  Grid- 
iron Club,  a  fraternal  organization  of  the  Washington  correspond- 
ents of  the  press.  A  telegram  on  the  eve  of  his  departure  con- 
tained the  welcome  tiding  that  the  entry  of  the  Woman's  National 
Daily  had  been  at  last  conditionally  granted.  This  good  news  was 
in  due  time  confirmed  by  the  following  official  letter  from  the  post- 
master, which,  in  comparison  with  his  adverse  reports  against  the 
publication,  is  a  model  of  brevity:  "In  conformity  with  my  in- 
structions this  day  received  from  the  honorable  third  assistant  post- 
master-general, I  enclose  herewith  a  copy  of  his  communication  to 
me  which  will  explain  itself."  Lewis,  therefore,  set  off  on  his 
Eastern  junket  with  a  light  heart. 

Meantime,  the  Crumpacker  Bill,  the  full  history  of  which  we 
shall  consider  in  a  futui-e  chapter,  was  pending  in  Congress.  Both 
of  Lewis'  monthly  publications  had  advocated  the  passage  of  this 
bill.  They  had  appealed  incessantly  to  their  readers  to  petition 
congressmen  in  its  behalf.  The  Woman's  National  Daily,  as  yet 
silent  on  the  controversy  touching  the  Woman's  Magazine  and  the 
Farm  Journal,  had  warmly  espoused  this  measure.  The  effect  of 
this  agitation  was  to  once  more  direct  attention  to  the  circumstances 
surrounding  the  fraud  order  against  the  bank.     The  admission  to 


626  THE  SIEGE  OF  UNIVERSITY  CITY 

second-class  entry  at  this  psychological  moment  of  the  Woman's 
National  Daily,  Lewis'  Gatling-gun,  was  calculated  to  widen  the 
breach  between  Cortelyou  and  the  third  assistant.  The  full  confi- 
dence reposed  by  Cortelyou,  as  the  official  head  of  the  entire  in- 
spector service,  in  the  recommendation  of  his  spies  at  St.  Louis,  was 
such  that  he  probably  honestly  and  sincerely  believed  the  Woman's 
National  Daily  ought  to  be  excluded  from  the  mails.  At  any  rate, 
he  believed  that  it  might  be  excluded  by  an  exercise  of  administra- 
tive prerogative.  No  unbiased  student  of  the  official  records  of  this 
case  can  escape  the  conclusion  that,  had  Madden  accepted  the  rec- 
ommendations of  the  inspectors,  confiscated  the  publisher's  deposit, 
and  stifled  the  Woman's  National  Daily  at  its  birth,  such  action 
would  have  met  with  Cortelyou's  most  grateful  approval.  Had 
jNIadden,  in  fact,  referred  his  decision  regarding  the  Woman's  Na- 
tional Daily  to  Cortelyou  before  its  transmission  to  the  postmaster 
at  St.  Louis,  he  probably  would  have  been  ordered  to  revise  and 
reverse  it,  as  he  was  actually  directed  to  alter  his  final  decision 
touching  the  monthly  publications.  Happily  for  Lewis,  Madden 
handled  the  case  of  the  Woman's  National  Daily  "along  the  usual 
lines"  of  his  bureau. 

After  the  organization  of  the  Woman's  National  Daily  News 
Bureau  at  Washington,  Lewis  was  kept  advised  by  daily  bulletins 
of  the  progress  of  the  various  investigations  touching  his  interests, 
in  so  far  as  the  facts  could  be  obtained.  The  extent  to  which  he 
was  misled  as  to  the  postmaster-general's  attitude  Tna.y  be  inferred 
from  his  acknowledgment  of  the  information  contained  in  one  of 
these  reports  from  his  Washington  representatives,  in  one  instance, 
in  part,  as  follows : 

I  note  that  Mr.  Cortelyou  has  directed  Mr.  Madden  to  report  to  him 
on  two  points — one,  the  question  of  the  rights  of  transmission  at  the 
second-class  rates  of  the  Woman's  Magazine  and  Woman's  Farm  Journal, 
and  the  other,  the  question  of  excess  postage,  and  that  Mr.  Madden  will 
report  on  the  latter  today  and  on  the  former  within  about  a  month.  I 
presume  your  efforts  have  been  responsible  for  his  taking  a  hand  in  this 
matter,  and  it  certainly  looks  favorable  to  me.  I  am  inclined  to  think 
that  Mr.  Cortelyou  is  beginning  to  think  he  has  been  imposed  upon,  and 
that  we  have  been  imposed  upon  and  outraged  in  this  matter.  I  believe 
he  is  going  to  give  us  the  square  deal  he  has  promised. 

Both  the  third  assistant  and  the  postmaster-general  were  inter- 
viewed on  January  24,  and  the  correspondents  were  advised  that 
the  report  was  then  in  typewritten  form,  subject  to  revision,  but 
would  be  in  Cortelyou's  hands  in  the  near  future.  Cortelyou  seemed 
very  friendly,  and  renewed  his  assurances  of  a  "square  deal." 
Lewis  was  advised  that  all  indications  seemed  favorable.  The  fol- 
lowing telegrams  were  received  on  the  day  the  third  assistant's  re- 
port was  presented  to  the  postmaster-general: 

Decision  will  be  handed  Cortelyou  at  six  o'clock  tonight,  and  he  may 
give  it  out  tomorrow,  tonight  or  Wednesday.  Cannot  get  a  line  on  what 
Madden  has  done,  but  hope  it  is  favorable.  Wyraan  and  Fulton  are  here, 
but  for  what  purpose  I  cannot  learn, 


THE  DREYFUS  CASE  OF  AMERICA  627 

The  following  sinister  dispatch  was  received  by  Lewis  on  Feb- 
ruary 7: 

Probably  no  decision  from  Cortelyou  before  Monday.  Says  he  has 
much  to  do  in  clearing  up  his  work  to  leave  the  office  March  4.  He  still 
insists  that  Lewis  shall  have  absolutely  fair  treatment,  but  declares  case 
is  important  and  must  have  careful  attention.  Wyman  is  still  here,  but 
what  he  is  doing  still  remains  a  secret. 

The  shadows  of  the  coming  disaster  now  began  to  grow  more 
threatening.  That  the  situation  was  ominous  is  indicated  by  the 
following  letter,  dated  February  1 1 : 

I  suppose  you  will  get  this  before  Cortelyou  renders  his  decision.  I 
will  try  to  pin  him  down  to  something  tangible,  but  he  is  a  very  cold- 
blooded fish,  and  may  refuse  to  say  anything  or  answer  any  questions.  I 
have  been  trying  to  find  out  what  he  means  by  holding  up  the  decision. 
Sometimes,  I  think  he  wants  to  hold  it  until  too  late  for  a  resolution  of 
investigation  or  anything  of  that  kind  to  be  introduced  in  Congress.  Some- 
times, I  think  he  is  trying  to  find  something  more  to  your  detriment  in  order 
to  render  an  adverse  decision.  He  may  be  trying  to  get  everything  pos- 
sible, in  order  to  back  up  any  decision  he  may  render.  His  attitude  is 
such  that  it  is  rather  hard  to  say  just  what  he  means,  but  I  am  convinced 
he  does  not  like  Lewis.  The  passage  of  the  Crumpacker  bill  through  the 
House  was  a  severe  jolt.  That  alone,  if  it  never  gets  any  farther,  was  a 
great  victory.  It  stamps  Cortelyou  as  a  man  who  has  been  so  unjust  in 
his  rulings  that  Congress,  or  at  least  the  popular  branch  of  it,  found  it 
necessary  to  pass  a  law  providing  for  a  court  review  of  his  decisions.  He 
can  never  get  away  from  that,  and  he  is  the  kind  of  man  to  get  very 
sore  over  such  a  thing.  I  think  I  have  been  able  to  observe  a  distinctly 
unfriendly  attitude  since  the  passage  of  the  Crumpacker  bill,  and  all  the 
while  he  has  been  asserting  that  he  is  going  to   give  you  a  square  deal. 

Lewis  responded  to  this  warning  in  the  following  pessimistic 
vein: 

We  have  about  given  up  all  hope  of  getting  any  fair  treatment  out  of 
George  B.  Cortelyou.  I  think  he  has  become  not  only  prejudiced,  but  so 
thoroughly  imbued  with  the  idea  that  in  order  to  clear  his  own  actions  as 
to  our  methods,  it  will  be  necessary  for  him  to  discredit  us  in  some  way, 
and  that  he  will  render  a  decision  accordingly.  *  *  *  This  whole  matter  is 
simply  an  unparalleled  outrage.  The  Woman's  Magazine  has  now  about 
recovered  from  the  effects  of  the  assaults  made  on  it  two  years  ago.  The 
April  issue  is  carrying  a  line  of  business  that  equals  anything  ever  carried 
by  the  Ladies'  Home  Journal.  It  is  nothing  short  of  a  crime  on  the  part 
of  Mr.  Cortelyou  to  handle  these  matters  the  way  he  has. 

Daily  telegrams  from  this  time  forward  reiterated  the  fact  that 
Cortelyou's  decision  had  not  been  promulgated,  and  that  no  inti- 
mation could  be  gained  as  to  when  it  might  be  expected.  Cortelyou 
made  a  trip  to  New  York  on  February  13,  and  the  report  was  held 
in  suspense,  pending  his  return.  Then  he  left  Washington,  on 
February  19,  for  Canton,  Ohio,  upon  a  visit  to  Mrs.  McKinley.  No 
decision  had  been  reached,  it  was  said,  but  his  private  secretary 
admitted  that  he  had  reviewed  the  case. 

LEWIS  GETS  A   BIRTHDAY  GIFT. 

Cortelyou's  tenure  of  office  as  postmaster-general  expired  by 
limitation  on  March  4,  midnight,  Lewis'  birthday.  That  night 
Lewis'  fortitude  was  put  to  a  test  which  recalls  vividly  the  trial 
designed  by  the  Adversary  in  the  afflictions  of  the  patriarch,  Job. 


628  THE  SIEGE  OF  UNIVERSITY  CITY 

The  children  of  Job,  according  to  Sacred  Writ,  were  eating  and 
drinking  wine  at  a  birtliday  feast  at  the  eldest  brother's  house. 
There  came  a  wind  out  of  the  desert  which  smote  the  house  so  that 
all  Avdthin  it,  save  only  a  messenger,  were  destro^'ed.  At  one  blow 
the  patriarch  was  made  desolate.  The  dramatic  crisis  so  vividly 
and  3'^ct  so  simply  sketched  by  the  familiar  lines  of  this  pathetic 
story,  grips  the  emotions  with  heightened  power  and  deepened 
intensity,  when  the  scene,  as  here,  shifts  to  modern  life.  The  imag- 
ination far  more  readily  depicts  the  eifects  of  a  like  catastrophe 
under  these  strikingly  similar  present-day  conditions. 

On  that  night  of  March  4,  Lewis'  friends  had  surprised  him  with 
a  birthday  feast.  A  large  party  of  his  co-workers  assembled,  and 
by  prearrangement  with  Mrs.  Lewis,  a  birthday  supper  was  served. 
No  news  is  good  news.  It  was  known  that,  unless  Cortelyou  acted 
against  the  Lewis  publications  before  midnight,  the  case  would  go 
over  to  his  successor,  and  would,  in  all  probability,  be  laid  aside. 
No  tidings,  good  or  ill,  had  come  during  the  business  day.  As  the 
hour  approached  when  the  power  and  authority  held  by  Lewis' 
arch-foe  was  to  pass  into  other  hands,  the  shadow  of  the  Siege 
graduall}'  lifted  from  the  minds  of  all.  While  the  gayety  was  at 
its  height  and  Lewis  was  receiving  the  congratulations  of  his  fam- 
ily and  friends,  the  wind  came  out  of  the  desert.  The  telephone 
bell  rang.  The  call  was  for  Lewis.  A  message  from  Washington 
was  read  to  him  over  the  phone.  It  apprised  him  that  Cortelyou 
had  withdrawn  the  second-class  privilege  from  both  the  Woman's 
Magazine  and  the  Woman's  P'arm  Journal.  The  same  hand  that 
had  struck  down  the  People's  Bank  had  struck  again  and  slain  the 
two  best-beloved  children  of  his  brain.  Even  the  property  loss  of 
millions  could  not  have  affected  him  thus  bitterly,  had  it  fallen 
upon  his  real  estate  or  any  of  his  other  ventures.  The  death  of 
the  Woman's  Magazine  was  to  Lewis  as  profound  a  tragedy  as 
the  death  of  a  first-born  child. 

Lewis  says  that  when  he  hung  up  the  receiver  after  hearing  the 
fatal  message,  his  inborn  patriotism,  for  the  first  time,  was  deeply 
shaken.  He  doubted  the  integrity  of  the  Government  under  which 
he  lived.  A  picture  of  the  utter  desolation  that  the  fall  of  the 
Woman's  Magazine  would  bring  to  University  City,  engulfed  and 
enshrouded  him.  For  him  to  have  been  stricken  dead  in  their 
midst  would  not,  he  knew,  have  broken  up  the  gathering  of  his 
friends  and  caused  them  to  depart  in  a  spirit  more  disconsolate  than 
would  the  message  which  he  harbored  in  his  own  bosom.  So,  with 
unmoved  demeanor,  he  went  back  qmong  his  guests,  like  the  Spartan 
youth  who  gave  no  sign,  though  the  fox  that  he  had  concealed 
beneath  his  robes  was  tearing  at  his  vitals.  After  midnight,  when 
the  guests  had  dispersed  and  his  wife  had  retired,  wholly  uncon- 
scious of  the  disaster  that  had  befallen,  Lewis  repaired  to  his  sanc- 
tun?  in  the  tower  to  herald  to  the  world  his  defiance.     He  would 


THE  DREYFUS  CASE  OF  AMERICA  629 

not  succumb,  even  to  this  deadly  stroke.  He  would  rally  his  fol- 
lowers and  sound  his  war  cry  louder  than  ever. 

The  soft,  clear  light  of  dawn  was  creeping  up  from  the  eastern 
horizon  when  his  plans  for  the  renewal  of  the  combat  had  been 
completed.  He  then  pulled  down  the  cover  of  his  old  red-topped 
mahogany  desk,  placed  the  bulky  manuscript  outlining  his  orders 
and  plans  of  battle  where  it  would  be  found,  hours  later,  by  his 
lieutenants,  to  be  transferred  to  the  columns  of  the  Woman's  Na- 
tional Daily,  stepped  down  the  marble  stairway  and  out  into  the 
morning  air.  Even  in  early  IMarch  the  lawns  of  University  City  are 
turning  green,  and  the  hint  of  spring  is  in  the  balmy  southern 
breeze.  Those  who  have  visited  this  favored  spot  can  vaguely  feel 
something  of  the  emotion,  which  must  have  welled  in  Lewis'  breast 
as  he  turned  his  back  upon  the  stately  tower  which  but  yesterday 
had  been  the  symbol  of  supreme  achievement.  Today,  men  would 
point  to  it  as  the  evidence  of  one  man's  folly.  Inherent  patriotism, 
which  inspires  men  to  lay  down  their  lives,  if  need  be,  upon  the 
field  of  battle,  is  a  product  of  the  soil.  Its  intensity  is  measured 
by  the  love  men  bear  for  the  land  of  their  nativity  or  adoption.  As 
Lewis  made  his  way,  at  daybreak,  along  the  curving  parkway  he 
had  built,  studded  with  the  springing  maples  he  had  planted,  past 
the  homes  of  the  friends  and  neighbors  Avhom  he  had  drawn  to  this 
entrancing  spot,  and  toward  his  own  commodious  and  beautiful 
dwelling,  who  can  doubt  that  his  mind  went  back  to  the  earlier 
scenes  when  all  this  now  flourishing  suburban  city  was  cowpasture? 
Even  then,  he  alone,  of  all  men,  could  see  the  future  City  Beautiful 
existing  only  in  his  imagination.  Who  can  wonder  that  the  archi- 
tect of  it  all  felt  the  spirit  within  him  harden  to  the  temper  of 
steel  in  grim  resolution  to  fight  on,  if  need  be,  "until  hell  freezes 
over?"  Thus  armed,  he  has  since  withstood  the  most  vicious  as- 
saiilts  that  could  be  made  upon  him  by  those  high  in  authority  in 
a  great  Nation.  This  unconquerable  resolution  has  given  him  a 
place  in  history  among  the  few  really  heroic  spirits  of  all  ages. 

When  Lewis  reached  home,  he  went  to  bed  and  slept  for  hours, 
as  tranquilly  as  a  child.  Toward  midday,  after  his  editorial  mat- 
ter had  been  set  in  type,  just  as  the  wheels  of  the  great  press  were 
about  to  be  put  in  motion,  he  returned  to  his  office.  He  then  found 
lying  upon  his  editorial  desk  the  following  telegram,  from  the  man- 
ager of  the  Woman's  National  Daily  News  Bureau  at  Washington: 

Confidential:  I  assure  you,  on  absolute  authority,  that  Madden  has 
been  forced  out  on  account  of  his  square  deal  on  the  Lewis  publications. 
He  is  making  a  desperate  fight,  but  the  odds  are  all  against  him.  He 
does  not  want  public  attention  directed  toward  fact  of  division  in  Depart- 
ment or  himself  as  central  figure,  but  fact  remains  he  is  being  sacrificed 
on  our  account.  He  depends  on  our  maintaining  honorable  confidence, 
but  when  time  comes  and  fight  is  on  in  the  courts,  the  whole  truth  of  this 
damnable  conspiracy  against  justice  will  assuredly  come  out. 


CHAPTER  XXVI. 

THE  GREAT  A]\IERICAN  FRAUD  ORDER. 

The  Goodwin  Bros. — The  Lewis  Case  in  Congress — Alexander 
Del  Mar's  Report — The  People's  Bank— The  Dan  Lewis 
Episode — The  Siege  Becomes  a  Political  Issue — Judi- 
ciary Committee's  Report  on  Crumpacker  Bill — Fraud 
Order  Against  Lewis  Suspended — Roosevelt  Upholds 
Bureaucracy — Was   Cortelyou   Revengeful? 

In  1905  a  man  by  the  name  of  E.  G.  Lewis  was  carrying  on,  in  the 
city  of  St.  Louis,  a  business  known  as  the  People's  United  States  Bank. 
*  *  *  A  fraud  order  was  issued  against  both  the  corporation  and  Lewis. 
All  letters  thereafter  addressed  to  him,  personally,  were  returned  with  the 
usual  word  "fraudulent"  stamped  thereon.  A  letter  from  his  wife,  from 
his  attorney,  from  any  close  friend  in  any  part  of  the  world,  would  have 
been  thus  stamped  and  returned.  This  order  actually  shut  him  off  from 
any  intercourse  through  the  mails  with  any  human  being,  and  apparently 
for  all  time. 

Mr.  Cortelyou  says  in  a  recent  review  article  about  such  cases:  "Com- 
paratively little  direct  evidence  can  be  brought  into  court  against  the 
majority  of  these  fraudulent  operators."  He  adds  that  it  is  very  difficult 
to  find  evidence  which  will  insure  their  conviction.  We  are  also  assured  by 
him  *  *  ♦  that  "the  Postoffice  Department  of  the  United  States  is  the  most 
effective  agency  in  the  world  for  the  detection  and  prevention  of  crime 
and  the  apprehension  of  the  criminal."  Now,  what  have  we?  The  most 
effective  agency  in  the  world  for  the  detection  of  crime  is  able  to  obtain 
little  evidence  against  those  it  accuses.  Yet  it  has  issued,  since  the  enact- 
ment of  the  present  legislation,  two  thousand  four  hundred  fraud  orders. 
I  am  credibly  informed  that  in  the  case  of  Mr.  Lewis  and  his  People's 
United  States  Bank,  upon  liquidation  by  the  receiver,  it  paid  one  hundred 
cents  on  the  dollar,  with  interest  in  full,  to  creditors,  together  with  divi- 
dends to  the  stockholders  of  eighty-five  per  cent. 

In  the  second  session  of  the  Fifty-ninth  Congress  a  bill  was  introduced 
into  the  House  of  Representatives  providing  that  the  mail  addressed  to 
the  person  or  firm  against  whom  the  fraud  order  is  issued,  instead  of 
being  stamped  "fraudulent"  and  returned  at  once  to  the  senders,  should 
be  held  in  the  postoffice  for  fifteen  days.  In  that  period  the  business 
concern  was  permitted  to  institute  an  action  in  the  United  States  Circuit 
Court,  on  giving  a  bond  to  pay  the  entire  costs  of  the  action  in  case  the 
fraud  order  was  finally  held  to  be  valid.  This  bill  passed  the  House  with- 
out a  division,  but  failed  to  pass  the  Senate.* 

This  was  the  Crumpacker  bill,  inspired  by  the  agitation  over  the 
fraud  order  against  the  People's  Bank,  and  done  to  death  in  the 
Judiciary  Committee  of  the  Senate  by  the  influence  of  the  Adminis- 
tration. The  efforts  of  Lewis  and  his  associates  to  pass  this  meas- 
ure excited  the  wrath  of  Cortelyou.  Despite  his  denials,  the  pas- 
sage of  that  measure  through  the  House  was  believed,  by  Lewis'  rep- 


*See  page   361    in  the   volume,   "Federal    Usurpation,"   by   Franklin   Pierce,   of  the 
New  York  bar.     Published  by  D.   Applrton  &   Co.,   New  York. 

C30 


Official  groups  taken  at  the  first  convention  of  the  American  IVoman's  League,  June, 
igio 

^Presidents  of  Local  Chapters  "Jl'inncrs  of  the  Diamond  Emblem  ^Delegates  of 
Local  Chapters 


Floats  from  the  grand  parade  at  the  Fete  Champetre  under  the  direction  of  George 
Julian  Zolnay  at  the  American    JVoman's  League  Convention,  June,  IQIO 
'Emblem    of    the    American    IVoinan's    League     -Painting     ''Sculpture 


THE  DREYFUS  CASE  OF  AMERICA  633 

resentatives  at  Washington,  to  have  been  potent  in  causing  Cortel- 
you  to  exclude  Lewis'  publications  from  the  mails.  We  have  now 
to  trace  the  progress  of  that  agitation  from  July,  1905,  when  the 
fraud  order  became  effective,  to  the  withdrawal  of  the  second-class 
entry  from  the  Lewis  publications,  on  March  4,  1907. 

Despite  the  crippled  condition  of  his  enterprises,  Lewis  still 
possessed  the  confidence  and  sympathy  of  the  community  of  St. 
Louis  as  a  whole,  and  that  of  the  majority  of  his  readers.  Thus 
fortified  by  public  sentiment,  he  devoted  the  last  half  of  1905  and 
the  whole  of  190G  to  a  ceaseless  effort  to  arouse  the  sympathies  and 
secure  the  co-operation  of  the  people  in  his  campaign  against  bu- 
reaucratic abuses. 

THE    GOODWIN    BROS. 

Lewis  was  warned  that  he  could  gain  nothing  by  fighting  the 
Government  in  the  Federal  Courts,  but  that,  if  the  right  people 
were  "seen,"  it  might  be  possible  to  have  the  fraud  order  lifted. 
There  is  nothing  to  show  that  Lewis  or  his  associates  were  influ- 
enced by  these  reports  or  the  advice  they  contained,  or  that  they 
sought  in  any  way  to  act  upon  the  thinly-veiled  suggestion.  The 
fight  of  the  bank  against  the  fraud  order  was  waged  in  the  open. 
The  only  attempt  made  by  Lewis,  or  others  in  his  behalf,  to  get 
into  touch  with  the  underground  influences,  apparently  at  work  be- 
hind the  fraud  order,  was  to  expose  and  uncover  them.  The  ren- 
dezvous of  the  alleged  "camp-followers"  appeared  to  be  at  and  near 
Chicago.  Hence,  at  the  suggestion  of  Major  Kramer,  a  Chicago 
attorney  was  engaged  to  investigate  and  run  down  certain  of  these 
rumors.  To  aid  in  the  investigation  of  clews  which  had  been  sup- 
plied, this  attorney  laid  the  case  before  the  Pinkerton  Detective 
Agency  at  Chicago  and  employed  a  number  of  its  operatives.  Clews 
thus  followed  were  thought  to  suggest  the  existence  of  an  organized 
traffic  in  fraud  orders,  conducted  by  Goodwin,  the  assistant  attor- 
ney-general for  the  Postoffice  Department  at  Washington,  and  his 
brother,  Leonard  Goodwin,  of  Chicago.  This  line  of  inquiry  was 
followed  by  the  Pinkertons  during  the  summer  and  early  fall  of 
1905.  Then  the  unexpected  happened.  In  October  of  that  year  a 
letter  reached  Lewis  from  Thomas  F.  Adkins,  of  855  Main  street. 
East  Rochester,  N.  Y.  It  suggested  that  Leonard  Goodwin  be  re- 
tained in  behalf  of  the  People's  Bank.  This  is  Lewis'  statement, 
in  substance,  to  the  Ashbrook  Committee: 

Early  in  the  fight  I  received  a  letter  from  a  business  man  in  Rochester, 
N.  Y.,  saying  that,  as  the  writer  understood  we  were  under  investigation 
by  the  Postoffice  Department,  he  advised  me  to  engage  the  services  of  a 
very  eminent  attorney  in  Chicago,  who  had  a  large  experience  in  P'ederal 
cases.  The  name  of  this  attorney  was  Leonard  Goodwin.  I  thought  I 
smelled  a  mouse.  The  writer  of  this  letter  was  a  man  named  Adkins.  He 
told  me  about  a  year  later  that  Goodwin  wrote  the  letter  and  asked  him 
to  sign  it.  He  stated  that  he  had  done  the  same  thing  for  Goodwin  on 
several  previous  occasions.  I  wrote  to  Mr.  Goodwin,  asking  him  to  call 
at  the  offices  of  the  Royal  Trust  Company  and  make  careful  inquiries 
regarding  us.     I  told  him  a  very  great  outrage  had  been  committed.     I 


634  THE  SIEGE  OF  UNIVERSITY  CITY 

insisted  that  we  wanted  him  to  be  satisfied  we  were  perfectlj'  honest. 
He  did  not  wait  for  more,  but  came  to  see  us  in  a  hurry.  I  had  a  long 
interview  with  him.  He  stated  that  he  had  handled  a  great  many  hun- 
dreds of  similar  cases  all  over  the  United  States.  He  admitted  that  he 
then  had  quite  a  number  of  them  on  hand.  He  was  confident  he  could  be 
of  great  service  to  us.  He  stated  that  he  was  a  brother  of  Judge  Goodwin. 
He  was  very  insistent  that  we  engage  him. 

I  said  I  could  not  decide  the  matter  then,  and  told  him  to  go  back  to 
Chicago  and  write  me  a  letter,  stating  what  his  fee  would  be.  He  did  so, 
naming  a  preliminary  fee  of  one  thousand  dollars.  He  wrote  several 
more  letters,  urging  that  he  be  employed.  I  suggested  to  the  Pinkertons 
that  they  investigate.  I  wanted  to  get  at  the  very  bottom  of  it.  They 
advertised  in  the  Law  Journal:  "Wanted — Desk  room  in  a  law  oflBce." 
About  two  weeks  later  they  had  a  reply  from  Leonard  Goodwin,  saying 
he  had  office  or  desk  room  to  rent.  A  Pinkerton  man  went  over  there  and 
engaged  desk  room.  They  put  a  man  in  there  to  get  well  acquainted  with 
Mr.  Goodwin  and  see  what  was  going  on.  Our  investigation  disclosed  the 
fact  that  this  traffic  extended  from  one  end  of  the  country  to  the  other. 
The  usual  fee  was  from  five  hundred  to  five  thousand  dollars.  I  mean  that 
if  the  victim  of  a  fraud  order  would  pay  the  price,  according  to  what  th«; 
job  was  worth  to  him,  Leonard  Goodwin's  promise  was  that  there  would  be 
no  further  proceedings  on  the  part  of  the  inspectors  of  the  Department 
against  that  particular  business,  no  matter  what  it  might  be. 

Finally,  former  Governor  Stephens,  myself  and  several  others  went  to 
Washington  to  lay  the  whole  matter  before  Mr.  Cortelyou.  When  we 
reached  Washington,  and  almost  before  we  got  into  our  rooms,  the  chief 
postoffice  inspector  at  Chicago,  or  his  first  assistant,  came  into  the  room. 
He  told  us  he  iinderstood  we  were  there  on  the  Goodwin  matter.  He  said 
he  was  on  the  same  mission  himself,  and  that  he  had  an  appointment  with 
Mr.  Cortelyou  at  two  o'clock.  He  said  it  was  the  most  damnable  thing 
ever  unearthed  in  the  Postoffice  Department.  If  we  would  turn  over  to 
him  our  evidence  and  information  he  would  lay  it  before  Mr.  Cortelyou 
and  handle  the  whole  thing  as  one  proposition.  He  came  back  later  in  the 
day  and  said  that,  after  an  interview  of  several  hours,  Mr.  Cortelyou  had 
pronounced  it  the  worst  thing  that  had  ever  come  before  him.  He  further 
stated  that  before  we  reached  St.  Louis  there  would  be  the  worst  explosion 
we  had  ever  heard.    We  have  been  listening  ever  since. 

THE   LEWIS  CASE  IN   CONGRESS. 

Further  investigations  on  the  part  of  Lewis'  attorney  at  Chicago, 
with  the  assistance  of  Pinkerton  operatives,  led  to  the  report  that 
the  activities  of  Leonard  Goodwin  in  cases  of  this  sort  were  under 
investigation  by  the  Department  at  Washington.  It  was  afterward 
reported  that  Goodwin  had  been  requested  by  the  authorities  to 
desist.  Russell  P.  Goodwin  indignantly  repudiated,  under  oath, 
before  the  congressional  committee,  any  connection  whatever  with 
his  brother's  activities.  No  evidence  directly  connecting  the  two 
brothers,  and  thus  officially  substantiating  the  existence  of  a  traffic 
in  fraud  orders,  was  brought  out.  The  postmaster-general  testified, 
liowever,  that  an  investigation  of  the  charges  of  Lewis  against 
Leonard  Goodwin  had  been  conducted  by  the  postoffice.  Lewis' 
cliarges  of  the  existence  of  tliis  traffic  in  fraud  orders  between  the 
Goodwin  brothers  may  be  fairly  summed  up  by  the  Scotch  verdict, 
"not  proven."  The  grounds  upon  which  his  suspicions  existed  have 
been  stated,  and  the  reader  may  draw  his  own  inferences. 

The  debut  of  the  T-ewis  case  on  the  floor  of  Congress  is  thus  men- 
tioned by  the  St.  Louis  Star-Chronicle  of  December  15,  1905,  as 


THE  DREYFUS  CASE  OF  AMERICA  635 

quoted  in  Printer's  Ink,  the  foremost  trade  journal  of  the  publish- 
ing industry,  under  the  heading,  "Fair  Trial  For  Lewis  Is  Asked 
of  Congress:  Petition  from  Ohioans,  presented  by  Representative 
Thomas": 

A  petition  asking  Congress  to  intercede  for  E.  G.  Lewis,  president  of 
the  People's  United  States  Bank,  recently  indicted  by  the  Federal  grand 
jury  here,  and  to  see  that  he  gets  a  "fair  trial,"  was  submitted  in  the 
House  of  Representatives  Thursday  by  Representative  Thomas  of  the 
Nineteenth  Ohio  district,  according  to  a  dispatch  from  Washington.  The 
document,  which  is  regarded  as  a  rather  curious  one,  was  signed  by 
several  hundred  of  Congressman  Thomas'  constituents. 

The  effect  of  this  petition  was  to  suggest  other  attempts  to  get 
the  matter  before  Congress.  The  first  took  the  form  of  the  fol- 
lowing resoluion  by  Representative  Philip  P.  Campbell  of  Kansas, 
introduced  under  date  of  February  6: 

Resolved,  That  the  Committee  on  PostofEce  and  Post  Roads  be  requested 
to  inquire  into  the  fraud  order  issued  on  the  People's  United  States 
Bank  at  St.  Louis,  and  report  to  Congress  on  the  following  points:  Were 
the  officers  and  agents  of  the  bank  given  an  opportunity  to  make  a  show- 
ing of  their  business  methods  prior  to  the  issuance  of  said  order?  Was 
the  order  issued,  in  all  respects,  in  accordance  with  the  laws  of  the  United 
States  governing  issuance  of  fraud  orders?  Did  it  make  such  recom- 
mendations as  to  reversal  of  such  fraud  order,  if  any,  as  in  the  judgment 
of  the  committee  the  circumstances  may  justify?  Was  it  suggestive  of 
any  amendment  deemed  wise  to  the  laws  of  the  United  States  relative  to 
the  issuance  of  fraud  orders? 

Lewis  seems  to  have  believed  the  Campbell  resolution  the  best 
that  could  be  urged,  under  the  circumstances,  and  that  he  might 
better  assume  the  risk  of  an  official  white-washing  of  the  post- 
master-general than  submit  to  inaction.  He  opened  a  brisk  fire 
of  correspondence  upon  members  of  Congress  of  his  acquaintance, 
especially  the  representatives  of  his  own  State  of  Missouri,  request- 
ing them  to  support  this  resolution.  In  view  of  recent  develop- 
ments, the  following  communication  to  Lewis  from  Congressman 
Champ  Clark,  under  date  of  February  26,  1906,  is  of  especial  in- 
terest: 

I  have  your's  of  the  21st.  I  have  become  convinced  that  you  and  your 
bank  were  treated  very  badly,  and  it  will  give  me  pleasure  to  support  the 
resolution  for  an  investigation,  unless  the  resolution  is  so  amended  and 
distorted  as  to  be  unworthy  of  support.  You  have  done  a  wonderful  work 
in  the  upbuilding  of  your  publications,  and  I  wish  you  all  success.  I 
hope  that  your  efforts  for  an  investigation  will  be  fruitful. 

ALEXANDER  DEL  MAr's  REPORT. 

Later,  on  March  3.  Mr.  Clark  again  wrote  Lewis,  congratulating 
him  on  the  fact  that  the  resolution  was  favorably  reported  to  the 
House.  He  expressed  the  opinion  that  it  would  pass.  He  stated, 
after  an  interview  with  Congressman  Campbell,  that  he  believed 
the  committee  would  grant  a  hearing.  Just  in  the  nick  of  time, 
Alexander  Del  Mar's  report  came  out,  supported  by  his  trilogy  of 
editorials  in  the  American  Banker.  Lewis  supplied  his  champions 
with  this  fresh  ammunition.  The  result  was  another  round  of  let- 
ters to  members  of  Congress,  enclosing  copies  of,  or  making  allu- 


636  THE  SIEGE  OF  UNIVERSITY  CITY 

sions  to,  this  document.  As  the  investigation  of  Mr.  Del  Mar  be- 
came one  of  the  turning  points  of  the  Siege,  we  must  retrace  our 
steps  for  a  moment  to  see  what  it  was  and  how  it  chanced  to  come 
about.  Lewis'  attention  appears  to  have  been  drawn  by  one  of  the 
stockholders  of  the  People's  Bank  to  Del  Mar  as  being  a  suitable 
person  to  make  an  examination  of  its  affairs.  Del  Mar  was  at  this 
time  editor  of  the  American  Banker,  and  of  the  Cambridge  Encyclo- 
pedia. He  was  also  a  frequent  contributor  to  the  Bankers'  Maga- 
zine, the  Wall  Street  Journal  and  similar  publications.  He  had 
formerly  been  director  of  the  Bureau  of  Statistics  of  the  United 
States  at  Washington,  and  in  that  capacity  was  personally  known 
both  to  President  Roosevelt  and  Mr.  Cortelyou.  Del  Mar's  works, 
"A  History  of  the  Precious  Metals,"  "A  History  of  Money  and 
the  JNIonetary  Systems  of  Various  States,"  "The  Science  of  Money," 
and  others,  had  made  him  an  international  reputation  as  an  author- 
ity on  financial  affairs.  His  fame  was  supplemented  by  his 
American  reputation  as  an  expert  mathematician,  statistician  and 
accountant.  Del  Mar  thus  had  at  stake  a  reputation  far  greater 
than  that  of  an  ordinary  professional  accountant. 

Pursuant  to  Lewis'  invitation,  Del  Mar  visited  St.  Louis  in  Jan- 
uary, 1906.  He  was  furnished  every  facility  he  desired  to  con- 
duct an  exhaustive  inquiry.  He  was  given  full  access  to  the  books 
of  both  the  bank  and  the  Lewis  Publishing  Company,  and  made 
such  examination  of  these  as  he  saw  fit.  On  his  return  to  New 
York,  and  while  his  report  was  in  preparation,  he  wrote  a  series 
of  three  articles  wiiich  appeared  editorially  in  the  American  Banker. 
These  arrested  the  attention  of  the  entire  banking  fraternity. 

The  third  and  concluding  editorial  of  this  trilogy  takes  up  the 
special  case  of  the  People's  Bank.  So  trenchant  is  this  review  that 
it  merits  reproduction.     It  is  as  follows: 

THE    people's    BAXK. 

Before  taking  up  the  strange  story  of  the  People's  United  States  Bank  of 
St.  Louis — for  that  is  the  name  of  it — we  took  the  pains  to  inquire  con- 
cerning the  personal  character  of  its  executive  officers  and  board  of 
directors.  Upon  this  head,  the  replies  were  most  satisfactory.  The 
president  was  a  gentleman  of  honorable  reputation  and  liberal  fortune, 
his  reputed  annual  income  from  sources  wholly  imconnected  with  the 
bank  being  upwards  of  a  quarter  of  a  million  dollars.  The  cashier  was 
an  experienced  and  prudent  official,  with  an  excellent  record  from  a 
leading  Chicago  bank.  The  board  of  directors  included  some  of  the  best- 
known  and  wealthiest  merchants  of  St.  Lotus  and  other  near-by  cities. 
Among  its  stockholders  were  between  two  and  three  thousand  officers 
and  directors  of  other  banks,  all  of  whom  had  subscribed  to  the  utmost 
amount   permitted    them. 

The  next  inquiry  was  with  regard  to  the  solvency  of  the  bank.  Upon 
this  head,  too,  the  reply  was  entirely  satisfactory.  It  had  a  capital  of  two 
and  a  half  millions,  all  ])aid  in;  while  an  additional  sum  of  two  and  a 
half  millions  was  underwritten  and  in  course  of  being  accepted  and 
allotted,  when  the  liank  was  closed  by  the  postoffice  officials  and  the 
secretary  of  state.  With  regard  to  its  loans,  two  of  which  were  called  in 
question  by  the  officials,  these  were  made  upon  securities  so  superfluously 
ample  that  the  sale  of  one-fourth  of  tlien)  sufficed  to  pay  off  one  loan,  and 
of  one-eighth  the  other,  botli  of  thorn  with  interest.     All  other  loans  and 


^Crowds  pouring  from  the  Woman's  Magazine  Building  during  the  first  cotivention 
of  the  American  Woman's  League,  June,  iqio  "Opening  session  of  the  Convention 
addressed  by  representatives  of  the  "Class  A"  Publishers 

No  similar  gathering  of  women  organized  for  co-operative  industrial  enterprise  was 
ever  assembled 


<c  2 


b,0 


THE  DREYFUS  CASE  OF  AMERICA  639 

investments  have  since  been  liquidated  in  full.  The  deposits  have  all 
been  paid  in  full  and  the  stockholders  have  already  received  back  eighty- 
five  per  cent  of  their  money  and,  as  has  been  publicly  promised  by  the 
president,  will  soon  receive  fifteen  per  cent  more.  But  for  the  enormous 
expense  of  the  two  State  receiverships  and  the  tremendous  loss  of  money 
and  credit  occasioned  by  the  postoffice  lioldupship,  visited  upon  this  un- 
oflfending  and  unhappy  bank,  it  evidently  could  have  paid  the  stockholders 
in  full,  without  invoking  the  generous  aid  of  its  president,  and  it  may 
even  do  so  yet.  There  never  was  a  more  solvent  bank  than  this  one,  when 
it  was  held  up,  and  the  proof,  the  irrefutable  proof,  of  it  is  contained  in 
the  following  certificate  from  the  receiver: 

"St.  Louis,  Mo.,  February  5,  1906. 
"Editor  American  Banker. 

"Sir:  In  reply  to  your  inquiry,  I  beg  to  state  that  every  loan  and 
investment  held  by  the  People's  United  States  Bank  has  been  liquidated 
at  one  hundred  per  cent  on  the  dollar,  with  interest  in  full  to  date.  I 
have  already  declared  dividends  to  the  stockholders  of  eighty-five  per  cent. 

"Respectfully, 

"Frederick   Essek, 
"Receiver  People's  United  States  Bank,  St.  Louis,  Mo." 

When  the  question  is  asked  why  such  a  bank  should  have  been  selected 
upon  which  to  vent  the  full  fury  of  that  sinister  and  dangerous  power 
with  which  Congress  has  unwittingly  invested  the  postoffice  officials,  it 
becomes  necessary  to  describe  the  peculiar  character  of  the  bank  and  the 
novel  features  of  its  transactions. 

The  People's  Bank  w^as  a  mail  order  bank.  It  was  a  novelty,  built  upon 
three  other  novelties.  The  first  of  these  is  the  second-class  postage  system 
inaugurated  by  Congress;  the  second,  the  system  of  rural  free  delivery, 
promoted  by  the  Postoffice  Department;  and  the  third,  the  mail  order 
system  which  grew  out  of  the  former.  The  inevitable  result  of  this  evolu- 
tion was  a  mail  order  bank,  whose  business,  being  done  entirely  by  mail, 
placed  it  beyond  the  fear  of  a  run,  but  at  the  same  time  exposed  it 
absolutely  to  the  discretion  or  mercy  of  officials  who  knew  nothing  of  one 
and  scorned  the  other. 

In  order  to  serve  the  great  mail  order  houses,  some  of  which  sell  goods 
to  the  amount  of  fifty  millions  a  year,  the  People's  Bank  oifered  to  sell 
domestic  exchange  up  to  a  limit  of  $10.00  without  charge.  This  was  a 
perfectly  honorable  and  safe  business,  the  profit  from  interest  affording 
full  compensation  for  the  trouble  involved. 

And  in  order  to  serve  the  rural  population,  comprising  its  most  numer- 
ous correspondents,  both  as  stockholders,  depositors  and  inquirers,  the 
bank  opened  a  Mont  di  Piet§,  or  a  bureau  of  loans  upon  pledges  at  eight 
per  cent  per  annum,  similar  to  the  very  excellent  institutions  by  the  same 
name  long  established  in  Italy  and  France.  This  was  also  an  honorable, 
safe  and  profitable  business,  and  a  great  convenience  to  the  poor  and  even 
to  those  well-to-do  persons  who  may  be  in  want  of  a  temporary  loan,  but 
live  too  far  away  from  the  professional  "uncle"  to  make  use  of  his 
generous  assistance.  *  *  * 

Ex-Postmaster-General  Wannamaker  is  credited  with  the  observation 
that  there  were  five  constant  obstacles  to  the  establishment  of  a  parcels 
post  in  the  United  States,  and,  he  might  have  added,  to  the  establishment 
of  a  mail  order  bank.  It  is,  therefore,  up  to  these  concerns  (the  five  great 
express  companies)  to  prove  that  they  had  nothing  to  do  with  the  uncalled- 
for  and  savage  attack  upon  a  perfectly  solvent  and  well  ordered  concern. 
Their  silence  on  the  subject  will  be  significant.  Their  disavowal  will  largely 
interest  the  banking  fraternity  throughout  the  country.  For  it  may  be 
depended  upon  that  the  profitable  path  thus  opened  by  the  People's  Bank 
will  not  fail  to  be  pursued  by  others.  Mail  order  banks  are  a  necessity 
of  the  times;  and  the  express  lobby — if  the  express  lobby  it  is — though  it 
may  have  succeeded  in  this  instance,  can  never  hope  to  win  another  victory. 


640  THE  SIEGE  OF  UNIVERSITY  CITY 

The  pnblicalion  of  these  editorial  utterances,  in  one  of  the  most 
influential  financial  journals  in  the  United  States,  had  instant 
effect.  Their  influence  was  driven  home  by  Del  Mar's  full  report. 
This  was  issued  by  Lewis  in  a  pamphlet  of  some  twenty-four  pages 
and  publicly  distributed.  Mr.  Del  Mar  introduced  his  remarks  in 
the  following  open  letter,  under  date  of  January   18,  1906: 

The  following  report  on  the  history  and  condition  of  the  People's  Bank 
is  made  in  response  to  an  invitation  extended  by  some  of  its  stockholders 
to  me,  as  an  expert  accountant  and  financial  writer,  to  examine  into  its 
affairs.  For  this  purpose,  everything  was  thrown  open  by  the  officials  of 
the  bank  to  my  inspection,  including  the  books  of  account,  vouchers  and 
correspondence.  I  have  taken  into  consideration  and  replied  to  every 
charge  or  accusation  of  an  explicit  character,  the  charges  contained  in 
that  portion  of  the  inspectors'  report  which  appeared  in  the  St.  Louis 
papers,  the  charges  brought  forward  at  Washington  and  given  to  the 
press  in  Mr.  Goodwin's  book,  the  charges  alluded  to  in  Judge  McPherson's 
decision,  and  those  summarized  by  the  counsel  in  the  ease.  If  there  are 
any  other  charges,  I  shall  be  happy  to  reply  to  them. 

As  the  result  of  this  examination,  which  has  been  carefully  made,  I  am 
satisfied  that  the  People's  Bank,  however  original  its  method  of  promotion, 
or  however  novel  its  features  and  plan  of  working,  was  an  honestly  de- 
signed and  an  honestly  conducted  institution,  and  one  which,  had  it  not 
been  disturbed,  would  have  proved  profitable  to  its  stockholders  and 
depositors,  and  even  beneficial  to  the  country  at  large.  It  would  have 
increased  the  revenues  of  the  Postoffice  Department,  provided  a  safe  and 
expenseless  money  order  system  and  afforded  facilities  to  the  multitude 
for  obtaining  small  loans  of  money  upon  pledges.  I  am  constrained  to  add 
that  the  dates  and  other  details  of  the  attacks  made  upon  it  by  the 
several  parties  indicated  point  to  a  concerted  effort,  originating  in  trade 
rivalry  and  embittered  by  malice. 

The  intent  of  Congress  in  empowering  the  postmaster-general  to  issue 
fraud  orders  in  certain  cases  has  been  perverted  in  this  case  and  made  to 
subserve  other  ends  than  that  for  which  it  was  designed.  The  oflRce  of 
the  state  superintendent  of  banks  has  been  usurped  by  local  postoffice  in- 
spectors and  their  usurpations  have  been  employed  to  ruin  a  meritorious 
enterprise  and  destroy  the  resources  and  credit  of  an  innocent  man.  The 
postmaster-general  has  been  imposed  upon  to  the  extent  of  inducing  him 
to  issue  warning  circulars,  concerning  a  case  which  has  never  been  tried 
before  a  court  of  law.  The  whole  story  is  one  of  shameful  intrigue  and 
persecution,  one  that  should  have  been  impossible  in  a  free  country,  and 
one  that,  when  fully  digested,  can  scarcely  fail  to  weaken  that  confidence 
in  the  security  of  our  laws  and  institutions,  upon  which  our  commercial 
affairs  have  hitherto  reposed. 

I  can  see  but  one  proper  course  to  be  pursued  in  reference  to  the  matter. 
The  fraud  order  should  be  revoked. 

Alex.  Det,  Mah, 
Formerly  Director  of  the  Bureau  of  Commerce,  Navigation  and  Statistics, 

United   States  Treasury  Department;  Editor  of  the  American  Banker, 

New  York. 

Copies  of  this  sledge-hammer  arraignment  of  the  Postoffice  De- 
partment were  sent  to  all  members  of  Congress.  It  was  also  given 
to  the  general  public  through  the  press.  The  immediate  result 
was  the  introduction  into  Congress  of  two  additional  resolutions  by 
Representatives  Foster  and  Crumpacker,  and  of  a  bill  by  Congress- 
man Goebel,  for  the  modification  of  the  fraud  order  law.  Mean- 
while, Mr.  Del  Mar  tendered  his  good  offices,  as  a  friend  of  both, 
to  bring  about  a  personal  interview  between  Lewis  and  the  post- 


THE  DREYFUS  CASE  OF  AMERICA  641 

master-general.  In  the  belief  that  the  latter  had  been  imposed 
upon,  he  hoped  Cortelyou  would  be  entirely  willing  to  revoke  the 
fraud  order,  once  the  true  state  of  facts  was  brought  clearly  to  his 
attention.  He  proposed,  therefore,  to  wait  upon  the  postmaster- 
general  at  Washington  for  a  preliminary  interview  looking  to  such 
an  appointment.    In  a  letter  to  Mv.  Lewis,  Mr.  Del  Mar  says: 

I  am  constantly  receiving  commendatory  letters  on  my  editorials  in  the 
American  Banker,  from  which  I  glean  the  inference  that  the  censorship 
employed  by  the  underlings  in  the  postoffice  is  far  more  destructive  than 
has  hitherto  been  suspected.  The  subject  is  awakening  attention  in  many 
parts  of  the  country.  Today's  news  announces  that  the  postmaster-general's 
brother  is  a  postoffice  inspector,  and  active  in  prosecuting  banks  and 
trust  companies  under  the  infamous  censorial  law,  and  that  to  the  extent 
of  arresting  and  handcuffing  persons  charged  with  violating  its  provisions. 
I  am  at  a  loss  to  discover  any  lawful  authority  for  all  this,  but  presimie 
it  is  obtained  by  co-operation  with  Ne\y  Jersey  officials. 

The  interest  aroused  by  the  Campbell  resolution  and  the  Goebel 
bill  was  further  excited  b}'  the  introduction  in  the  House  on  Febru- 
ary 23,  of  Resolution  3il,  by  Mr.  Crumpacker  of  Indiana,  as 
follows: 

Resolved,  That  the  postmaster-general  be  requested,  if  not  incompatible 
with  the  public  interests,  to  furnish  the  House  of  Representatives  at  as 
early  a  date  as  practicable,  a  full  statement  of  the  facts,  including  copies 
of  affidavits,  papers,  reports  of  inspectors  and  other  officers  under  his 
control,  bearing  upon  the  order  made  by  him  withholding  the  rights  and 
privileges  of  the  mails  from  the  People's  United  States  Bank  at  St.  Louis, 
Mo. 

The  day  on  which  the  Crumpacker  resolution  was  introduced  was 
further  signalized  by  the  introduction  of  the  Foster  bill,  evidently 
put  forward  as  a  substitute  for  the  Goebel  measure. 

THE  DAN  LEWIS  EPISODE. 

Lewis,  at  this  stage,  followed  up  the  statement  of  Del  Mar  by 
a  little  eight-page  pamphlet  on  the  subject  of  "The  Workings  of 
the  Modern  Censorship,  As  Found  Exclusively  in  America,  It  Hav- 
ing Gone  Out  of  Date  in  Russia,  Turkey  and  Spain."  This  pam- 
phlet is  devoted  to  the  case  of  Dan  Lewis,  which  may  be  taken  aS 
typical  of  the  abuses  to  which  a  power  so  arbitrary  as  that  of  the 
fraud  order  is  liable.  As  this  episode  crystallized  public  sentiment 
for  a  congressional  inquiry  and  served  to  bring  it  vividly  to  the 
consciousness  of  every  member  of  Congress,  it  may  be  briefly  sum- 
marized from  the  text  of  this  booklet,  as  follows: 

Dan  Lewis,  a  banker  of  Carlisle,  Ark.,  was  a  stockholder  of  the  Peo- 
ple's Bank.  He  was  not  a  relative  of  E.  G.  Lewis,  nor  were  the  two  men 
known  to  each  other,  except  by  correspondence.  He  and  his  family  invested 
a  total  of  $3,500  in  the  bank.  This  they  afterwards  transferred  to  the 
preferred  stock  of  the  Lewis  Publishing  Company.  Dan  Lewis,  being  a 
skillful  and  effective  letter  writer,  took  up  the  cause  of  E.  G.  Lewis  and 
the  People's  Bank  in  numerous  terse,  well-phrased  personal  letters  of 
protest,  addressed  to  influential  persons.  For  some  weeks  he  kept  up  a 
hot  fire  of  this  sort  of  sharpshooting.  The  cost  in  time  and  postage, 
besides  the  constant  effort  required,  began  to  tell  upon  him.  Yet  he  did 
not  like  to  quit,  because  he  felt  that  his  correspondence  was  having  effect. 
At  this  stage  he  appealed  to  E.  G.  Lewis,  saying  he  wanted  to  send  a 
letter  to  every  member  of  Congress,  many  of  whom  he  knew  personally. 


642  THE  SIEGE  OF  UNIVERSITY  CITY 

He  understook  to  write  a  letter  embodying  his  own  views  if  Lewis  would 
have  it  gotten  up  by  some  sort  of  duplicating  process,  and  forwarded  to 
him  at  Carlisle.  He  proposed  to  address  each  letter  personally  and  mail 
them  from  his  home  town.  All  this  was  done.  The  letter  was  reproduced 
at  St.  Louis  exactly  as  written  by  Dan  Lewis,  without  suggestion  or  alter- 
ation. Postage  stamps  were  affixed  to  the  envelopes  at  St.  Louis.  The 
letters  and  envelopes  were  then  forwarded  to  Dan  Lewis  at  Carlisle,  to  be 
looked  over,  signed  and  sent  out.  They  were  mailed  by  him  in  due  course 
to  the  various  members  of  Congress.  Shortly  afterwards  Lewis  received 
word  through  a  friend  that  Postoffice  Inspector  W.  L.  Reid  had  gone  from 
St.  Louis  "to  Carlisle,  Ark.,  had  called  on  Mr.  Dan  Lewis,  and  had 
threatened  him  with  a  fraud  order  unless  he  ceased  to  urge  a  congres- 
sional inquiry  of  the  fraud  order  against  the  People's  Bank.  Lewis  re- 
ported the  case  to  the  attorneys  of  the  bank.  They  took  it  up  with  Dan 
Lewis  and  requested  that  he  furnish  an  affidavit  of  the  facts.  In  response 
he  wrote  to  E.  G.  Lewis,  in  substance,  as  follows: 

"On  February  23  my  wife  and  little  girl  were,  and  had  been,  sick  with 
fever.  That  morning  my  wife  was  a  little  better.  Slie  was  able  to  sit  up 
for  a  while  in  a  rocking  chair.  I  hurried  down  to  the  depot  to  attend  to 
some  business,  expecting  to  come  back  by  the  postoffice  to  get  my  mail, 
and  hasten  home  to  my  sick  people.  I  was  expecting  the  doctor  soon. 
While  I  was  at  the  depot  a  postoffice  inspector  came  in  with  our  local 
postmaster.  He  asked  the  express  agent  to  look  over  his  books  and  see 
about  the  box  of  stationery  you  had  sent  to  me.  I  would  like  to  ask  right 
here,  Has  an  express  agent  a  right  to  give  out  such  information  about 
other  people's  business? 

"I  then  came  back  past  the  postoffice.  As  I  stepped  in  to  get  my  mail 
I  saw  the  inspector  in  the  back  part  of  the  room.  He  motioned  for  me 
to  come  back  there.  As  I  went  back  he  said:  'Mr.  Lewis,  I  believe?  I  am 
a  postoffice  inspector.'  He  showed  me  one  of  my  letters  and  asked,  in  a 
low,  gruff  voice:  'Did  you  send  this?'  He  did  not  let  me  see  the  address 
on  the  letter,  so  I  did  not  know  to  whom  it  was  addressed,  or  where  he 
got  it.  I  said,  'I  don't  know.'  He  said,  'Don't  know?  It's  got  your  name 
to  it.'  I  said,  'I  guess  I  sent  it,  then.  What  is  wrong  about  it?'  He 
replied,  'You  didn't  buy  the  stamps  here.  These  letters  were  sent  to  you 
from  St.  Louis.  There  were  about  four  hundred  and  seventy-five  of  them. 
You  had  no  right  to  buy  the  stamps  in  St.  Louis  and  mail  the  letters 
here.'  I  said,  'That  is  strange.  I  often  receive  stamps  in  letters  and 
stamped  envelopes  for  return  reply.  Those  stamps  were  bought  else- 
where, but  I  mail  my  letters  here.*  He  said,  'You  can  be  arrested  for 
defrauding  the  Government.  These  letters  should  have  been  mailed  in 
St.  Louis,  where  the  cancellation  of  the  stamps  would  have  cost  the  Gov- 
ernment nothing.'  He  also  said,  'E.  G.  Lewis  must  have  written  to  you 
about  these  things.'  I  told  him  that  I  had  received  letters  from  Mr. 
Lewis.  He  then  said,  'By  corresponding  with  E.  G.  Lewis  you  become 
an  accessory.  You  might'  get  a  fraud  order  against  yourself.  _  The  best 
thing  you  can  do,  if  you  wish  to  save  yourself  a  lot  of  trouble,  is  to  make 
a  clean  statement  of  this  whole  letter  business.'  T  told  him  that  my 
folks  were  sick  and  that  I  had  to  go  home,  and  he  replied  that  he  would 
prepare  a  statement  at  the  postoffice  and  bring  it  up  to  my  house  to  sign. 
In  less  than  an  hour  he  came  to  my  house  with  a  statement  for  me  to  sign. 
He  wanted  to  make  it  appear  that  I  was  a  mere  tool — a  poor,  innocent 
fool  whom  you  were  using  away  down  here  in  Arkansas  to  do  your  dirty 
work.  I  wouldn't  sign  his  statement  until  he  had  changed  it  three  times. 
Then  it  was  not  as  clear  as  it  should  have  been,  but  I  signed  it  to  get  rid 
of  him.     I  wanted  to  attend  to  my  sick  folks." 

Dan  Lewis  afterward  made  affidavit  to  these  facts,  and  a  com- 
plaint was  submitted  to  the  postmaster-general.  So  far  as  known, 
no  effort  was  made  to  discipline  Inspector  Reid,  who  continues  in 
good  standing  in  the  postoffice  inspection  service.     The  evidence 


THE  DREYFUS  CASE  OF  AMERICA  643 

throughout  this  case  shows  it  to  be  most  unlikely  that  the  word  of 
any  citizen  would  be  taken  by  officials  of  the  Postoffice  Department 
against  that  of  a  postoffice  inspector.  Indeed,  it  would  appear  to 
be  the  fixed  policy  of  the  Department  to  sustain  the  inspectors  "for 
the  good  of  the  service"  in  any  action  they  may  see  fit  to  take. 

THE   PETITION  TO   CORTELYOU. 

The  St.  Louis  Globe-Democrat  of  March  5,  under  the  title, 
"Lewis  and  Counsel  to  Ask  Use  of  Mail,"  announces  Lewis'  inten- 
tion to  appeal  to  Cortelyou  for  a  suspension  of  the  fraud  order. 
The  article  recites  that  a  party  consisting  of  Lewis,  Judge  Shepard 
Barclay,  of  counsel  for  the  bank,  with  Messrs.  Coyle  and  Kramer, 
arrived  in  Washington  on  March  4,  Lewis'  birthday.  Here  the 
party  was  joined  by  Alexander  Del  Mar,  who,  however,  was  not 
present  when  the  petition  in  Lewis'  behalf  was  presented  to  the 
postmaster-general.  Fulton,  postoffice  inspector-in-charge  at  St. 
Louis,  was  expected  the  day  following.  Inspector  Sullivan  was  said 
to  have  been  in  Wasliington  for  two  weeks.  Judge  Barclay  stated 
that  the  object  of  the  party  was  to  show  that  the  affairs  of  the  bank 
had  been  liquidated  and  to  present  a  petition,  signed  by  some  of 
the  strong  business  men  and  bankers  of  St.  Louis,  to  allow  Mr. 
Lewis  once  more  the  free  use  of  the  mail.  Judge  Barclay  said: 
"We  have  paid  all  loans  made  by  the  bank,  about  which  so  much 
stir  was  made.  The  depositors  have  been  paid  and  the  stockholders 
have  received  eighty-five  per  cent  of  their  holdings.  The  bank 
turned  out  to  be  in  a  remarkably  solvent  condition.  We  want  to 
show  Mr.  Cortelyou  that,  in  the  opinion  of  a  large  number  of  busi- 
ness men  in  St.  Louis,  it  would  be  an  act  of  justice  to  allow  Mr. 
Lewis  to  use  the  mails  in  the  prosecution  of  his  publishing  busi- 
ness." 

The  next  day,  by  prearrangement,  the  conference  with  Cortelyou 
took  place.  Lewis  personally  had  nothing  to  do  with  the  circula- 
tion of  this  petition  in  St.  Louis  and  did  not  wait  upon  the  post- 
master-general on  this  occasion.  There  were  present  Messrs. 
Kramer  and  Coyle,  officers  of  the  bank;  Judge  Barclay,  of  counsel; 
Congressman  Landis;  and  on  behalf  of  the  Department,  Goodwin 
and  Cortelyou.  By  one  of  those  grim  coincidences,  to  which  allu- 
sion has  been  made,  the  St.  Louis  dailies  chronicled,  along  with  the 
news  of  Lewis'  petition,  the  fact  that  the  first  date  had  been  set 
for  Lewis'  trial  in  the  United  States  Federal  Courts  on  the  charge 
of  conspiracy  in  defrauding  the  Government  of  postal  revenue. 
This  information  outran  Lewis  to  the  ears  of  the  members  of  Con- 
gress, with  whom  it  was  his  purpose  to  discuss  the  proposed  inves- 
tigation as  soon  as  the  business  of  his  associates  with  the  postmas- 
ter-general had  been  transacted.     The  Republic  of  March  6  says: 

An  active  campaign  was  begun  today  bj  E.  G.  Lewis  to  secure  the 
revocation  of  the  fraud  order  against  himself  and  the  People's  Bank.  A 
petition  was  todaj  filed  with  the  postmaster-general  asking  its  removal.  It 
was  signed  by  bankers,  brokers,,  attorneys,  wholesale  jobbers  and  several 


644  THE  SIEGE  OF  UNIVERSITY  CITY 

publishers  of  St.  Louis.  Mr.  Cortelyou  listened  to  the  petition  and  argu- 
ments in  support  of  it,  which  were  offered  by  Judge  Barclay  in  Lewis' 
behalf.  He  said  that  he  would  give  the  matter  earnest  consideration,  but 
gave  no  intimation  as  to  his  intention.  The  Lewis  petition  bears  date  of 
February  ii2,  1906,  and  is  as  follows: 

To  the  Honorable,  the  Postmaster-General  of  the  United  States:  The 
undersigned  hare  been  informed  of  the  "fraud  order"  issued  against  Mr. 
E.  G.  Lewis  of  St.  Louis,  Mo.,  by  the  Postoffice  Department  of  the  United 
States,  in  July,  1905,  whereby  he  is  debarred  from  receiving  any  letters 
and  other  mail  addressed  to  him.  We  have  also  learned  of  the  proceed- 
ings for  liquidation  of  the  People's  United  States  Bank,  of  which  he  is 
president,  in  which  proceedings  the  depositors  will  be  paid  in  full  and  a 
dividend  of  eighty-five  per  cent  has  already  been  declared  in  favor  of 
stockholders,  according  to  the  report  of  Hon.  Frederick  Essen  as  re- 
ceiver of  the  bank.  In  view  of  these  circumstances  and  of  the  fact  that 
Mr.  Lewis  is  the  managing  editor  in  charge  of  the  Woman's  Magazine,  a 
iponthly  journal  having  an  extensive  circulation  throughout  the  United 
States  and  published  in  a  large  and  valuable  printing  establishment  (the 
Woman's  Magazine  building)  in  the  suburbs  of  St.  Louis,  we  most  respect- 
fully petition  the  Honorable  Postmaster-General  to  revoke  the  "fraud 
order"  aforesaid,  so  as  to  restore  to  said  Lewis  the  use  of  the  Unitedl 
States  mails,  as  enjoyed  by  other  citizens  in  our  country. 

It  is  the  opinion  of  the  undersigned  that  the  revocation  of  the  "fraud 
order"  would  be  generally  approved  by  those  acquainted  with  the  facts 
and  especially  by  a  great  majority  of  the  people  of  St.  Louis,  Mo.,  where 
Mr.  Lewis  and  his  enterprises  are  best  known. 

Lewis  and  his  party  remained  in  Washington  until  March  11. 
Their  time  was  occupied  chiefly  in  waiting  upon  members  of  Con- 
gress and  "lobbying"  for  a  congressional  investigation  of  the  aff"airs 
of  the  People's  Bank.  On  that  day  the  Crumpacker  bill,  the  his- 
tory of  which  plays  so  important  a  part  in  what  follows,  was  intro- 
duced in  Congress.  Lewis  left  Washington  for  St.  Louis  at  2:30, 
believing  that  he  had  made  substantial  progress. 

On  March  17,  Representative  G.  H.  Lindsay,  of  New  York,  pre- 
sented to  the  House  of  Representatives  the  petition  laid  before 
Cortelyou  by  Lewis'  associates.  Three  days  later,  Postmaster-Gen- 
eral Cortelyou  sent  to  the  Speaker  of  the  House  a  communication 
in  which  he  announced  his  refusal  to  respond  to  the  Crumpacker 
resolution.  The  reason  assigned  was  that  most  of  the  documents 
in  the  case  were  in  possession  of  the  United  States  Attorney  at  St. 
Louis.  These  were  said  to  be  needed  for  use,  both  in  the  defense 
of  the  suit  in  equity  brought  by  the  bank  against  the  postmaster  at 
St.  Louis  and  in  the  prosecution  of  the  two  criminal  cases  against 
Lewis.     Cortelyou  said: 

In  my  judgment,  not  only  is  it  incompatible  with  the  public  interest  to 
submit  to  the  House  of  Representatives  at  this  time  the  documents  asked 
for  in  its  resolution,  but  it  is  impossible  to  do  so  without  seriously  hinder- 
ing the  officials  of  the  Government  in  their  conduct  of  the  proceedings 
referred  to  by  the  Faulted  States  District  Attorney.  Promptly  upon  the 
conclusion  of  those  proceedings,  however,  I  will  make  further  and  detailed 
response  to  this  resolution. 

The  case  of  the  bank  was  again  brought  up  in  the  House  of 
Representatives  by  Congressman  Crumpacker  on  April  11.  The 
Globe-Democrat,  on  the  following  morning,  said: 


THE  DREYFUS  CASE  OF  AMERICA  645 

The  postofEce  appropriation  bill  was  under  consideration,  and  Mr. 
Crunipacker  moved  to  reduce  the  number  of  inspectors  and  rural  agents 
by  one  hundred.  He  called  attention  to  the  power  of  postoffice  inspectors 
in  making  arrests  and  assessing  fines,  and  of  the  Department  in  issuing 
fraud  orders.  That  Department,  he  said,  combined  all  the  powers  of 
government,  legislative,  executive  and  judicial.  Its  power  extended  over 
the  reputation  and  business  of  the  country.  Yet  when  a  person  affected 
by  its  action  asked  to  see  the  reports  of  the  inspectors,  he  was  denied  fhat 
privilege.  He  referred  to  the  case  of  the  People's  Bank.  Only  last  week, 
he  said,  the  Supreme  Court  of  Missouri  decided  the  concern  was  not 
insolvent,  and  never  had  been.  They  had  ordered  its  business  returned 
to  the  corporation.  "But  what's  the  use?"  asked  Mr.  Crumpacker.  "There 
stands  the  fraud  order,  which  prohibits  it  from  doing  any  business  by 
correspondence." 

Four  days  later,  by  another  coincidence,  it  was  announced  in  the 
St.  Louis  papers  that  a  Federal  grand  jury  was  again  after  Lewis 
and  would  make  a  more  thorough  investigation  than  had  previously 
been  made  of  the  People's  Bank  and  Lewis  Publishing  Company's 
affairs.  Imagine,  if  you  can,  the  effect  of  such  announcement  upon 
Lewis'  personal  reputation  and  credit  as  a  citizen  and  a  business 
man. 

THE    SIEGE    BECOMES    A    POLITICAL    ISSUE. 

Lewis  was  again  summoned  to  Washington,  as  we  know,  on  April 
30,  for  a  hearing  before  Madden.  Cortelyou,  on  the  occasion  of 
his  previous  visit  of  March  5,  had  refused  Lewis  a  private  audience. 
But,  two  days  after  the  hearing  before  Madden,  he  so  far  unbent 
as  to  accord  Lewis  and  his  counsel  a  two-hour  conference.  The 
two  following  letters,  with  which  Lewis  had  armed  himself  before 
leaving  St.  Louis,  may,  to  some  extent,  account  for  this  reversal 
of  policy.  They  at  least  show  that  Lewis  left  no  stone  unturned 
in  the  way  of  influencing  legitimate  political  power  in  the  endeavor 
to  secure  a  proper  hearing.  The  first  of  these  communications, 
under  date  of  April  27,  is  a  letter  of  introduction  from  R.  C. 
Kerens,  a  Missouri  Republican  of  national  political  prominence,  to 
Congressman  A.   P.   Murphy.     It  is  self-explanatory. 

Dear  Mr.  Murphy:  This  will  present  my  friend,  Mr.  E.  G.  Lewis,  of 
this  city.  You  have  heard  of  Mr.  Lewis,  and  I  want  to  say  to  you  that 
in  my  judgment  no  man  has  ever  been  more  greatly  persecuted  or  more 
brutally  treated,  without  any  cause  or  reason.  The  whole  case  is  simply 
a  conspiracy,  as  I  believe,  without  the  slightest  foundation.  A  great  in- 
justice has  been  done.  It  is  only  a  wonder  that  the  conspiracy  did  not 
succeed  in  its  object,  which,  I  believe,  had  for  its  purpose  personal  ag- 
grandizement by  certain  evil-minded  and  designing  persons.  There  was 
also  jealousy  engendered  from  false  publications.  This  man  has  been 
pursued  and  unjustly  attacked  with  a  persistency  that  is  beyond  com- 
prehension. 

Mr.  Lewis  will  tell  you  of  some  other  matters  that  will  interest  you, 
and  I  wish  you  would,  in  your  straightforward,  manly  and  courageous 
manner,  help  him  in  any  way  you  can.  He  is  right,  and  will  succeed, 
despite  the  disreputable  efforts  to  destroy  not  only  him  and  his  character, 
but  his  property.  Talk  with  Walter  B.  Stevens,  also.  He  is  familiar  with 
the  facts  and  understands  them  better  than  I  do.  I  speak  from  personal 
observation. 

The  second  letter  was  addressed   to   the  postmaster-general  by 


646  THE  SIEGE  OF  UNIVERSITY  CITY 

Thomas  J.  Akins,  a  member  of  the  Republican  National  Committee, 
under  date  of  April  28,  1906.     It  reads  as  follows: 

Dear  General  Cortelyou:  Mr.  E.  G.  Lewis  of  St.  Louis  will  be  in 
Washington  Mondar  to  attend  a  hearing  relative  to  the  fraud  order  which 
has  been  issued  against  him.  There  are  some  features  of  this  controversy 
that  are  very  far-reaching  and  involve  the  rights  of  the  individual  citizen. 
Much  sympathy  among  our  business  men,  and  especially  the  banks,  is 
being  manifested  here  for  Mr.  Lewis,  occasioned  by  the  fact  that  the  bank 
of  which  he  was  president  and  which  was  placed  in  the  hands  of  a 
receiver,  has  paid  the  depositors  in  full  and  tlie  stockholders  85  cents  on 
the  dollar. 

I  feel  it  my  duty  to  advise  you  of  the  fact  that  newspaper  men  have 
been  here  in  great  numbers,  gathering  facts  concerning  the  fraud  order 
issued  against  Mr.  Lewis,  and  also  the  winding  up  of  the  affairs  of  the 
bank.  The  whole  controversy  seems  to  involve  the  wisdom  of  the  policy 
of  the  PostofBce  Department  in  taking  action  of  this  kind,  when  the 
parties  at  interest  have  no  course  by  which  they  can  protect  their  indi- 
vidual right.  One  of  the  Indianapolis  papers,  published  by  Mr.  D.  Smith — 
I  think  it  is  the  Sentinel — has  had  a  man  here  for  two  days,  gathering  the 
facts  for  a  very  comprehensive  article  to  be  published  next  week. 

T  never  met  Mr.  Lewis  in  my  life  until  yesterday,  but  on  receiving 
this  information  I  sent  for  him  (he  is,  by  the  way,  a  Republican),  and 
requested  him  to  wire  the  Sentinel  to  withhold  publication  of  this  matter 
until  after  he  had  talked  with  you.  I  am  also  informed  that  a  dozen  or 
more  of  the  leading  dailies  of  the  country  have  been  here  on  the  same 
mission,  and  that  Mr.  Lewis  has  invariably  taken  the  position  that  this 
is  not  a  party  question,  and  has  judiciously  refrained  from  giving  any 
information    at   present. 

Mr.  Lewis  is  now  erecting  a  new  building,  and  I  understand  has  pur- 
chased a  very  large  press,  and  will  soon  begin  the  publication  of  a  daily 
newspaper.  I  think  it  would  be  wise  for  you  to  have  a  personal  talk  with 
Mr.  Lewis,  as  this  matter  is  assuming  proportions  that,  in  my  judgment, 
are   far-reaching. 

You  must  imderstand  me  clearly.  I  know  nothing  of  the  merits  or 
demerits  of  Mr.  Lewis'  case,  and  I  repeat  that  I  never  met  him  until 
yesterday.  I  sent  for  him  and  made  the  request  of  him  that  the  publica- 
tions above  referred  to  should  be  withheld  until  after  his  visit  to  Wash- 
ington. Your  good  judgment  will  dictate  the  course  which  you  should 
pursue. 

Whatever  political  significance  these  letters  may  have  had  to 
Cortelyou's  mind  seems  to  have  been  outweighed,  in  his  judgment, 
by  the  importance  to  the  Administration  of  the  support  of  the  post- 
office  brigade.  The  only  effect  of  these  and  similar  protests  seems 
to  have  been  to  cause  the  Department  to  redouble  its  efforts  to  crush 
Lewis,  by  excluding  his  publications  from  the  mails.  The  interview 
accorded  Lewis  and  his  counsel  on  May  3,  was,  so  far  as  any  imme- 
diate action  was  concerned,  without  visible  result. 

The  Crumpacker  bill,  meanwhile,  kept  the  agitation  over  the 
People's  Bank  alive  and  crystallized  public  sentiment  in  the  col- 
umns of  the  press.  A  big  gun  was  fired  in  Lewis'  behalf  when 
the  Indianapolis  News  came  out  early  in  May  with  a  series  of 
lengthy  news  articles,  reviewing  in  full  detail  the  history  of  the 
People's  Bank.  A  reporter  of  the  News  had  been  assigned  to  make 
personal  investigation  in  St.  Louis.  On  May  8,  in  a  special  dis- 
patch, he  sums  up  the  opinions  of  numerous  business  men,  to  the 


Views  taken  at  the  Art  Institute  of  the  American  Woman's  League  during  the  zvinter 
term  of  igio  and  igii 

'^Class  room  of  the  late  John  H.   Vanderpoel,  director  of  School  of  Painting. 
^Atelier  of  George  Julian  Zolnay,  director  of  the  School  of  Sculpture 


yicws  taken  in  IQI I  during  the  Summer  School  of  the  Art  Institute  .  /  fh.,-  American 
Woman's  League 

^Class  room  of  Frank  Phoenix,  instructor  in  fainting  -Closs  room  of  Frederick  H. 
Rhead,  instructor  in  pottery 


THE  DREYFUS  CASE  OF  AMERICA  649 

effect  that  Lewis  was  unjustifiably  persecuted  by  the  local  postal 
officials.  After  quoting  a  statement  made  by  L.  C.  Nelson^  "one 
of  the  wealthiest  and  best  known  men  of  St.  Louis,"  he  said: 

Nelson  has  retired  from  active  business  connection  and  was  pointed 
out  as  one  of  the  men  who  could  talk  about  the  Lewis  matter.  "Could 
talk" — that  is  a  strange  state  of  affairs!  The  writer  has  been  informed 
that  many  men  with  business  connections  would  be  afraid  to  talk  and 
express  their  opinions  on  the  Lewis  matter.  It  was  said  that  some  already 
have  been  threatened  with  a  Government  fraud  order  if  they  talked  too 
much.  The  third  man  called  upon  was  one  of  those  who  was  afraid  to 
talk.  He  said  that  he  and  his  great  institution  had  been  threatened  with 
a  fraud  order,  and  that  he  could  take  no  chances  of  being  quoted. 

On  May  17,  Mr,  Crumpacker  announced  his  intention  to  go 
before  the  House  Judiciary  Committee  the  day  following,  to  make 
an  argument  in  support  of  his  bill.  He  was  quoted  in  the  India- 
napolis  Morning  Star  as   follows: 

The  congressman  intends  to  tell  the  committee  about  the  case  of  Kitty 
Smith  of  South  Whitley,  Ind.  When  Kitty  was  a  tiny,  motherless  girl, 
she  was  left  alone  one  day.  She  fell  against  the  stove.  Her  arms,  up  to 
the  elbow,  were  burned  to  a  crisp.  Both  were  amputated.  Then  her 
father  died.  Kitty  was  sent  to  an  orphan  asylum  in  Chicago.  Naturally 
bright,  she  acquired  knowledge  rapidly  and  learned  to  do  marvelous  things 
with  her  toes.  Now  grown  to  womanhood,  she  has  raised  herself  above 
want  and  dependence  on  others  by  publishing,  in  an  illustrated  pamphlet, 
the  story  of  her  life.  These  she  sends  out  with  a  letter  saying  that  she 
believes  the  little  book  is  worth  twenty-five  cents,  but  if  the  recipient  does 
not  agree  with  her,  she  asks  that  he  return  the  pamphlet.  She  had  realized 
about  six  thousand  dollars  in  this  way  when  she  was  stopped  by  the 
Postoffice  Department.  It  ruled  that,  unless  she  enclosed  a  statement  of 
her  financial  condition  in  future  letters,  she  would  be  posted  as  a  fraud. 
Judge  Crumpacker  says  he  will  repeat  to  the  members  of  the  Judiciary 
Committee  the  story  of  this  unfortunate  girl. 

Two  days  later,  the  Star  announced  tha^  the  Postoffice  Depart- 
ment intended  to  fight  Representative  Crumpacker's  bill.  When 
the  congressman  appeared  to  argue  the  merits  of  his  bill  before 
the  Judiciary  Committee,  he  was  informed  that  the  Department 
desired  to  be  heard.  Immediately  after  this  hearing,  Mr.  Crum- 
packer, in  a  letter  to  Lewis,  announced  the  likelihood  of  temporary 
defeat.     He  says: 

No  favorable  action  can  be  secured  on  the  fraud  order  bill  during  this 
session  of  Congress.  Members  hope  to  adjourn  the  latter  part  of  next 
week.  The  gorge  of  important  bills  is  such  that  nothing  else  will  be 
given  consideration.  This  bill  is  on  the  calendar,  and  I  expect  to  take  it 
up  early  next  season  and  secure  its  passage.  There  is  no  doubt  in  my 
mind  about  the  passage  of  the  bill  when  it  is  reached. 

JUDICIARY   committee's   REPORT   ON    CRUMPACKER    BILL. 

The  arduous  campaign  in  the  first  session  of  the  Fifty-ninth  Con- 
gress was  not,  however,  M'holly  unfruitful.  The  press  announced, 
on  June  9,  that  the  Crumpacker  bill  had  been  favorably  reported 
by  the  committee.  The  report,  after  reviewing  the  law  and  prac- 
tice as  to  fraud  orders,  with  which  the  reader  is  familiar,  says: 

The  report  of  the  postoffice  inspectors  containing  charges  are  not  made 
public.  The  person  under  investigation  is  not  permitted  to  see  them.  It 
is  impossible   for  him  to  know  what  evidence  has  been  submitted  against 


660  THE  SIEGE  OF  UNIVERSITY  CITY 

him  and,  therefore,  he  is  at  a  great  disadvantage  in  attempting  to  exonerate 
himself.  If  a  grand  jury  should  hear  a  number  of  witnesses  and  indict 
a  citizen  for  crime,  and  the  defendant  should  be  arrested  upon  the 
indictment  and  arraigned  before  the  same  grand  jury  for  trial  and 
notified  to  show  cause  why  he  should  not  be  convicted — the  State's  evidence 
having  already  been  heard  in  secret  before  the  grand  jurj' — the  proceeding 
would  be  exactly  similar  in  principle  to  that  which  is  now  conducted  by 
tlie  postmaster-general  in  fraud  order  cases. 

The  courts  have  almost  imiformly  held  that  the  decision  of  the 
postmaster-general  upon  questions  of  fact  in  fraud  order  cases  is  not  sub- 
ject to  judicial  review.  Thus,  a  person  against  whom  such  an  order  issues 
is  never  permitted  to  inspect  the  evidence  upon  which  the  order  is  made. 
He  has  no  opportimity  to  have  the  question  of  his  guilt  or  innocence 
reviewed  by  any  court.  *  *  * 

It  is  thus  demonstrated  (by  the  opinion  of  Judge  McPherson)  that  a 
citizen  whose  business  is  being  investigated,  with  a  view  of  determining 
whether  he  is  securing  property  through  the  mails  by  false  and  fraudulent 
representations,  has  little  or  no  chance  to  make  his  defense.  To  grant 
one  the  right  to  show  cause  why  he  should  not  be  branded  as  a  criminal 
without  giving  him  the  right  to  face  his  accusers  and  to  know  the  evidence 
against   him,  is  of  very  little  value. 

After  stating  the  substance  of  the  argument  of  Judge  Goodwin 
before  the  committee,  the  report  proceeds: 

It  is  a  most  execrable  practice  to  determine  the  important  rights  of 
citizens  upon  confidential  reports  made  as  the  result  of  secret  investiga- 
tions. Postoffice  inspectors,  in  the  investigation  of  questions  of  fraud, 
interview  citizens  in  various  communities  and  collect  information,  much 
of  which  may  be  pure  gossip,  and  none  of  which  comes  from  the  parties 
under  oath.  The  reports  based  upon  this  information  are  forwarded,  with 
the  assurance  that  they  will  never  be  made  public,  and  important  rights  of 
property  and  reputation  are  determined  thereby.  The  individuals  who  give 
testimony  in  this  fashion  are  not  subject  to  prosecution  for  perjury;  they 
can  not  be  reached  in  actions  for  slander;  their  statements  are  utterly 
irresponsible. 

The  mere  fact  that  the  postmaster-general,  as  a  matter  of  grace, 
extends  to  citizens  the  poor  privilege  of  coming  before  his  legal  adviser, 
who  has  already  conducted  an  investigation  and  satisfied  himself  that 
the  person  under  investigation  has  committed  fraud  within  the  meaning 
of  the  law,  and  make  proof,  if  he  can,  to  convince  the  legal  adviser  that 
he  is  innocent,  without  being  allowed  to  know  who  has  testified  against 
him  and  to  what  he  has  testified,  is  a  privilege  without  any  practical  value. 
The  privilege  is  not  given  as  a  matter  of  right.  The  postmaster-general 
may  withhold  it  at  any  time  or  from  any  person  or  association.  Mr. 
Goodwin  stated  to  the  committee  that,  in  many  cases,  it  was  not  expedient 
to  give  the  notice.  He  and  the  postmaster-general  are  the  judges  when 
the  notice  shall  be  given  and  when  not.  It  surely  seems  that  the  privilege 
of  being  heard  before  some  officer  or  tribunal,  and  of  knowing  what  proof 
is  being  submitted  against  one,  is  a  right  to  be  secured  by  the  law.  *  ♦  ♦ 
We  can  see  no  just  ground  for  opposition  to  the  proposed  bill.  It  is 
eminently  fair  and  conservative,  and  fully  protects  every  interest  of  the 
public  against  the  practices  of  scheming  and  designing  for  motives  of 
fraud. 

FRAUD  ORDER  AGAINST  LEWIS  SUSPENDED. 

With  this  valedictory  address  on  the  subject,  the  case  was  held 
over  for  the  following  session  of  Congress.  Lewis'  agitation  against 
the  fraud  order  was  not,  however,  without  some  practical  effect. 
The  August,  1906,  issue  of  the  Woman's  Magazine  contains  the 
following  editorial: 


THE  DREYFUS  CASE  OF  AMERICA  651 

July  4,  1906,  will  be  a  memorable  date.  On  July  3,  the  poor  remains 
of  a  great,  sound  and  solvent  $3,500,000  postal  bank  of  and  for  the 
"common"  people  were  turned  over  to  its  officers  and  directors  by  order 
of  the  Supreme  Court,  which  characterized  its  assassination  by  Swanger 
and  his  allies  as  follows:  "It  was  absolutely  wrong  and  a  violation  of  the 
defendants'  (the  bank's)  rights."  The  costs  were  assessed  against  the 
prosecutors  of  the  case  against  the  bank.  On  July  6,  the  following  letter 
was  sent  me  by  the  Honorable  Postmaster-General: 

Mr.  E.  G.  Lewis,  care  The  Lewis  Publishing  Company,  St.  Louis,  Mo. — 
Sir:  This  is  to  notify  you  that  the  order  issued  to  the  postmaster  at 
St.  Louis,  Mo.,  on  July  6,  1905,  forbidding  the  delivery  of  mail  and  the 
payment  of  money  orders  to  the  People's  LTnited  States  Bank  et  al.,  has 
been  suspended,  so  far  as  it  affects  mail  addressed  to  you  personally. 
This  action  has  been  taken  for  the  reason  that  it  seems  improbable  that 
any  mail  of  consequence  having  reference  to  the  People's  United  States 
Bank  is  now  being  addressed  to  your  name,  and  that  the  continuance  in 
force  of  the  fraud  order,  as  it  relates  to  you  personally,  would  work  an 
unnecessary  hardship.  It  is  the  practice  of  the  Postoffice  Department,  in 
all  cases  in  which  fraud  orders  are  issued  against  the  names  of  individuals, 
to  suspend  or  revoke  them  as  soon  as  it  is  shown  that  little  or  no  mail 
relating  to  the  unlawful  business  contemplated  by  the  order  is  being 
addressed  to  such  persons. 

It  should  l>e  understood,  however,  that  the  order  is  not  revoked,  but 
simply  suspended,  and  that  the  use  of  your  name  in  connection  with  the 
institution  in  question  will  be  deemed  sufficient  grounds  for  withdrawing 
the  order  of  suspension  and  putting  in  full  force  the  order  of  July  6,  1905. 

Responding  to  a  personal  letter  from  Major  Kramer,  dated  July 
9,  Cortelyou  said: 

I  have  your  letter  of  July  9,  with  enclosures.  In  its  conclusion  rou 
say:  "I  believe  that  the  time  is  not  far  distant  when  the  facts  that  are 
now  being  collected  (some  of  which  have  already  reached  you  through 
official  channels)  will  make  clear  to  you  that  Lewis  has  been  the  victim  of 
one  of  the  most  damnable  conspiracies  ever  organized  and  carried  out  in 
the  history  of  America." 

I  have  repeatedly  asked  for  any  evidence  in  possession  of  Mr.  Lewis 
or  his  associates  tending  to  show  a  conspiracy,  but  thus  far  have  not 
received  the  slightest  evidence  of  anything  of  the  sort;  nor  has  Mr.  Lewis 
complied  with  my  several  requests  for  detailed  information  in  connection 
with  his  statement  that  thousands  of  postal  officials  were  discriminating 
against  his  publications.  The  Department  has  treated  this  case  exactly 
as  it  would  any  other  of  the  kind  that  came  before  it,  and  has  had  no 
purpose  in  view  but  the  discharge  of  its  duty  under  the  law. 

The  delicious  humor  of  this  and  numerous  other  of  Cortelyou's 
official  communications  seems  to  have  escaped  the  general's  obser- 
vation. The  autocrat  of  the  Postoffice  Department  seems  here  to 
be  totally  forgetful  of  the  fact  that  he  had  refused  to  submit  the 
secret  reports  and  accusations  against  Lewis  to  Congress.  He 
seems  to  have  forgotten  that  his  refusal  was  based,  in  effect,  upon 
the  grounds  that  publicity  might  result  in  freeing  the  accused,  or 
might  enable  him  to  fix  charges  of  guilt  upon  his  accusers.  Yet, 
during  the  pendency  of  the  selfsame  inquisition  he  now  invites 
the  accused  to  submit  to  him  personally  all  the  evidence  in  his  pos- 
session in  order  that  he,  forsooth,  may  mete  out  stern  punishment 
to  his  own  subordinates.  One  is  irresistibly  reminded  of  that  jolly 
comic  of  nursery  lore,  "Dilly,  Dally,  Come  and  Be  Killed."  More 
soberly,  one  imagines  the  Czar  of  all  the  Russias  inviting  a  band 


652  THE  SIEGE  OF  UNIVERSITY  CITY 

of  revolutionists  to  submit  documentary  proof  of  a  domiciliary  visit 
of  the  secret  police^  in  order  that  the  Cossacks^  by  whom  they  were 
accompanied,  might  be  punished.  One  is  also  reminded  that  Lewis 
in  fact  turned  over  to  the  inspector-in-charge  at  Chicago^  the  re- 
ports of  the  Pinkerton  operatives  touching  the  activities  of  Leonard 
Goodwin,  and  was  told  that  before  he  got  back  to  St.  Louis  he  would 
hear  an  explosion.  To  quote  his  own  language:  "He  is  listening 
for  the  sound  of  that  explosion  yet." 

Cortelyou  came  into  the  Government  service  as  a  postoffice-in- 
spector.  His  brother  was  a  postoffice  inspector.  Any  evidence  sub- 
mitted to  him  against  postoffice  inspectors  must  needs  have  been 
turned  over  to  postoffice  inspectors  for  investigation.  Cortelyou 
has  said,  and  shoAvn,  that  he  deems  the  findings  of  the  postoffice 
inspectors  to  be  conclusive.     Is  comment  necessary? 

ROOSEVELT   UPHOLDS   BUREAUCRACY. 

The  opening  of  the  second  session  of  the  Fifty-ninth  Congress 
marked  the  renewal  of  the  struggle  over  the  Crumpacker  bill.  On 
December  17,  Judge  Crumpacker  wrote  Lewis  as  follows: 

After  a  number  of  interviews  with  Speaker  Cannon  he  has  recognized 
me  to  move  a  suspension  of  the  rules  and  thus  give  tlie  bill  a  privileged 
status.  I  made  this  motion  and  it  was  carried.  The  bill  can  now  be 
called  up  at  any  time.  At  the  first  opportunity,  after  the  holiday  season, 
I  will  call  it  up  and  press  it  until  it  is  considered  and  acted  upon. 

The  revival  of  the  campaign  was  the  signal  for  the  publication, 
by  Goodwin,  of  a  memorandum  which  bears  date  of  December  29, 
1906,  in  opjoosition  to  tlie  measure.  It  bore  the  imprint  of  a  public 
document  and  was  distributed  to  members  of  Congress  and  to  the 
press.  The  issues  in  the  case  of  the  People's  Bank  against  the 
Postoffice  Department  were  now  fairly  joined  before  the  House  of 
Representatives.  Lewis  and  Goodwin  were  the  respective  advocates. 
The  House  was,  in  effect,  sitting  as  a  jury  to  pass  upon  the  merits 
of  the  controversy.  On  January'  7,  Lewis  received  a  telegram  from 
the  Washington  correspondents  of  the  Woman's  National  Daily  that 
the  Crumpacker  bill  had  passed  the  House,  almost  unanimously. 
Congressman  Littlefield,  Clayton,  Keifer,  Crumpacker  and  Landis 
were  reported  to  have  made  speeches  in  favor  of  the  measure. 

The  scene  of  activity  now  shifts  from  House  to  Senate.  Friends 
of  the  Crumpacker  bill  in  the  House  promptly  took  up  the  matter 
with  various  senators.  An  active  campaign  also  was  undertaken 
by  Lewis'  representatives  in  Washington.  The  Globe-Democrat, 
on  January  12,  asserted  that  the  bill  was  strongly  backed  in  the 
Senate.  Other  press  comments  of  that  period  indicated  that  it 
might  pass.  It  thus  became  evident  that,  unless  some  strenuous 
action  was  taken  by  the  Administration,  the  measure  would  become 
a  law.  Thereupon,  it  became  known  that  the  influence  of  the  Ad- 
ministration was  being  quietly  but  powerfully  exerted  against  the 
bill.  Its  death  knell  was  sounded  when  the  Washington  correspond- 
ents flashed  the  news  over  the  wire,  on  January  23,  that  President 


rjczt's^  taken  during  igij   ,n   ,hc  An  Institute  of  the  American   JVonianS  League 
Jj^f^'f^ffiT^l^^lf"''  "'^•"'"^'^'-  -  ^-"-^     '^*"dio  of  Kaihryn  B.  Che: 


instructor  in  china  decoration 


hxlnlnt^  n!  0'ci\iilti.~c  Cluna  Decoration,  designed  and  executed  hv  Mrs.  Kathryn  E. 
Cherry,  Instructor  m  Ceramic  Design,  Art  Institute  of  the  American  Woman's  League, 
and  her  Honor  Students 


THE  DREYFUS  CASE  OF  AMERICA  666 

Roosevelt  would  veto  the  bill,  if  necessary,  to  prevent  its  becoming 
a  law.  "President  Roosevelt,"  said  a  dispatch  to  the  Indianapolis 
Star,  "has  made  known  that,  if  the  Crumpacker  bill  passes  Con- 
gress, he  will  veto  it  and  explain  his  reasons  fully  in  the  veto  mes- 
sage." Following  these  tidings,  the  New  York  Commercial,  on 
January  24,  says:  "It  is  pretty  definitely  settled  that  the  Crum- 
packer bill  will  not  pass  the  Senate.  There  is  a  strong  possibility 
that  it  may  be  found  expedient  to  smother  the  measure  in  the  Senate 
Judiciarj'^  Committee." 

The  Commercial  proved  to  be  an  excellent  prophet.  Editorial 
discussion  waxed  hot  throughout  the  remainder  of  the  session. 
Goodwin  mailed  copies  of  the  postmaster-general's  memorandum, 
McPherson's  opinion  and  his  own  pamphlet  to  every  senator.  Lewis 
and  his  representatives  kept  up  an  equally  strenuous  agitation. 
But  when  it  became  known  that  the  postmaster-general  would  be 
backed  by  the  President  and  supported,  if  need  be,  by  a  presidential 
veto,  it  was  apparent  that  the  measure  could  not  become  a  law. 

As  the  month  of  February  progressed,  it  became  manifest  that 
the  Judiciary  Committee  would  make  no  report.  Senators  Foraker 
and  LaFollette  announced  themselves  in  favor  of  the  bill.  But 
both  were  in  hearty  disfavor  with  the  Administration.  As  the  close 
of  the  session,  which  was  to  expire  by  limitation  on  March  4^,  drew 
near,  the  anxiety  of  Lewis'  Washington  representatives  lest  Cortel- 
you  should  retaliate  by  withdrawing  the  second-class  privilege  from 
the  Lewis  publications,  became  hourly  greater.  Finally,  on  Febru- 
ary 25,  Dunn  wired  Lewis  that  the  Senate  Judiciary  Committee  had 
announced  it  was  now  too  late  to  consider  the  Crumpacker  bill, 
which  would,  therefore,  be  left  over  until  the  following  session. 
This  news  was  confirmed  by  the  press  dispatches  of  February  26, 
to  the  St.  Louis  dailies.  Meanwhile,  the  temper  of  the  Adminis- 
tration in  postal  affairs  was  further  indicated  by  the  announcement 
of  President  Roosevelt's  intention  to  exercise  the  powers  of  a 
national  censorship  over  the  entire  American  press.  John  Fallon 
O'Laughlin,  in  a  two  column  news  dispatch  to  the  Chicago  Tribune, 
on  February  11,  says: 

In  the  interests  of  American  morality,  President  Roosevelt  proposes 
to  have  the  Federal  Government  determine  what  the  people  shall  read. 
He  will  confer  tomorrow  with  Postmaster-General  Cortelyou  and  Attorney- 
General  Bonaparte  in  regard  to  the  legality  of  barring  from  the  mails 
all  newspapers  which  print  "full  and  disgusting  particulars  of  the  Thaw 
case."     The  following  brief  announcement  was  made  this  morning: 

"The  President  has  communicated  with  Postmaster-General  Cortelyou 
to  learn  whether  it  is  feasible  to  bar  from  the  mails  the  papers  that  give 
full  and  disgusting  particulars  of  the  Thaw  case.  He  does  not  know 
whether  it  is  feasible,  but  if  it  is  he  wishes  it  done."  There  is  no  precedent, 
even  of  an  indirect  character,  for  the  exclusion  of  court  evidence  from 
the  mails.  The  nearest  approach  to  anything  of  the  kind  was  an  order 
issued  by  the  postmaster-general  some  months  ago,  under  which  news- 
papers all  over  the  country  were  directed  to  cease  publication  of  sugges- 
tive and  improper  advertisements.  It  is  claimed  that  the  postmaster- 
general  had  authority  to  take  this  step.     If  he  has  power  to  go  a  little 


656  THE  SIEGE  OF  UNIVERSITY  CITY 

furtlier  and  determine  what  shall  be  published  in  the  news  columns,  carry- 
ing the  matter  to  its  logical  conclusion,  the  postmaster-general  can  become, 
if  he  so  elects,  the  censor  of  the  press. 

This  dispatch  concludes  with  a  reference  to  the  Crumpacker  bill. 
It  is  summed  up  as  follows: 

The  President  has  given  notice  that  if  the  Senate  concurs  in  the  action 
of  the  House  on  the  modification  of  the  fraud  order  law,  he  will  veto  the 
measure.  He  is  determined  to  protect  the  people  from  swindling  schemes, 
as  he  is  now  determined  to  prevent  them  from  being  corrupted  by  reading 
such  revelations  as  the  Thaw  trial  affords. 

The  above  is  thus  commented  upon  by  ISIr.  Pierce  in  the  book 
"Federal  Usurpation/'  above  quoted: 

Even  in  France,  the  arbitrary  power  exercised  by  our  Postoffice  De- 
partment would  not  be  tolerated  for  a  moment.  The  Gaulois,  a  Parisian 
paper,  speaking  of  President  Roosevelt's  action  in  excluding  from  the 
mails  newspapers  printing  the  details  of  the  Thaw  trial,  said:  "No 
sovereign  in  Europe,  unless  it  be  the  Czar  or  the  Sultan,  has  the  power  to 
do  what  the  American  executive  has  done."  The  Gil  Bias,  another  paper, 
commented  on  the  same  matter,  saying:  "Imagine  President  Fallieres 
interdicting  and  expurgating  such  an  account."  If  publishers  must  run 
the  gauntlet  of  such  secret  and  irresponsible  postal  supervision,  the  free- 
dom of  the  citizen  would  seem  to  be  greatly  impaired.  In  England,  from 
whence  we  drew  our  principles  of  English  liberty,  and  where  happily  they 
still  continue,  the  Government  has  no  authority  to  seize  the  stock  of  a 
publisher  because  it  consists  of  books,  pamphlets  and  papers  which,  in 
the   opinion   of  the   Government,   contain   seditious   or   dangerous  matter. 

"WAS  CORTELYOU  REVENGEFUL? 

The  Fifty-ninth  Congress  expired  by  limitation  on  March  4.  On 
that  day  Cortelyou  knew  that  he  must  vacate  his  berth  as  postmas- 
ter-general. During  the  few  days  remaining  of  his  administration, 
after  the  fate  of  the  Crumpacker  bill  had  been  definitely  sealed,  he 
complained  bitterly  to  Arthur  Dunn  of  Lewis'  advocacy  of  that 
measure.  His  aides  had  been  about  him  for  many  days,  assisting 
him  to  frame  his  rejoinders  in  the  controversy  on  the  Lewis  case 
that  was  then  raging  between  himself  and  Third  Assistant  Madden. 
The  last  two  days  of  his  administration,  he  asserts,  were  devoted 
almost  exclusively  to  this  matter.  IVIarch  4  was  Lewis'  birthday.  A 
birthday  festival  was  being  celebrated  at  his  home  in  University 
City.  The  telephone  bell  rang.  Lewis  was  called  to  the  phone.  A 
telegram  from  Washington  was  repeated  to  him  over  the  wire.  It 
announced  that,  as  the  closing  act  of  his  administration,  Cortelyou 
had  withdrawn  the  second-class  privilege  from  both  of  the  Lewis 
publications. 

The  fight  against  the  fraud  order  had  been  lost.  Was  the  de- 
struction of  the  Woman's  Magazine  a  blow  in  retaliation?  Was 
it  an  effort  to  prevent  further  agitation  of  the  case  of  the  People's 
Bank?  Or,  was  it  indeed  justified  upon  the  state  of  facts  set  forth 
in  the  preceding  chapters?  From  the  actual  conditions,  as  they 
existed,  every  reader  must  draw  his  own  deductions. 


CHAPTER  XXVII. 

PLOT  AND  COUNTER-PLOT 

The  Appeal  to  Roosevelt — The  "Shot-Gun  Letter" — Petition 
OF  St.  Louis  Business  Mens'  Association — The  Ek- 
stromer  Tragedy — Injunction  Proceedings — The  De- 
tective, Beck — Albert's  Investigation — The  Getty 
Commission — The  Manhattan  Cafe  Incident — Lawshe 
Loses  Confidence — Lesan-Francis  Negotiation — Mad- 
den Publishes  His  Story — Enter  William  H.  Taft. 

THE  WHITE  HOUSE 

WASHiNGTox  MaTch  15,  1907. 

Mr.  Dear  Mr.  Bartholdt:  I  have  received  your  letter  of  the  14th 
instant,  enclosing  a  letter  to  you  from  E.  G.  Lewis,  under  date  of  the 
11th  instant.  Mr.  Arthur  Dunn,  Mr.  Lewis'  Washington  representative, 
called  upon  me  yesterday  and  upon  his  representations  I  was  about  to 
take  the  matter  up  with  Postmaster-General  Meyer  and  Secretary  Cortel- 
you  today.  In  this  letter  of  Mr.  Lewis,  however,  in  what  Mr.  Lewis  says 
about  Mr.  Cortelj^ou  and  in  what  he  says  about  me,  he  is  not  only  delib- 
erately threatening  us,  but  deliberately  trying  to  blackmail  us.  If  he  has 
had  any  information  showing  corruption  by  Judge  Goodwin,  the  assistant 
attorney-general  of  the  Postoffice  Department,  as  he  says  he  has  had  for 
over  a  year,  and  has  failed  to  bring  it  to  my  attention,  he  has  been  guilty 
of  outrageous  misconduct.  Now,  in  his  letter  to  you,  the  implication  is 
plain  that  he  wishes  to  bargain  for  the  suppression  of  his  cases  against 
Judge  Goodwin,  in  consideration  of  the  order  against  his  publications 
being  revoked.  I  shall  order  an  immediate  investigation  into  Judge 
Goodwin.  But  this  letter  of  Mr.  Lewis  would  alone  absolutely  force  me  to 
decline,  under  any  consideration  whatever,  to  reopen  the  matter  of  the 
order  itself.  I  shall  put  the  letter  before  Secretary  Cortelyou  and 
Postmaster-General  Meyer,  together  with  a  copy  of  this  my  letter  to  you, 
and  shall  inform  Mr.  Dunn  of  my  action.  As  regards  Mr.  Lewis'  threats 
concerning  me,  I  may  add  that  there  could  be  nothing  to  which  I  would 
feel  more  profound  indifference. 

Sincerely  yours, 

(Signed)   Theodore  Roosevelt. 

Hon.  Richard   Bartholdt,  House  of  Representatives. 

The  foregoing  letter  marks  one  of  the  great  crises  in  the  Siege 
of  University  City.  It  makes  good  the  prophecy  of  Secretary  of 
State  Swanger  in  his  overtures  to  Frederick  Essen,  the  second  re- 
ceiver of  the  People's  Bank,  that  upon  the  side  of  Lewis'  opponents 
would  be  found  the  entire  Administration  "from  the  President 
down."  It  will  be  observed  that  Roosevelt  does  not  here  attempt 
to  pass  upon  the  merits  of  the  controversy.  The  question  of  the 
rights  of  the  Lewis  Publishing  Company  to  the  second-class  mail- 
ing privilege  for  its  two  publications  is  not  raised.  This  issue  was 
never  definitely  joined  before  the  President.  This  bomb  which 
shattered  the  last  hope  of  Lewis  and  his  associates  for  justice  a! 

657 


658  THE  SIEGE  OF  UNIVERSITY  CITY 

the  hands  of  the  administrative  branch  of  the  Government,  through 
the  intervention  of  the  Chief  Executive,  was  a  premature  explosion. 
It  came  about  by  the  veriest  fluke.  The  decision  thus  voiced  by 
Roosevelt  is  simply  to  sustain  Cortelyou.  He  says:  "I  was  about 
to  take  up  the  matter  with  Postmaster-General  Meyer  and  Secretary 
Cortelyou  today,  *  *  *  but  ti^jg  letter  of  Mr.  Lewis'  would 
absolutely  force  me  to  decline,  under  any  consideration  whatever,  to 
reopen  the  matter  of  the  order  itself."  Thus  the  presidential  fiat 
went  forth.  The  order  was  not  to  be  reopened.  The  mind  of  Roose- 
velt, once  made  up,  is  not  easily  altered.  This  was  especially  true, 
when  the  honor  and  good  name  of  a  personal  friend  and  member  of 
his  official  family  were  at  stake.  Cortelyou,  at  all  hazards,  was 
to  be  sustained.  The  only  recourse  of  the  Lewis  Publishing  Com- 
pany was  in  the  courts. 

THE   APPEAL   TO   ROOSEVELT. 

The  effect  of  this  last  and  deadliest  blow  of  the  Administration 
will  be  better  understood  when  it  is  known  that  Lewis  had  been 
an  ardent  admirer  of  Theodore  Roosevelt  throughout  the  latter's 
strenuous  career.  A  Republican  in  political  affiliation,  Lewis  shared 
with  some  millions  of  his  fellow  citizens  the  universal  honor  and 
esteem  in  which  the  President  was  then  held,  as  an  individual,  and 
as  head  of  his  party  and  of  the  Nation.  He  also  entertained  a 
personal  regard  for  Roosevelt,  the  ex-ranchman,  warmly  colored 
by  a  species  of  boyish  hero-worship.  For  Lewis,  as  a  boy,  spent 
two  years  upon  a  Western  ranch  not  many  miles  distant  from  that 
of  Roosevelt.  He  relates,  on  one  occasion,  having  made  a  pilgrira- 
mage  to  visit  Roosevelt,  at  Avhich  time  he  seems  to  have  fallen  under 
the  SAvay  of  the  latter's  magnetic  and  likeable  personality.  The 
columns  of  the  Woman's  Magazine  certify  to  the  unshaken  loyalty 
of  Lewis  to  the  ideal  which  he  had  cherished  of  the  hero  of  the 
Little  Rig  Horn  all  through  the  two  years'  warfare  with  the  Trium- 
virate at  St.  Louis  following  the  destruction  of  the  People's  Bank. 
Both  his  editorials  and  his  personal  correspondence  prove  that  he 
had  maintained  this  confidence  inviolate. 

On  one  of  his  trips  to  Washington  to  attend  a  Gridiron  Club 
banquet,  Lewis,  as  publisher  of  the  Woman's  National  Daily,  was 
accorded  through  the  courtesy  of  Arthur  Wallace  Dunn,  the  honor 
of  a  personal  interview  with  the  President.  The  call  was  a  purely 
social  one.  The  controversy  between  Lewis  and  the  Postoffice  De- 
partment was  not  touched  upon.  Lewis  recalled  to  the  President's 
recollection  his  visit  to  the  latter's  ranch.  Though  the  circum- 
stance had  passed  from  Roosevelt's  mind,  he  remembered  distinctly 
a  certain  pair  of  gorgeous  leopard-skin  chaps  which  he  was  then 
wearing.  These  had  caught  Lewis'  eye  and  filled  him  with  admira- 
tion. The  interview,  in  short,  was  most  cordial.  Lewis  came  from 
it  with  renewed  loyalty  to  Roosevelt  and  with  the  most  absolute  con- 
fidence that  an  appeal  for  justice  to  the  Chief  Executive  of  the 
Nation    if  one  should  be  necessary,  would  meet  a  receptive  ear. 


THE  DREYFUS  CASE  OF  AMERICA  659 

We  are  now  to  learn  how  the  final  appeal  to  Roosevelt  against 
the  decision  of  Cortelyou  excluding  the  Woman's  Magazine  and 
Farm  Journal  from  the  second-class  mails  was  thwarted.  This 
hope  of  relief  having  been  frustrated,  we  are  next  to  consider  the 
tangle  of  plots  and  counter-plots  whereby,  during  the  summer  and 
fall  of  1907,  Lewis  sought,  through  every  conceivable  channel  of 
law,  of  influence,  and  of  intrigue,  to  bring  about  the  reinstatement 
of  his  publications  in  the  mails.  The  effect  of  Cortelyou's  decision, 
if  not  speedily  reversed,  manifestly  meant  the  ruin  of  the  Lewis 
Publishing  Company.  The  difference  in  postage  between  the  sec- 
ond-class and  the  third-class  rate  amounted  to  over  a  half-million 
dollars,  or  nearly  double  the  profits  on  the  two  publications  affected. 
By  their  suspension  the  company's  revenue,  with  the  exception  of 
that  of  the  Woman's  National  Daily,  would  be  cut  off.  The  Daily 
was  then  an  object  of  investment,  rather  than  a  source  of  revenue. 
In  common  with  all  new  publications,  it  was  being  run  at  a  very 
considerable  loss.  It  was  thus  apparent  to  Lewis  and  his  associates 
that,  unless  the  two  magazines  could  be  reinstated,  the  entire  plant 
would  be  shut  down  and  the  company  must  go  into  voluntary  liqui- 
dation. 

Lewis,  when  brought  face  to  face  with  this  situation,  acted  with 
his  usual  promptitude.  He  dispatched  lengthy  telegrams  of  protest 
to  both  senators  and  every  representative  of  the  State  of  Missouri 
at  Washington,  and  to  many  otlier  congressmen  of  his  acquaint- 
ance. These  telegrams  he  followed  with  personal  letters,  review- 
nig  his  controversy  with  the  Department  and  urging  his  appeal  for 
justice.  He  then  commissioned  McWade  and  Dunn,  the  Washing- 
ton representatives  of  the  Daily,  to  interview  Third  Assistant  Mad- 
den, incoming  Postmaster-General  Meyer,  and  the  President  him- 
self, with  a  view  of  taking  an  appeal  to  the  head  of  the  Adminis- 
tration from  the  decision  of  Cortelj^ou.  The  first  effect  of  these 
measures  was  recorded  in  special  dispatches  of  March  7  to  the  St. 
Louis  papers.     The  Republic  said: 

Senator  William  J.  Stone  of  Missouri  today  entered  a  vigorous  protest 
against  Cortetyou's  action  in  the  Lewis  cases.  Senator  Stone  has  received 
many  telegrams  from  St.  Louis,  protesting  against  the  arbitrary  action  of 
the  retiring  postmaster-general.  He  desired,  if  possible,  to  make  a  joint 
call  with  Senator  Warner  upon  Postmaster-General  Meyer.  Senator 
Warner  is  not  in  town,  so  Senator  Stone  went  to  the  Postoffice  Department 
alone.  He  called  upon  Third  Assistant  Madden,  who  said  the  matter  had 
been  taken  out  of  his  hands,  and  that  he  could  do  nothing.  Senator  Stone 
then  addressed  a  letter  to  Postmaster-General  Meyer,  a  copy  of  which  was 
given  to  the  press.  He  says:  "It  is  simply  amazing  that  Mr.  Cortelyou 
siiould,  in  the  very  hour  of  his  retirement,  make  an  order  declaring  the 
journals  of  the  Lewis  Publishing  Company  were  published  at  a  mere 
nominal  rate  and  primarily  for  advertising  purposes.  I  make  no  charge 
against  anyone,  but  I  do  say  that  for  an  executive  official  to  make  such  an 
order  and  thus  destroy  property  valued  at  millions  of  dollars,  in  which 
thousands  of  honorable  citizens  are  interested,  smacks  of  tyranny  and 
rank  injustice.  I  wish,  as  representative  of  Missouri,  and  above  that,  as 
an  American  citizen,  to  enter  protest  against  this  autocratic  and  arbitrary 


660  THE  SIEGE  OF  UNIVERSITY  CITY 

edict.  I  desire  to  ask  you  to  take  this  matter  up  and  review  it,  to  the 
end  that  justice  may  be  done  to  the  thousands  who,  I  believe,  have  been 
grossly  wronged. 

The  result  of  an  appeal  to  Senator  Beveridge  of  Indiana,  long 
recognized  as  the  friend  of  Lewis,  but  also  known  to  enjoy  the 
fullest  confidence  of  the  Administration,  affords  an  illustration  of 
the  difficulty  in  bringing  to  bear  effective  pressure  against  the  ex- 
campaign  manager  of  the  party  in  power.  It  elicited  a  personal 
reassurance  of  sympathy.  This,  hoAvever,  was  offset  by  a  protes- 
tation of  absolute  faith  in  Cortelyou.     Senator  Beveridge  says: 

Dear  Mr.  Lewis:  I  have  been  unable  to  follow  jour  controversy  with 
the  Postoffice  Department  recently,  and  do  not  know  anything  about  the 
ruling  to  which  you  refer  in  your  letter  of  March  5.  I  also  regret  to  say 
that  I  have  been  so  busy  that  I  have  not  had  a  chance  recently  to  look 
over  the  paper.  The  closing  days  of  the  session  have  kept  me  at  work 
all  day  and  practically  all  night  all  of  the  time.  I  am  under  the 
impression  that  you  have  been  hardly  dealt  with  and,  as  you  know,  I  have 
done  everything  I  could  for  you.  I  am  at  a  loss  to  understand  it  all,  for 
my  faith  in  Mr.  Cortelyou,  whom  I  have  known  for  many  years,  is 
absolute. 

On  March  6,  1907,  Postmaster  Wyman  had  the  pleasure  of  offi- 
cially notifying  Lewis  that  the  application  submitted  by  him  on 
August  2,  1902,  for  entry  of  the  Woman's  Magazine  as  second-class 
matter,  had  been  denied,  and  the  second-class  mailing  privilege 
theretofore  extended  the  Woman's  Farm  Journal  had  been  with- 
drawn and  the  order  granting  same  revoked.  Lewis  was  further  ad- 
vised that  the  postmaster's  action  in  charging  excess  postage  on 
the  two  publications  had  been  sustained,  and  that  a  demand  for  the 
amount  still  due  would  be  submitted  in  detail  within  the  next  few 
days. 

THE    "shot-gun    letter." 

Here  the  plot  shifts  to  the  court  of  Caesar,  to  whom  the  actors 
in  this  American  drama  now  made  bold  to  appeal.  This  is  a  scene 
in  which  tears  and  laugliter,  pathos  and  tragedy,  are  strangely 
blended.  Enter  a  congressman,  acting  the  part  of  clown;  the 
President  of  the  United  States  in  tlie  role  of  Cassar;  a  Swedish 
nobleman,  a  former  subject  of  the  King  of  Sweden  and  accredited 
Swedish  vice-consul  to  the  fourth  city  of  the  United  States,  as  am- 
bassador to  Caesar.  The  ambassador  is  attended  by  a  committee 
of  citizens  bearing  to  Caesar,  in  behalf  of  a  Middle  Western  Ameri- 
can city,  a  petition  demanding  justice  for  an  American  business 
enterprise.  First  comes  the  clown,  as  "pathfinder."  He  seeks  to 
make  appointment  for  an  audience  for  the  ambassador.  Blunder- 
ingly he  presents  to  Caesar  a  private  letter,  not  intended  for  the 
august  eye.  This  voices  all  too  emphatically  the  citizen's  righteous 
indignation.  It  is  damned  in  particular  by  the  unhappy  phrase: 
"It  seems  now  that  we  can  hope  for  no  fairness  or  justice  in  this 
matter,  except  at  the  muzzle  of  the  shot-gun."  The  "shot-gun"  letter 
inflames  the  wrath  of  Caesar  beyond  all  bounds.  He  forthwith 
prejudges  the  case.     The  ambassador  is  spurned.     The  petition  is 


THE  DREYFUS  CASE  OF  AMERICA  661 

cavalierly  referred  to  the  postmaster-general.  The  ambassador, 
incautiously  indignant,  then  in  his  own  proper  person  addresses 
the  throne.  He  remarks,  in  substance,  that  his  own  king,  Oscar, 
would  receive  a  petition  at  the  hand  of  the  humblest  peasant  in 
Sweden,  though  the  sujDplicant  came  barefooted  before  the  throne. 
He  convicts  himself  of  "lese  majeste,"  by  inquiring  "by  what 
manner  of  reason"  the  President  of  the  greatest  democracy  of  the 
world  dares  refuse  to  receive  the  petition  of  the  citizens  of  the 
fourth  city  of  America.  Again,  the  wrath  of  Caesar  is  at  white  heat. 
And  he  is  no  mean  actor  when  he  assumes  the  centre  of  the  stage. 
Through  the  State  Department  he  demands  the  ambassador's  head. 
The  latter's  exequatur  as  vice-consul  is  canceled.  He  is  forced  to 
submit  a  most  humble  apology.  His  exequatur  is  tardily  restored. 
The  whole  scene  thus  far,  despite  its  seriousness,  smacks  more  of 
farce  comedy,  even  of  buffoonery,  than  of  its  actual  earnest.  But 
now  the  iron  has  entered  the  ambassador's  soul.  He,  a  Swedish 
nobleman,  has  been  humiliated.  The  shame  of  that  humiliation  is 
more  than  he  can  endure.  He  returns  to  his  home  in  St.  Louis  and 
after  an  interval,  kills  himself.  Thus  the  curtain  falls.  The  tra- 
gedy, after  all,  is  real.  The  Siege  of  University  City  thus  takes  its 
first  toll  of  human  life. 

Does  this  brief  outline  reveal  the  plot  of  a  comic  opera?  No! 
It  presents,  instead,  with  substantial  accuracy,  the  fact  of  the  re- 
fusal by  President  Roosevelt  to  entertain  a  petition  in  Lewis' 
behalf,  representing  fifteen  thousand  citizens  of  St.  Louis.  The 
part  of  clown,  oddl}'^  enough,  was  played  by  Congressman  Richard 
Bartholdt,  one  of  the  most  eminent  and  able  members  of  the  Na- 
tional House  of  Representatives.  The  "shot-gun"  letter  was  ad- 
dressed to  Bartholdt  personally.  Had  he  communicated  its  sub- 
stance to  President  Roosevelt  in  diplomatic  fashion,  the  petition 
of  the  citizens  of  St.  Louis  doubtless  Avould  have  been  accepted  by 
the  President.  It  might  even  have  led  to  a  reversal  of  Cortelyou's 
decision.  Improbable  as  this  episode  may  seem,  it  can  be  verified. 
Lewis,  on  IMarch  5,  had  written  Bartholdt  thus: 

This  outrage,  so  palpably  an  act  of  revenge  for  the  urging  of  the 
Crumpacker  bill,  will  raise  a  storm  of  indignation  and  protest  that  will 
seriously  affect  the  next  national  election.  I  understand  that  prominent 
business  men  of  St.  Louis  are  now  circulating  petitions,  to  which  will  be 
appended  thousands  of  signatures  of  the  leading  men  of  the  city,  urging 
the  incoming  postmaster-general  to  give  us  fair  treatment.  The  more 
than  two  hundred  thousand  subscribers  of  our  publications  in  Missouri, 
besides  its  Missouri  stockholders,  will  not  let  this  matter  rest.  Nor  will  the 
two  millions  of  subscribers  in  other  states  and  cities.  We  have  never 
asked  anything  but  justice.  That  is  all  we  ask  now.  We  urge  upon  you 
that  we  may  have  some  expression  from  you  as  to  this  matter,  and  that  you 
immediately  take  it  up  direct  with  President  Roosevelt  and  ask  him  for 
a  square  deal. 

Telegrams  from  Bartholdt  on  March  6  report  interviews  witK 
Congressman  Crumpacker,  Judge  Goodwin,  ]\Iadden,  the  postmas- 
ter-general, and  the  President  himself.     He  states  that  a  written 


662  THE  SIEGE  OF  UNIVERS1T.Y  CITY 

brief   was   being   prepared   for   presentation  to   the    President   and 
Postmaster-General  Meyer.     On  March  9  he  wires: 

Had  jour  proposition  in  postmaster-general's  hands  before  Cabinet 
meeting  this  morning.  First  conferred  with  Senator  Warner,  who  joined 
me  in  urging  acceptance.  Suggest  that  you  appeal  to  President  direct  on 
behalf  of  company.  Do  so  by  wire,  urging  reconsideration,  and  meanwhile 
acceptance  of  your  publications. 

Answering  this  went  the  famous  "shot-gun"  letter.  In  it  Lewis 
says : 

Tomorrow  at  noon  the  officers  and  directors  of  the  thirty  business  organi- 
zations of  St.  Louis  are  to  visit  our  plant  in  a  body,  to  frame  a  united 
protest  from  the  city  of  St.  Louis  to  be  forwarded  to  President  Roosevelt. 
I  am  in  receipt  of  telegrams  and  offers  of  assistance  running  into  thou- 
sands of  dollars.  These  are  made  by  publishers  and  business  men  through- 
out the  country.  All  are  determined  that  this  thing  shall  be  fought  to 
the  bitter  end.  I  have  refrained,  heretofore,  from  publishing  the  matters 
in  connection  with  the  traffic  in  fraud  orders  by  Judge  Goodwin  and  his 
brother,  Leonard  Goodwin,  regarding  which  we  have  had  documentary 
evidence  for  more  than  a  year.  Jt  seems  now  as  thouffh  we  can  hope  for 
no  fairness  or  justice  in  this  matter,  except  at  the  muzzle  of  the  shot-gun. 
We  propose  to  show  that  not  only  have  men  and  concerns  in  all  parts  of 
America  been  blackmailed  and  mulcted  of  tens  of  thousands  of  dollars  by 
the  Goodwin  brothers,  but  that  Cortclyou  was  aware  of  this  over  a  year 
ago.  Wherever  a  fraud  order  was  threatened,  there  appeared  Leonard 
Goodwin  with  a  guarantee  of  immunity  on  the  pavment  of  a  fee  ranging 
from  ?.500  to  $10*000.  This  fight  has  not  yet  started.  If  we  may  judge 
from  letters  and  telegrams  from  all  parts  of  America,  this  thing,  unless 
immediately  set  right  by  Roosevelt  giving  us  a  square  deal,  is  going  to 
overthrow  the  Republican  party  at  the  next  national  election.  You  can 
have  no  conception  of  the  intense  feeling  already  aroused.  The  people  are 
just  now  beginning  to  grasp  the  meaning  of  this  terrible  outrage.  You 
will  have  the  united  support  of  the  entire  State  of  Missouri  in  your  efforts 
to  right  this  wrong.  General  public  sentiment  seems  to  be  divided  as  to 
our  ability  to  get  a  square  deal  from  President  Roosevelt.  Many  believe 
he  will  stand  by  his  friend  Cortelyou,  regardless  of  right.  Will  he,  after 
all  his  public  pledges  of  a  square  deal  to  every  man,  permit  this  outrage 
to  stand  uncorrected? 

This  is  the  letter  Bartholdt  Tmwittingly  placed  in  the  hands  of 
President  Roosevelt.  The  President's  reply  has  been  set  at  the 
opening  of  this  present  chapter.  Lewis,  on  receipt  of  a  copy  of 
the  President's  decision,  protested  to  Bartlioldt  that  his  letter  had 
not  been  intended  for  Roosevelt's  eyes,  and  that  its  contents  had 
been  totally  misconceived.  Bartholdt,  then,  in  a  vain  attempt  to 
placate  the  President,  addressed  to  him,  on  March  21,  a  manly  and 
convincing  letter,  which  almost  compels  the  retraction  of  the  term 
"clown"  as  applied  to  so  brilliant,  distinguished  and  well-inten- 
tioned a  personage  as  Congressman  Bartholdt.  But  to  retract  the 
term  would  be  to  spoil  the  story.  So  it  will  be  allowed  to  stand, 
with  the  most  humble  apologies  of  the  writer. 

It  would  be  interesting  here  to  Ixave  answered  this  pertinent 
query:  Was  the  wrath  of  Caesar  simulated  for  effect?  Or  was  it, 
indeed,  the  prime  motive  of  the  decision?  Bartholdt  was  not  Lewis' 
only  friend  at  court.  Tlie  evidence  of  this  came  thus  in  daily  bul- 
letins: 


THE  DREYFUS  CASE  OF  AMERICA  663 

March  9.— Loeb  today  said  nothing  had  been  done  by  the  President  in 
our  case,  and  nothing  will  be  done.  So  don't  look  for  justice  in  that 
quarter.  Cortelyou  is  all-powerful  with  Roosevelt.  The  postmaster- 
general  will  not  talk  until  Monday  at  three.  He  will  then  have  thoroughly 
acquainted  himself  with  the  Department's  side  of  the  case. 

March  11.— Cannot  see  President  until  Wednesday.  Understand  White 
House  is  hearing  from  your   friends. 

March  13.— Engagement  with  President  postponed.  In  event  of  hear- 
ing, would  like  you  to  present  case.     You  can  do  better  than  anyone  else. 

March  14. — President  doesn't  see  how  he  can  reopen  and  review  case, 
but  will  speak  to  Meyer  tomorrow.  Cortelyou  will  be  on  hand  to  oppose. 
I  suggested  that  Meyer  suspend  debarring  magazines  until  further  hearing. 
He  feared  that  would  mean  reversal  of  Cortelyou.  He  promised  to  con- 
sult Meyer;  nothing  more. 

Then,  under  date  of  March  14,  Lewis  received  from  his  Wash- 
ington correspondent  the   following  letter: 

I  have  just  had  an  interview  with  President  Roosevelt.  He  announced 
that  he  could  not  take  up  and  review  the  magazine  case.  He  says  that 
Cortelyou  mentioned  the  matter  to  him  before  making  the  decision,  and 
he  told  Cortelyou  to  be  sure  that  he  was  right.  He  expressed  himself  as 
unwilling  to  have  the  whole  matter  reviewed,  because  it  would  take  up 
so  much  of  his  time.  I  told  him  that  Cortelyou  was  wrong  on  this« 
question;  that  he  was  unfair,  and  that  if  he  (the  President)  would  take  up 
the  subject  of  nominal  prices  for  publications  he  would  find  that  McClure's 
and  Munsey's  were  as  nearly  nominal  at  ten  cents  a  month,  compared  to 
the  cost  of  production,  as  tlie  Lewis  magazines  are  at  ten  cents  a  year. 
This  rather  jarred  him.  He  asked  about  the  same  subject  again.  He  said 
it  was  all  a  great  question.  I  replied  that  it  was  well  worth  his  time  to 
consider,  since  there  was  so  much  involved. 

I  told  him  that  you,  like  himself,  would  fight,  and  fight  to  the  end.  I 
said:  "It  will  be  what  you  call  a  bully  fight,  Mr.  President,  and  I  want 
you  to  know  that  I  go  with  Lewis  and  that  I  believe  he  is  right.  He  is 
going  to  make  the  same  fight  you  would  make  under  like  circumstances. 
He  has  been  with  you  in  many  of  your  fights.  I  think  he  likes  you.  But 
this  is  a  case  where  he  must  fight  for  his  existence.  It  will  be  a  hot  one." 
He  said  he  appreciated  a  fighter  as  much  as  anyone.  Then  he  promised 
to  take  the  matter  up  with  Meyer,  but,  of  course,  I  know  that  he  will  have 
Cortelyou  there,  advising  him.  I  could  see  that  he  hesitated,  on  Cortel- 
you's  accoimt.  He  feels  that  to  reopen  the  case  will  be  to  discredit  Cor- 
telyou. That  is  the  hardest  nut  to  crack.  If  Cortelyou  had  gone  out  of 
the  Cabinet,  I  am  certain  that  a  rehearing  and  reversal  could  be  procured. 

PETITION   OF   ST.   LOUIS    BUSINESS    MENs'    ASSOCIATIONS. 

Come  now  the  citizens  of  St.  Louis,  headed  by  L,  D.  Kingsland, 
president  of  the  St.  Louis  Manufacturers'  Association,  in  united 
action.  The  first  step  taken  is  the  formation  of  a  committee,  headed 
by  C.  A.  Ekstromer,  then  Swedish  vice-consul  at  St.  Louis,  repre- 
senting the  heads  of  the  principal  business  and  commercial  bodies 
of  the  "Fourth  City."  These  embraced  a  total  of  some  fifteen 
thousand  citizens  and  tax-payers.  This  committee  was  instructed 
to  repair  forthwith  to  Washington  and  submit  to  President  Roose- 
velt, personally,  the  protest  of  these  citizens  against  the  arbitrary 
action  of  the  Administration  in  destroying  one  of  the  most  notable 
industries  of  St.  Louis.  Preparations  were  being  made  to  carry 
out  these  instructions,  when,  on  March  21,  came  word  that  the 
President,  because  of  the  "shot-gun"  letter,  would  neither  receive  the 
committee  nor  take  up  in  any  form  the  matter  of  revoking  Cortel- 


664-  THE  SIEGE  OF  UNIVERSITY  CITY 

you's  order.  Chairman  Ekstromer,  however,  was  not  to  be  thus 
put  aside.  Armed  with  his  appeal,  he  went  on  to  Washington  in 
the  full  belief  that  the  right  of  petition  could  not  be  denied,  even 
the  humblest  citizen,  much  less  the  fourth  city  in  the  United  States. 
In  this  he  was  mistaken.  Under  date  of  INIarch  23  he  wired  Lewis 
as  follows:  "The  doctor  has  spoiled  everything.  Forced  to  leave 
memorial  with  Loeb.  Letter  follows."  Then  follows  this  communi- 
cation of  even  date,  postmarked  New  York  City: 

I  have  telegraphed  you  that  the  doctor  has  spoiled  everything.  Of 
course  you  understood  whom  I  meant  by  that,  namely,  Bartholdt.  Mr. 
Dunn  showed  us  the  correspondence  between  yourself  and  Bartholdt, 
and  the  President's  letter.  We  felt  that  it  was  almost  useless  to  visit 
the  White  House,  but  we  did  go  there  and  saw  Mr.  Loeb.  He  simply 
told  us  that  the  President  would  have  nothing  to  do  with  the  Lewis  matter. 
Roosevelt  knew  that  we  were  coming,  and  had  given  instructions  to  Loeb 
that  he  would  not  see  us  under  any  circumstances. 

I  stood  on  my  dignity  as  an  American  citizen,  representing  fifteen 
thousand  citizens  of  St.  Louis  and  twenty-one  mercantile  and  manufacturing 
organizations.  I  told  him,  absolutely,  that  we  did  not  represent  E.  G. 
Lewis,  but  only  the  St.  Louis  associations,  signers  of  the  memorial.  He 
replied:  "You  put  it  well,  but  you  can't  see  the  President."  I  am  sorry 
more  was  not  accomplished.     We  did   all  we  could. 

Summing  up  the  case  came  this  message,  dated  March  21,  from 
the  Washington  correspondent  of  the  Woman's  National  Daily: 

I  have  just  wired  rou  the  President's  refusal  to  see  the  St.  Louis 
delegation.  I  am  unable,  since  the  interview  referred  to  in  his  letter  to 
Bartholdt,  to  see  the  President  myself.  I  saw  Loeb  today,  to  arrange  a 
hearing  for  the  St.  Louis  committee.  I  did  my  best  to  present  the  matter 
in  a  favorable  light.  He  went  to  see  the  President  while  I  waited.  When 
he  came  out  he  said  the  President  would  not  see  anyone  in  connection 
with  the  Lewis  matter.  He  further  said  there  would  be  no  revocation  of 
Cortelyou's  order  during  this  administration,  and  that  Lewis  must  look  to 
the  courts  for  redress.  The  president  seems  to  be  still  incensed  at  your 
"shot-gun"  letter. 

I  judge  from  what  Loeb  says  that  the  attacks  upon  Cortelyou  have 
also  angered  him.  The  President  had  Cortelyou  for  his  secretary  for 
two  years.  Then  he  made  him  Secretary  of  Commerce  and  Labor,  and 
chairman  of  the  Republican  National  Committee  in  1904.  He  retained  a 
man  as  postmaster-general  for  several  months,  so  that  Cortelyou  might 
have  that  place  when  he  was  through  with  his  campaign  work.  Then, 
upon  the  retirement  of  Secretary  Shaw,  he  appointed  Cortelyou  to  the 
second  highest  Cabinet  place.  Cortelyou  can  get  to  the  President  any  hour, 
day  or  night.  He  can  thus  command  the  President's  entire  confidence.  I 
judge  from  what  Loeb  says  that  the  President  is  determined  in  his  con- 
clusions. 

THE    EKSTROMER    TRAGEDY. 

Had  Ekstromer  been  made  of  such  stuif  as  to  suffer  indignity  in 
silence,  he  would  have  been  content  to  let  bad  enough  alone.  But 
a  brave  man  will  not  seek  to  save  his  life  by  keeping  out  of  battle. 
This  lion-hearted  Swedish-American  had  the  temerity  to  take  to 
task  the  most  powerful  ruler  on  earth.  Thus,  as  the  sequel  shows, 
he  signed  the  warrant  of  his  own  death.  This  letter  from  Ekstrom- 
er to  Roosevelt,  dated  April  7,  1907,  has  never  before,  as  far  as 
the  writer  can  ascertain,  been  given  to  the  public.     Ekstromer  said: 


THE  DREYFUS  CASE  OF  AMERICA  665 

On  March  22,  with  David  P.  Leahy,  I  made  an  attempt  to  deliver  to 
you  a  memorial  bearing  on  the  ruling  of  former  Postmaster-General 
George  B.  Cortelyou,  regarding  two  of  the  publications  issued  by  the 
Lewis  Publishing  Company  in  St.  Louis.  Mr.  Lealiy  and  I  comprised  a 
committee  sent  to  deliver  this  memorial  to  you  as  President  of  the  United 
States  by  twenty-one  manufacturing,  mercantile  and  civic  organizations 
in  St.  Louis.  These  different  organizations  probably  represent  twelve  or 
fifteen  thousand  American  citizens.  In  other  words,  these  twelve  or  fifteen 
thousand  American  citizens  desired  to  petition  you  direct  in  a  matter  which 
they  deem  of  vital  importance  to  the  city  in  which  they  live.  We  were 
informed  by  Mr.  Loeb  that  you  would  not  receive  us,  nor  could  we  deliver 
to  you,  in  person,  this  petition. 

Spealiing  for  myself,  I  desire  to  state  that  while  a  Swede,  I  am  an 
American  citizen  of  the  same  political  faith  as  yourself.  I  hold  from  you, 
over  the  signature  of  your  secretary  of  state,  Mr.  Elihu  Root,  the  exequatur 
from  the  Department  of  State  as  vice-consul  for  Sweden  in  St.  Louis. 
I  speak  of  this  so  that  you  may  feel  assured  that  I  have  some  knowledge 
of  the  courtesy  due  a  citizen  from  the  President,  or  the  courtesy  accorded 
to  a  Swede  by  his  King.  Let  me  tell  you,  if  your  name  were  Ole  Olson 
and  you  were  known  to  be  only  a  peasant,  living  in  a  hut,  that  on  present- 
ing yourself  at  the  palace  in  Stockholm  at  eleven  o'clock  in  the  morning 
of  any  week  day  in  the  year  (when  he  was  in  the  palace  and  well)  you 
would'  have  no  trouble  whatever  in  seeing  and  talking  to  King  Oscar  per^ 
sonally.  More  especially  could  you  see  him  if  you  had  a  grievance  or 
petition  to  present.  Remember,  I  only  speak  for  Sweden.  There  they 
have  no  anarchists,  such  as  abound  in  Russia;  neither  have  they  secret 
police,  such  as   I  have  heard  stated  find  homes  in  Washington. 

I  have  lived  in  the  United  States  a  great  many  years,  and  would  not 
care  to  live  elsewhere.  But  I  have  always  imderstood  that  the  right  to 
petition  the  President  was  the  inalienable  prerogative  of  every  citizen  of 
this  Republic.  I  should,  therefore,  like  to  ask  you  by  what  manner  of 
reason  you  arrived  at  the  conclusion  to  issue  orders  to  your  secretary  to 
deny  me  and  my  conferee  the  privilege  of  delivering  the  memorial  hi 
question,  into  your  own  hands? 

Next  day,  Ekstromer's  report  was  made  to  a  mass  meeting  of  the 
indignant  signers  of  the  discredited  memorial.  Once  more  his  name, 
as  chairman,  was  attached  to  a  ringing  resolution,  as  follows,  and 
transmitted  to  the  White  House: 

Mr.  President:  At  a  meeting  of  manufacturing,  commercial  and  civic 
organizations,  held  April  3,  called  to  take  action  on  the  Lewis  matter,  a 
report  was  made  by  the  committee  which  was  sent  to  Washington  to  present 
a  memorial  on  the  subject  to  you,  and  the  following  resolution  was  adopted: 

Whereas,  A  committee  representing  twenty-one  commercial  and  indus- 
trial organizations  of  St.  Louis  was  authorized  and  instructed  to  present 
to  the  President  of  the  United  States  a  memorial,  asking  for  his  investi- 
gation of  the  charges  brought  against  the  Lewis  Pulilishing  Company;  and. 

Whereas,  The  memorial  was  sent  through  this  committee  to  the  Presi- 
dent asking  simply  a  square  deal  for  the  Lewis  Publishing  Company,  the 
largest  establishment  of  its  kind  in  the  world;  and. 

Whereas,  The  President  of  the  United  States  refused,  absolutely,  to 
receive  the  representatives  of  the  commercial  and  industrial  organizations 
of  St.  Louis;  and. 

Whereas,  It  is  one  of  the  vested  rights  of  all  the  American  people  to 
have  the  privilege  of  petitioning  the  Chief  Magistrate  of  this  country: 

Therefore,  P'esolved,  That  we  view  with  alarm  any  prestige  that  this 
act  of  the  President  may  have,  and  deplore  most  emphatically  his  refusal 
to  receive  the  representatives  of  this  city  in  their  efforts  to  right  what 
may  have  been  a  great  wrong;   and. 

Be  it  further  Resolved,  That  a  copy  of  these  resolutions  be  mailed  to 


666  THE  SIEGE  OF  UNIVERSITY  CITY 

the  President  of  the  United  States,  so  that  he  may  know  the  aggrieved 
feelings  of  the  people  of  St.  Louis. 

Two  weeks  later,  all  the  St.  Louis  dailies  were  agog  with  the  news 
that  Ekstromer's  pleas  for  Lewis  had  cost  the  St.  Louis  vice-con- 
sul of  Sweden  his  official  position.  Some  months  thereafter 
Ekstromer  was  reinstated.  Still  later  he  committed  suicide,  affected, 
it  is  believed,  by  the  discredit  brought  to  his  friends  and  family  in 
Sweden  by  this  unhappy  affair. 

Roosevelt's  arbitrary  attitude  left  Lewis  no  recourse  but  the 
courts.  He  at  first  proposed  to  institute  mandamus  proceedings  in 
the  courts  of  the  District  of  Columbia,  in  an  effort  to  obtain  an  im- 
partial review  of  Cortclyou's  ruling.  This  was  advised  against, 
with  the  result  that  a  bill  in  equity  was  filed  in  the  circuit  court  of 
the  city  of  St.  Louis.  This  cause  was  entitled  The  Lewis  Publish- 
ing Company  vs.  Frank  Wyman  and  James  L.  Stice.  The  court 
was  asked  to  restrain  the  defendants  from  putting  into  effect  the 
order  of  the  postmaster-general  excluding  the  Woman's  Magazine 
and  Woman's  Farm  Journal  from  the  mails.  The  case  was  subse- 
quently removed  to  the  circuit  court  of  the  United  States  for  the 
Eastern  Division  of  the  Eastern  Judicial  District  of  Missouri.  A 
temporary  restraining  order  was  issued,  and  a  hearing  ordered.  A 
motion  to  dismiss  the  case  was  overruled. 

INJUNCTION    PROCEEDINGS. 

The  opinion,  filed  by  Judge  Jacob  Trieber,  is  a  landmark,  not 
only  in  the  story  of  the  Siege,  but  also  in  the  history  of  postal  leg- 
islation. The  court,  after  reviewing  the  facts  touching  the  appli- 
cation of  the  Woman's  Magazine  for  entry  to  the  second-class  mails, 
on  the  occasion  of  the  change  of  the  name  from  the  Winner,  on 
April  2,  1902,  sustained  the  contention  of  the  Department.  The 
opinion  of  the  court  thus  concludes: 

It  has  been  determined  in  the  case  of  the  Woman's  Farm  Journal  that 
there  was  no  hearing,  and  as  the  facts  in  the  case  are  identical,  the  same 
conclusion  would  naturally  be  reached,  if  the  second-class  privilege  had 
ever  been  granted.  The  grounds  for  the  claim  are  that  the  Magazine  was 
permitted  to  go  through  the  mail  ever  since  August,  1903,  at  second-class 
rates;  that  the  temporary  permit  has  never  been  revoked;  that  the  notice 
on  the  Magazine,  printed  in  compliance  with  the  law,  showed  that  the 
privilege  granted  to  "The  Winner"  is  claimed  as  the  authority  for  this 
magazine;  that  the  notice  sent  on  June  5,  1905,  was  that  the  complainant 
"show  cause  why  the  authorization  for  admission  of  the  Woman's  Magazine 
to  the  second  class  of  mail  matter,  under  the  act  of  March  3,  1879,  should 
not  be  revoked,"  and  that  the  letter  of  April  19,  1906,  notifying  the  com- 
plainant of  the  day  set  for  hearing  on  its  appeal  from  the  action  of  the 
postmaster  in  determining  that  the  subscriptions  to  the  Woman's  Maga- 
zine did  not  exceed  five  hundred  and  thirty-nine  thousand,  nine  hundred 
and  one  copies,  also  recognized  the  fact  that  the  second-class  privilege 
had  been  granted.  For  these  reasons,  it  is  claimed  that  complainant  pos- 
sessed that  privilege  and  that  it  could  not  be  revoked  without  a  hearing, 
in  conformity  with  the  act  of  March  3,  1901.  *  *  *  Whatever  the  effpct  of 
the  actions  of  the  Department  officers,  as  herein  recited  might  be,  if  per- 
formed by  officers  of  private  corporations,  or  individuals,  or  their  agents, 
is  immaterial,  for  the  law  is  well  settled  that  the  Government  cannot  be 
estopped    by    any    unauthorized    acta    of   its    officers,    or    their    mistakes. 


THE  DREYFUS  CASE  OF  AMERICA  667 

Laches  is  not  imputable  to  the  Government  in  its  character  as  sovereign 
by  those  subject  to  its  dominion.  *  *  *  It  is  conclusively  shown  that  no 
permit  had  ever  been  granted  allowing  the  Woman's  Magazine  the  second- 
class  rate  privilege,  except  the  temporary  permit,  and  that  provides 
specifically  that  the  permission  is  only  granted  "until  the  Postoffice  De- 
partment shall  determine  whether  it  is  admissible  as  second-class  matter." 
The  only  determination  by  the  Department  is  made  on  March  4,  1907, 
refusing  it.  As  the  law  does  not  require  the  Department  to  grant  a  hear- 
ing on  that  question,  none  was  necessary,  and  as  there  is  no  provision  of 
law  for  reviewing  the  action  of  the  postmaster-general,  the  injunction 
prayed  must  be  refused. 

On  April  25,  a  motion  for  a  temporary  injunction,  pending  an 
appeal,  was  denied.  A  demurrer  of  the  defendants  to  the  plain- 
tiff's complaint  was  likewise  overruled,  and  time  was  extended  on 
sundry  occasions  thereafter  for  the  taking  of  testimony.  Thus,  the 
cause  was  protracted  until  April  22,  1908,  when  a  motion  of  the 
defendants  to  dismiss  the  cause  was  filed.  This  motion  was  over- 
ruled on  June  9.  Further  time  was  extended  for  taking  proofs, 
until  September  15,  1908,  when  a  notice  for  trial  was  served  by 
counsel  for  the  complainant.  Further  technicalities  intervened, 
postponing  the  issue  until  January  23,  1909,  when  sundry  deposi- 
tions were  filed  with  the  court.  On  these,  the  cause  was  submitted. 
The  case  finally  came  up  for  review  in  the  United  States  Circuit 
Court  of  Appeals,  Eighth  Circuit,  as  No.  3038,  May  term,  1910, 
before  Sanborn  and  Hook,  circuit  judges,  and  Amidon,  district 
judge.  The  upshot  was  not  unlike  that  of  the  celebrated  case  of 
Jarndyce  vs.  Jarndyce,  which  readers  of  Dickens'  "Bleak  House" 
will  remember,  was  brought  to  an  end  only  after  the  assets  of  the 
litigants  had  been  eaten  up  by  the  costs.  After  dragging  its  weary 
way  through  the  courts  for  four  years  and  two  months.  Judge  Hook 
delivered  the  final  opinion.  The  court  rules,  in  substance,  that  there 
is  no  longer  anything  for  it  to  decide.  As  though  their  Honors 
appreciated  the  humor  of  the  situation  and  were  aware  that  even 
the  parties  at  interest  might  have  forgotten  what  the  case  was  about, 
the  opinion  was  preceded  by  the  following  summary: 

This  suit  was  begun  March  18,  1907,  by  the  Lewis  Publishing  Company, 
the  publisher  of  the  Woman's  Magazine,  against  Frank  Wyman  and  James 
L.  Stice,  respectively,  the  postmaster  and  assistant  postmaster  at  St.  Louis, 
Missouri,  to  enjoin  them  from  depriving  it  of  the  right  to  send  its  publi- 
cation through  the  mails  as  second-class  matter  at  the  postage  rate  of  one 
cent  per  pound.  The  bill  of  complaint  contains  a  prayer  that  the  court 
ascertain  and  adjudge  the  amount  of  complainant's  subscription  list  for 
the  months  from  September,  1905,  to  March,  1907,  and  that  defendants  be 
perpetually  enjoined  from  interfering  with  its  enjoyment  of  the  second- 
class  mail  privilege,  according  to  the  extent  and  limits  thereof,  as  ascer- 
tained and  decreed  by  the  court.  There  was  also  a  prayer  for  general 
relief.  An  application  for  a  temporary  injunction  was  denied,  and  upon 
final  hearing  the  bill  of  complaint  was  dismissed.  The  complainant 
appealed.  *  *  * 

The  decision  of  the  postmaster-general  proceeded  upon  the  assumption 
that  the  case  was  one  of  an  original  application  for  entry  of  the  publication 
as  second-class  matter,  instead  of  one  concerning  an  entry  previously! 
accorded.  But,  whatever  the  true  situation  in  this  respect  may  have  been, 
and  whether  a  legal  hearing  was  had,  are  questions  that  need  not  now  be 


668  THE  SIEGE  OF  UNIVERSITY  CITY 

determined.  After  the  order  complained  of  was  made  by  the  postmaster- 
general,  and  while  this  suit  was  pending  in  the  circuit  court,  complainant 
made  another  application  for  entry,  and  upon  compliance  with  certain 
requirements  of  the  Department  it  was  granted.  Complainant  has  ever 
since  enjoyed  the  privilege.  Manifestly,  therefore,  whether  it  has  been 
previously  accorded,  and,  if  so,  whether  it  was  annulled  without  a  hearing, 
are  moot  questions.  The  functions  of  a  judicial  tribunal  do  not  extend  to 
the  declaration  of  abstract  principles  of  law,  or  the  determination  of 
questions  of  fact  not  involved  in  actual  controversy.  When  the  element 
of  controversy  disappears  from  a  case,  through  a  cliange  of  circumstances 
or  by  the  act  of  the  parties,  the  case  will  be  dismissed. 

After  commenting  on  sundry  technical  questions  raised  by  the  plead- 
ings, as  to  which  the  student  is  referred  to  the  official  record,  the  court  says: 
"But  these  questions  need  not  be  determined.  *  *  *  There  is  nothing  of  an 
equitable  character  in  the  cause  of  action  or  the  defense.  *  *  *  The  prayer 
for  general  relief  means  relief  agreeable  to  the  case  made  in  the  bill.  •  *  • 
The  dismissal  of  the  complainant's  bill  should,  however,  have  been  without 
prejudice  to  its  rights  at  law,  in  respect  to  the  excess  payments  of  the 
postage  and  the  bonds.  The  case  is  remanded  to  the  circuit  court  for  the 
modification  of  the  decree  accordingly,  and  as  so  modified  the  decree  is 
affirmed." 

Sanborn's  dissenting  opinion. 

All  of  which  means  simply  that  the  Lewis  Publishing  Company 
spent  some  thousands  of  dollars,  seeking  relief  in  the  Federal  courts 
only  at  the  end  of  three  years  to  be  virtually  thrown  out  of  court, 
no  wiser  than  when  it  came  in.  A  dissenting  opinion,  however,  was 
rendered  in  this  case  by  Sanborn,  who  says: 

I  find  mj'self  unable  to  concur  in  the  opinion  of  the  majority  that  this 
has  become  a  moot  case,  or  that  the  complainant  has  a  remedy  at  law  so 
prompt  and  efficient  as  to  bar  relief  in  equity.  The  admissions  of  the 
defendants  and  the  evidence  in  this  case,  have  convinced  me  that  the 
Woman's  Magazine  was  admitted  to  transmission  in  the  mails  as  second- 
class  matter  in  October,  1902;  that  from  that  time  forward  the  complain- 
ant was  entitled,  under  the  repeated  rulings  of  the  officers  of  the  Postal 
Department  and  under  the  statutes  and  the  regulations  applicable  to  that 
Department,  to  the  transmission  of  sample  copies  of  the  Woman's  Magazine 
equal  in  number  to  the  copies  sent  to  legitimate  subscribers,  and  that 
these  copies  of  the  magazine  were  transmitted  as  second-class  matter  with 
the  knowledge,  consent  and  approval  of  the  officers  of  the  Postoffice  De- 
partment under  their  admission  of  October,  1902,  until  March  4,  1907. 
Those  officers  and  the  Government,  for  whom  they  were  authorized  to  act  in 
this  matter,  were  estopped  by  these  acts  from  denying  that  this  magazine 
was  entitled  to  the  benefits  of  transmission  as  second-class  matter  at  the 
pound  rate  of  postage. 

On  March  4,  1907,  without  any  notice  of  any  hearing  upon  the  question 
of  the  suspension  or  annulment  of  the  second-class  mail  privilege,  which 
the  complainant's  publication  has  been  admitted  to  enjoy,  after  a  hearing 
at  which  the  officer  of  the  Postal  Department  in  charge  thereof  informed 
the  complainant  that  the  only  question  then  to  be  heard  was  whether  or 
not  the  legitimate  subscriptions  to  the  Woman's  Magazine  exceeded  five 
hundred  and  thirty-nine  thousand,  nine  hundred  and  one,  and  at  which 
hearing  he  expressly  denied  the  request  of  the  complainant  to  see  or  to 
hear  and  to  know  the  evidence  against  it  upon  the  charge  that  was  on 
hearing,  and  at  which  this  officer  and  the  Department  withheld  from  the 
complainant  all  knowledge  of  this  evidence,  the  officers  of  the  Postoffice 
Department  suspended  and  annulled  the  second-class  privilege  that  had 
been  accorded  to  the  Woman's  Mag;izine  and  refused  to  accept  any  copies 
of  it  for  mailing  at  the  second-class  poimd  rate  of  postage.  This  order 
of  the  Department  was,  in  my  opinion,  beyond  its  powers  and  void  because 


THE  DREYFUS  CASE  OF  AMERICA  669 

it  was  made  without  the  notice  and  without  the  hearing  which  conditioned 
the  jurisdiction  of  the  officers  of  that  Department  to  make  it. 

The  evidence  in  this  record  and  the  admissions  of  the  defendants  in 
their  pleadings,  in  my  opinion,  render  the  defendants  liable  at  law  and 
also  in  equity  for  the  amount  of  these  deposits  in  excess  of  the  postage 
justly  due  on  account  of  the  claims  made  by  the  defendants.  To  my  mind 
the  facts  they  present  lead  unavoidably  to  the  conclusion  that  these  moneys 
and  bonds  were  extorted  from  the  complainant  without  lawful  authority, 
and  leave  the  defendants  without  jurisdiction.  While  they  may  be  liable 
at  law,  equity  has  concurrent  jurisdiction  with  the  law  in  all  cases  where 
a  long  and  complicated  account,  composed  of  numerous  items,  is  in  contro- 
versy. While  an  action  at  law  may  undoubtedly  be  maintained  for  the 
amount  to  which  the  complainant  is  entitled  here,  a  court  of  equity  has 
concurrent  jurisdiction  of  this  accounting.  And  such  a  court,  with  its 
deliberative  methods,  its  power  to  select  men  of  training  and  experience 
in  work  of  this  nature,  its  authority  to  consider  and  modify  their  reports 
after  exceptions  and  hearings,  is  alone  competent  to  take  fairly  and  to 
adjudicate  justly  the  balance  of  such  an  account.  The  remedy  at  law, 
which  necessitates  the  submission  of  such  questions  to  a  jury,  is  neither 
adequate  nor  as  efficient  to  attain  the  ends  of  justice  as  the  remedy  in 
equity,  and  it  cannot  bar  the  latter. 

Finally,  the  fact  that  the  complainant,  which  was  deprived  of  all  its 
rights  to  use  the  mails  during  the  months  of  April,  June,  July,  August, 
September,  October  and  November,  1907,  and  of  the  accounting  concerning 
the  return  of  the  amount  due  it,  on  account  of  its  deposits  ever  since  they 
v/ere  made,  succeeded  on  a  new  application,  made  in  September,  1907,  in 
obtaining  a  part  of  its  right  to  use  the  mails  since  December  17  in  that 
year,  does  not  appear  to  me  to  have  waived  its  right  to  the  accounting  and 
the  adjudication  of  the  amount  due  it  on  account  of  tlie  deposits  or  to  the 
determination  of  its  right  to  a  cancellation  of  its  bonds.  In  my  judgment 
the  decree  below  should  be  reversed  and  full  relief  in  equity  should  be 
granted  to  the  complainant  in  that  suit. 

In  other  words,  had  Hook  or  Amidon  happened  to  acquiesce  in 
Sanborn's  opinion,  instead  of  the  reverse,  the  Lewis  Publishing 
Company  would  have  recovered  from  the  Government,  not  only  the 
excess  postage  assessed  against  it  by  Postmaster  Wyman,  but  also, 
presumably,  damages  for  the  loss  sustained  by  the  exclusion  of  the 
Woman's  Magazine  from  the  mails  and  the  arbitrary  enforced  re- 
duction of  its  subscription  list,  on  condition  of  which  it  was  after- 
wards reinstated.  Such  are  the  law's  delays  and  the  possibilities 
of  the  miscarriage  of  justice,  to  which  the  citizen  is  rendered  liable 
where  abuse  of  administrative  power  compels  him  to  have  recourse 
to  the  courts. 

trieber's  decision. 

The  decision  of  Judge  Trieber,  from  which  the  above  appeal 
was  taken,  was  received  in  St.  Louis  by  mail  from  his  home  in  Little 
Rock  Ark.,  on  April  18,  1907.  A  temporary  injunction  was  granted 
to  the  Woman's  Farm  Journal,  but  a  similar  injunction  in  behalf 
of  the  Woman's  Magazine  was  denied.  Among  the  vital  points  in 
controversy,  ruled  upon  in  this  decision,  were  these:  First,  on  the 
contention  of  the  Government  that  two  former  hearings  had  been 
granted  the  company,  Cortelyou  was  overruled.  The  court  held 
that  there  had  been  no  hearing  within  the  meaning  of  the  act  of 
March  1,  190L     This  statute  provides  "When  any  publication  has 


670  THE  SIEGE  OF  UNIVERSITY  CITY 

been  accorded  second-class  mail  privileges  the  same  shall  not  be 
suspended  or  annulled  until  a  hearing  shall  have  been  granted  to 
the  parties  interested."     On  this  pointy  the  court  said: 

The  hearing  of  June,  1905,  was  not  treated  as  final.  The  Postoffice 
Department,  at  the  hearing  of  April  30,  1906,  led  complainant  to  believe 
that  it  would  be  given  a  full  opportunitj  to  be  heard  and  submit  evidence 
on  the  issue  of  revoking  second-class  privilege,  under  the  citation  of  June 
5.  1905.  Relying  on  that  assurance,  complainant,  on  that  hearing,  did  not 
present  any  evidence.  The  order  of  the  Postmaster-General  revoking  the 
privilege,  also  shows  that  it  is  based  solely  on  the  hearing  had  on  April  30 
and  Mar  1,  1906.  It  is,  therefore,  impossible  to  sustain  the  contention  that 
the  order  revoking  the  second-class  privilege  of  complainant  was  based 
upon  the  hearing  had  in  June,  1905,  and  as  it  is  undisputed  that  at  the 
hearing  had  on  April  30  and  May  1,  complainant  was  advised  that  this 
matter  would  not  be  taken  up  then,  but  that  he  would  be  notified  there- 
after when  to  appear  for  a  hearing  on  that  issue,  and  as  it  never  has  been 
so  notified,  it  is  impossible  for  the  court  to  make  a  finding  that  there  had 
been  any  hearing  on  this  issue,  within  the  meaning  of  the  law. 

Touching  the  question  of  excess  postage,  the  court  thus  held:  "As 
Congress  has  seen  proper  to  entrust  this  entire  matter  to  the  postmaster- 
general,  the  courts  are  powerless  to  interfere.  *  *  *  The  court  finds  itself 
powerless  to  review  the  action  of  the  postmaster  at  St.  Louis,  affirmed  by 
the  postmaster-general,  as  to  the  number  of  copies  of  the  Journal  which 
complainant  can  transmit  through  the  mails  at  the  one-cent-per-pound 
rate." 

The  effect  of  this  decision  was  to  limit  the  mailings  of  the  Wom- 
ans'  Farm  Journal  to  the  number  fixed  by  the  inspectors;  namely, 
one  hundred  and  forty  thousand  copies,  plus  an  equal  number  of 
samples,  whereas,  the  guaranteed  circulation  of  that  paper  had 
previously  been  six  hundred  thousand.  It  excluded  the  Woman's 
Magazine  altogether  from  the  mails.  When  interviewed  by  a  re- 
porter for  the  St.  Louis  Republic^  Lewis  said: 

A  property  valued  at  two  and  a  half  million  dollars  has  been  wiped  out 
by  the  decision  of  Judge  Trieber,  in  sustaining  the  claim  that  the  Woman's 
Magazine  was  granted  only  a  temporary  second-class  mailing  privilege. 
The  May  issue  of  the  magazine  will  be  mailed  out  to  the  subscribers  under 
full  postage.  It  will  contain  a  statement  of  the  case  and  an  appeal  to 
our  readers  to  renew  their  subscriptions  at  the  rate  of  twenty-five  cents 
a  year.  The  express  companies  have  made  us  a  rate  of  one-half  cent  a 
pound,  which  is  less  than  the  second-class  rate  of  the  Government,  and 
we  may  decide  to  circulate  the  magazine  in  this  way.  In  that  case,  we 
will  require  an  agent  in  every  town.  We  may  apply  for  another  second- 
class  permit  for  the  magazine,  but  we  have  not  definitely  decided  to  do  .so, 
as  we   feel  that  the   Postoffice  Department  will  decline  to  issue  it. 

Postmaster  Wyman  expressed  himself  as  much  much  gratified  at 
Judge  Trieber's  decision.  Wyman  here  shows  that  the  effect  of  the 
decision  was  to  mulct  the  companj'  in  the  amount  of  over  one  hun- 
dred thousand  dollars.     He  said: 

The  Lewis  Publishing  Company  now  owes  the  Department  about  fifty- 
five  thousand  dollars  for  postage  on  the  Woman's  National  Daily  and 
thirty-four  thousand  dollars  on  the  Woman's  Farm  Journal.  Besides  this, 
one  bond  for  five  thousand  dollars,  another  for  ten  thousand  dollars,  have 
been  exhausted.  A  bond  for  fifty  thousand  dollars,  secured  by  James  F. 
Coyle  and  Theodore  F.  Meyer,  and  one  for  twenty  thousand  dollars  have 
also  been  exhausted. 


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THE  DREYFUS  CASE  OF  AMERICA  673 

Trieber's  decision  marked  another  of  the  greafe  crises  of  the 
Siege.  The  avenue  to  redress  through  the  Federal  courts  now 
seemed  closed.  True,  an  appeal  could  be  taken,  and  this  was  done. 
But,  as  we  have  seen,  a  decision  could  not  be  hoped  for  until  far 
too  late  to  have  any  substantial  value.  Madden,  who  had  refused 
to  testify  at  the  hearings  before  Trieber,  on  the  ground  that,  pend- 
ing the  appointment  of  his  successor,  he  was  still  an  emploj^ee  of  the 
Department,  now  renewed  his  advice  that  the  company  proceed  to 
sue  out  a  writ  of  mandamus  against  the  postmaster-general  in  the 
courts  of  the  District  of  Columbia.  He  privately  advised  Lewis 
that  Trieber's  decision  was,  in  his  judgment,  due  to  the  fact  that 
Classic's  superior  familiarity  with  postal  legislation  and  expert 
knowledge  of  postal  law,  had  enabled  the  Government  to  overmatch 
the  arguments  of  counsel  for  Lewis.  He  expressed  the  opinion,  that 
Trieber's  decision  that  the  Woman's  Magazine  had  not  been  in  fact 
admitted  to  the  second-class,  was  contrary  to  the  law  and  evidence 
in  the  case ;  and  that,  if  the  facts  were  properly  presented,  the  con- 
tentions of  the  company  would  be  sustained  by  a  court  having  the 
proper  jurisdiction. 

A    COUNCIL    OF    WAR. 

The  best  legal  talent  obtainable  in  St.  Louis  was  retained  by 
Lewis  at  this  crisis  and  a  full  council  of  war  of  his  friends  and  as- 
sociates was  called.  The  attorneys  for  the  company  and  special 
counsel  were  present.  Madden's  brief  and  recommendation  were 
submitted,  canvassed  and  rejected.  The  pendency  of  the  indict- 
ments against  Lewis,  which  it  was  supposed  would  shortly  be 
brought  to  trial,  and  the  likelihood  of  civil  suits  being  brought  by 
the  postmaster  at  St.  Louis  to  recover  the  alleged  excess  postage, 
were  thought  by  counsel  for  the  company  to  render  the  course 
proposed  by  Madden  inadvisable.  It  was,  furthermore,  decided 
that  the  ground  of  attack  should  be  shifted  from  the  Govern- 
ment itself  to  the  officials  individually,  and  that  suits  should  be  in- 
stituted for  heavy  damages  against  Inspector-in- Charge  Fulton, 
Postmaster  Wyman,  Assistant  Attorney-General  Goodwin  and  Cor- 
telyou.  In  view  of  the  mystery  which  seemed  to  surround  the  atti- 
tude of  the  Department  and  the  persistent  assaults  on  Lewis'  enter- 
prises, one  after  another,  it  was  further  decided  to  fight  fire  with  fire 
and  to  take  steps  to  penetrate,  if  possible,  the  councils  of  the  enemy. 
The  substance  of  the  plan  of  campaign  thus  agreed  upon  was  out- 
lined by  Lewis  in  a  letter  under  date  of  May  2,  1907,  to  Madden, 
who  had  by  this  time  retired  from  the  Postoffice  Department.  He 
said: 

Our  plans  were  decided  on  by  the  full  board  after  a  long  and  careful 
consultation.  The  best  legal  talent  in  the  city  has  been  lined  up.  We 
shall  bend  every  energy  to  secure  a  sweepmg  victory  on  the  indictments, 
thereby  dealing  a  crushing  blow  to  the  Government  and  the  local  crowd. 
Immediately  on  the  settlement  of  these  indictments  we  shall  bring  the 
following  suits:  A  civil  suit  against  Wyman  personally  for  two  hundred 
and  fifty  thousand  dollars;  a  damage  suit  against  Cortelyou  for  five  hun- 


674  THE  SIEGE  OF  UNIVERSITY  CITY 

dred  thousand  dollars;  a  blanket  suit  for  conspiracy  against  the  whole 
crowd,  including  Goodwin;  a  libel  suit  for  enormous  damages  against  the 
St.  Louis  Post-Dispatch.  In  addition,  we  shall  endeavor  to  have  Wyman 
and  Fulton  indicted  for  criminal  conspiracy  and  malicious  prosecution. 
There  will  thus  be  five  different  suits,  all  instituted  at  the  same  time. 

Should  we  take  the  step  you  suggest,  or  any  other  step,  at  this  time, 
the  Government  would  undoubtedly  postpone  all  the  big  litigations,  such  as 
the  indictments  and  civil  suits  for  excess  postage,  and  keep  tiiem  hanging 
over  us.  Then,  if  the  decision  went  against  us,  it  would  be  used  as  a 
basis  for  heading  us  off.  There  are  now  but  twelve  days  left  before  the 
beginning  of  trial  on  the  indictments.  A  victory  on  them  would  put  the 
Government  on  the  defensive.  For  nearly  two  years  these  indictments  have 
been  kept  hanging  over  us.  They  have  been  paraded  and  heralded  by 
Cortelyou  and  Goodwin  in  private  letters  and  pamphlets,  as  proof  of  our 
guilt.  The  first  step  for  us  is  to  clear  these  out  of  the  way.  A  victory  on 
them  will  be  prima  facie  evidence  of  malicious  and  vicious  prosecution  and 
conspiracy  against  us,  and  would  be  a  tremendous  help  in  our  damage 
suits  against  both  Wyman  and  Cortelyou.  If  you  could  have  given  your 
evidence  on  these  matters  at  the  hearings  before  Tricber,  there  is  not  the 
slightest  doubt  that  we  could  have  won  a  complete  victory.  AVe  must  now 
bring  out  your  testimony  on  the  witness  stand,  but  I  believe  it  will  be  all 
the  stronger,  from  the  fact  that  you  refused  to  testify  while  in  the 
service. 

THE  STORY  OF  THE  DETECTIVE,  BECK. 

The  employment,  by  Lewis,  of  an  operative  from  the  Pinkerton 
detective  agency  was  also  agreed  upon  at  this  conference.  It  was 
thought  that  such  an  operative  could  form  the  acquaintance  of  the 
postoffice  officials,  at  St.  Louis,  and  find  out  by  whom  the  assaults 
on  Lewis'  enterprises  were  being  instigated.  Lewis  makes  this 
statement  to  the  Ashbrook  Committee: 

We  made  a  most  persistent  effort  to  learn  what  was  behind  these  attacks. 
It  did  not  seem  reasonable  to  suppose  that  just  the  ordinary  practice  was 
being  followed,  because  the  minute  one  method  of  assault  had  been  set  at 
naught  by  the  development  of  facts,  we  were  attacked  in  some  other  way. 
It  made  no  difference  what  we  did,  we  were  subject  to  these  attacks.  It 
became  perfectly  evident  that  there  was  something  very  deep  behind  the 
matter.  These  attacks  seemed  to  be  coming  from  a  number  of  different 
sources.  There  seemed  to  be  some  great  power  behind  them.  I  made  up 
my  mind  to  find  out  what  it  was.  So  I  went  to  the  Pinkerton  people  and 
secured  one  of  the  best  men  they  had.  I  said:  "I  do  not  want  to  prose- 
cute this  thing  in  any  way,  except  to  get  information.  I  want  to  find  out 
what  is  behind  this  fight.  I  want  you  to  send  your  best  man  to  St.  Louis 
and  have  him  get  acquainted  with  the  postoffice  crowd  and  find  out  from 
the  inside  what  is  behind  this  proposition."  They  sent  their  superintendent, 
Ira  I>.  Beck.  He  soon  got  acquainted  with  the  postoffice  inspectors  and 
Mr.  Wyman.  They  became  very  confidential.  In  fact,  they  used  him  as 
tiieir  meal  ticket.  I  mean,  he  was  paying  their  board  before  they  got 
through.  In  fact,  they  got  to  using  his  automobile  without  asking  his 
permission — or  I  presume  I  should  say  my  automobile,  because  I  was 
paying  for  it. 

The  reports  of  this  detective  were  made  in  writing  and  sworn  to.  I 
have  had  them  all  these  years,  but  I  have  refused  in  any  way,  shape  or 
manner  to  utilize  them,  although  I  have  been  repeatedly  urged  to  do  so. 
I  do  not  like  such  methods.  I  was  fighting  against  them  myself.  I  adopted 
them  in  this  instance  simply  because  it  seemed  the  only  way  possible  to 
find  out  what  was  behind  this  thing  in  the  postoffice  at  St.  Louis. 

The  reports  were  made  by  Mr.  Beck  direct  to  the  office  of  the  Pinkerton 
agency,  and  then  forwarded  to  me.  At  first  it  was  a  little  difficult  for 
the  detective  to  get  just  the  information  we  wanted,     So  I  suggested  to 


THE  DREYFUS  CASE  OF  AMERICA  675 

him  that  as  Mr.  Wyman  was  the  agent  of  the  Pike  Adding  Machine  Com- 
pany, he  drop  a  hint  that  he,  or  his  brother,  probably  would  require  some 
adding  machines  in  their  business.  He  did  that,  and  was  immediately 
adopted  as  a  blood-brother  by  the  office  force  there.  I  authorized  him 
to  purchase  one  of  the  adding  machines.  I  concluded  I  could  use  it  to 
advantage  in  keeping  track  of  the  indictments  and  investigations  against 
me.  I  have  that  machine  yet.  After  the  purchase  of  this  machine  and 
the  prospective  purchase  of  additional  ones,  they  seldom  let  Mr.  Beck  out 
of  their  sight. 

I  wanted  to  know  whether  the  Postoffice  Department  or  Mr.  Cortelyou 
himself  was  behind  this,  or  whether  it  was  a  purely  local  fight.  I  wanted 
to  learn  whether  powerful  interests,  such  as  the  transit  companies  there, 
or  real  estate  interests,  were  trying  to  get  this  property  away  from  me, 
or  whether  a  more  far-reaching  influence  was  being  exerted.  That  was 
my  sole  purpose.  I  wanted  to  see  what  were  the  motives  involved  in  this 
entire  business. 

I  am  not  clear  on  these  today.  I  am  inclined  to  think  this  whole  siege 
started  in  a  small  way.  Possibly  the  first  motive  might  have  been  over- 
zealousness  on  the  part  of  some  postal  official,  kindling  a  small  blaze  which 
soon  became  a  coniiagration.  There  may  have  been  some  banking  interests 
implicated.  Mr.  Cortelyou  had  destroyed  the  bank,  but  instead  of  proving 
to  be  a  fake  and  a  swindle,  as  the  inspectors  had  given  everybody  to  sup- 
pose, it  was  found  to  be  absolutely  sound,  solvent  and  straight  in  every 
particular.  They  had  put  the  knife  into  the  back  of  the  victim.  Then  there 
was  only  one  thing  to  do — namely,  to  finish  the  murder.  I  think  that  is 
pretty  nearly  the  truth  of  the  matter. 

This  detective  became  intimately  acquainted  with  Fulton,  Stice  and 
other  inspectors  there,  the  postoffice  clerks  and  Mr.  Wyman.  The  general 
purport  of  his  findings,  as  reported  to  me,  was  that  they  had  been  ordered, 
direct  from  Washington,  to  put  us  out  of  business  in  pretty  much  any 
way  they  could,  and  that  they  would  be  sustained  in  anything  they  did. 
The  chief  thing  was  to  get  me  locked  up  and  silenced  before  the  next 
campaign. 

Preserved  in  Lewis'  private  vault  are  the  daily  reports  sub- 
mitted and  sworn  to  by  Beck,  beginning  with  that  of  May  13,  1907, 
and  continuing  uninterruptedly  until  August  13.  These  reports, 
complete  files  of  which  were  submitted  in  evidence  before  the  Ash- 
brook  Committee,  bear  directly  upon  many  vital  issues  of  the  Siege. 
Space  forbids  even  an  attempt  to  summarize  them  here.  Upon  their 
face  they  show  intimate  personal  relations  between  the  detective 
and  Postmaster  Wyman,  and  report  many  confidential  communica- 
tions with  one  W.  Reiter,  clerk  and  stenographer  to  the  inspectors, 
as  well  as  automobile  rides  and  dinners  with  the  inspectors  them- 
selves. One  excerpt  from  Beck's  detailed  reports  must  serve  as  an 
example  of  the  rest.  He  here  recounts  the  incident  at  Suburban 
Garden,  on  the  dividing  line  between  St.  Louis  city  and  St.  Louis 
county,  when  Wyman,  who  had  been  decoyed  there  as  Beck's  guest, 
was  served  ^vith  papers  in  the  civil  suit  for  damages  brought  by 
Lewis.  This  report  covers  the  date  of  July  5.  This  incident  is 
regarded  by  Lewis  as  positive  corroboration  of  Beck's  reliability. 
The  strategy  of  counsel  for  Lewis,  required  that  service  be  had  on 
Wyman  in  St.  Louis  county.  The  object  was  to  bring  the  suits  to 
trial  in  the  jurisdiction  where  Lewis'  home  and  the  plant  of  the 
publishing  company  were  located.     Beck  reports  that  after  a  pri- 


676  THE  SIEGE  OF  UNIVERSITY  CITY 

vate  talk  \vitli  Lewis  he  called  at  the  postoffice  on  July  6  and  took 
Postmaster  Wyman  to  luncheon.     He  then  says: 

At  6:00  p.  m.,  after  a  great  deal  of  difficulty,  I  was  able  to  reach  Mr. 
Miller  at  liis  lioine  by  telephone.  I  then  told  him  Wj'nian  and  I  would, 
attend  the  performance  at  the  Suburban  Garden  during  the  evening.  At 
8:05  p.  m.,  I  called  at  Wyman's  home,  met  him  and  his  daughter  and  we 
went  to  the  Suburban  Garden  theatre.  After  tiie  performance  a  sheriff 
served  Wyman  with  the  papers  in  several  suits  for  damages.  These  suits 
were  brought  by  the  Lewis  Publishing  Company  against  Wyman  and 
Fulton.  We  left  tlie  Garden  as  quietly  as  possible.  Wyman  had  become 
nervous.  He  insisted  on  boarding  the  first  car,  although  it  was  crowded. 
As  soon  as  we  got  on,  Wyman  and  I  started  reading  the  writs  which  had 
been  served  on  him.  After  we  had  finished  Wyman  said:  "I  will  tell  you 
something,  but  you  must  not  mention  it  to  anyone  until  it  becomes  public. 
The  grand  jury  returned  seven  indictments  against  Lewis  today.  Post- 
office  Inspector  Stice  called  me  up  by  telephone  at  7:00  p.  m.  and  told  me. 
I  guess  these  will  keep  him  pretty  busy  for  a  while." 

When  we  got  off  the  car  at  Hamilton  avenue,  Wyman  asked  me  to 
walk  over  to  his  home  and  talk  with  him  a  while.  I  remained  with  him  on 
his  front  veranda  until  1:30  a.  m.  During  the  time  he  remarked:  "The 
Government  will  take  care  of  me  in  the  suits;  they  will  furnish  the  attor- 
neys to  fight  them."  I  asked  him  why  the  Government  would  furnish  the 
attorneys  for  him,  and  he  replied:  "I  have  been  making  this  fight  on 
E.  G.  Lewis,  as  the  postmaster  of  this  city,  not  as  a  private  citizen.  Former 
Postmaster-General  Cortelyou  approved  of  the  fight  which  Fulton  and  I 
have  made  on  Lewis.  He  will  without  doubt  stand  by  us  in  the  fighting  of 
these  suits."  I  asked  him  if  the  fight  were  not,  in  reality,  started  by 
Cortelyou.  He  said:  "Oh,  no;  Fulton  started  this  fight  on  Lewis,  and  I 
have  approved  everything  he  has  done.  Cortelyou  and  all  the  postoffice 
officials  at  Washington  have  also  approved  of  everything  done  by  Fulton 
and  me  in  this  matter.  Even  the  President  has  approved  of  our  work  on 
this  case.  But  the  powers  at  Washington  did  not  start  this  Lewis  fight. 
They  had  nothing  to  do  with  it  for  some  months.  After  we  had  worked 
on  it  several  months  and  had  secured  a  lot  of  evidence  against  Lewis  and 
presented  it  to  the  powers  at  Washington,  they  saw  things  in  the  same 
light  as  we  saw  them,  and  they  then  gave  us  their  approval  and  support." 

He  later  remarked:  "This  thing  has  now  reached  a  stage  where  it  is 
Fulton  and  me  against  E.  G.  Lewis.  We  must  convict  him  and  put  him  out 
of  business,  or  we  are  both  ruined.  Personally,  I  have  not  had  much  of 
a  hand  in  this  fight.  Fulton,  whom  I  trust  as  I  would  my  own  family, 
has  carried  on  this  entire  fight,  with  the  able  assistance  of  Stice.  I  have, 
as  postmaster,  signed  the  letters  and  papers  in  this  case,  but  Fulton  wrote 
all  the  letters  and  drew  up  nearly  all  the  papers.  I  have  just  signed  them. 
Most  of  them  I  signed  without  reading.  I  really  know  only  what  Fulton 
and  Stice  tell  me.  I  would  give  a  great  deal  to  know  that  the  thing  was 
over  with,  as  it  has  made  life  miserable  for  me  for  two  years,  and  I  do 
not  believe  I  could  stand  much  more  of  it. 

"It  seems  strange  to  me  how  this  fellow  Lewis  can  keep  up  the  fight.  I 
know  he  is  smart  and  clever,  and  I  believe  the  best  business  man  in  St. 
Louis,  if  not  in  the  entire  United  States.  But,  with  all  his  great  clever- 
ness, I  do  not  see  how  or  why  we  have  not  finished  him.  Fulton  has  prom- 
ised me  time  and  again  that  he  would  soon  have  him  finished  up.  But  I 
find  him  still  on  hand,  making  just  as  much  noise  and  figiit  as  ever.  It  is 
not  encouraging  to  me.  If  I  coidd  get  this  fellow  I>cwis  to  go  straiglit,  I 
would  be  willing  to  put  every  dollar  of  my  money  into  his  publishing  busi- 
ness and  to  take  a  position  with  him  as  manager  or  assistant  manager,  as 
I  know  if  anyone  could  make  this  fellow  l)e  honest  and  pay  the  United 
States  Government  the  correct  postage,  why,  the  Lewis  Publisliing  Com- 
pany would  even  then  make  barrels  of  money.  Lewis  is  really  a  most 
wonderful  man.    His  father  is  a  minister — a  fine  man — and  his  mother  is  a 


^Police   Dct<ii>JnCii:    ■-/    i  iiuosity    City 
^Firc    Department   and   automobile    fire   engine 


^Washington  University  as  viewed  from  University  City  -Administration  Building 
of  Washington   University     ^Art  Museum,  Forest  Park 

The  grounds  of  Washington  University  occupy  the  angle  between  University  City 
and  the  location  in  Forest  Park  occupied  in  1(^04  by  the  St.  Louis   Worlds  Fair 


THE  DREYFUS  CASE  OF  AMERICA  679 

fine  woman.  But  E.  G.  Lewis  does  not  take  after  his  parents  in  honesty. 
He  is  a  beautiful  talker  and  a  wonderful  writer.  He  has  a  fine  face,  a 
most  pleasing  manner  and  he  just  hypnotizes  the  people.  Why,  just  think 
of  it!  He  has  fooled  such  men  as  ex-Governor  Stephens,  Meyer,  Carter 
and  hundreds  of  otlier  bright,  smart  lawyers  and  big  business  men  of 
the  country.     A  man,  to  do  that,  is  surely  a  wonderful  man.  *  *  * 

"Some  time  ago  the  United  States  Government  got  out  a  small  booklet 
giving  a  full,  condensed  history  of  the  Lewis  case.  This  was  gotten  up  by- 
Fulton  and  sent  to  Washington,  where  the  assistant  postmaster-general 
and  Cortelyou  revised  it.  They  reduced  it  nearly  half.  Then  the  Govern- 
ment sent  out  thousands  of  them,  so  that  people  who  had  become  convinced 
that  Lewis  was  being  persecuted  by  us  could  learn  our  side  of  the  case. 
Many  people  throughout  the  country,  who  had  given  Lewis  assistance  and 
sympathy,  dropped  him  after  they  had  read  our  little  booklet." 

He  stated  he  has  one  of  these  booklets  in  the  original  form,  as  gotten 
up  by  Fulton,  and  also  one  of  the  revised  copies,  which  he  would  show  me 
some  time.  He  then  continued:  "I  am  told  by  Fulton  and  Stice  that  Lewis 
will  be  convicted,  sure,  in  the  bank  case.  But  I  am  afraid  we  may  not  be 
able  to  use  much  of  the  evidence  which  we  have  against  him,  for  while  we 
are  satisfied  with  our  evidence,  I  am  not  sure  whether  the  court  will  con- 
sider it  or  allow  us  to  present  it."  *  *  *  He  practically  admitted  to  me  that 
the  evidence  which  they  had  against  Lewis  is  of  a  kind  that  will  be  nearly 
useless  as  evidence  in  a  court,  for  nearly  all  of  it  will  not  be  admissible. 
Wyman  was  in  a  very  nervous  state  during  the  last  evening,  and  I  was 
afraid  he  was  going  to  have  a  fainting  spell  several  times  during  the  night. 

MADDEN    PLANS    WASHINGTON    CAMPAIGN. 

Immediately  after  severing  his  connection  with  the  Department, 
General  Madden  had  conferred  with  leading  members  of  the  Wash- 
ington bar  as  to  the  propriety  of  becoming  associated  with  Lewis 
in  the  effort  to  set  right  the  great  wrong  he  believed  had  been  done 
the  Lewis  Publishing  Company.  He  sought,  further,  to  prove  to 
the  world  the  propriety  of  his  own  official  conduct,  which  had  been 
impugned  by  Cortelyou.  He  was  advised  by  counsel  that,  morally 
and  otherwise,  he  had  a  perfect  right  to  place  his  services  at  Lewis' 
disposal,  but  that  it  would  be  expedient  to  defer  such  action  until 
the  pending  injunction  proceedings  should  be  disposed  of  by  Judge 
Trieber.  At  ]\Iadden's  request,  Lewis  wired  him,  April  19,  the 
substance  of  Trieber's  decision,  as  follows: 

Trieber  ruled  no  hearing  was  given  on  either  paper,  but  as  Magazine 
had  only  temporary  permit,  none  was  required.  On  that  ground  the 
Magazine  injunction  is  refused.  Farm  Journal  injunction  granted.  De- 
cision that  Cortelyou  suppressed  Journal  unlawfully  without  hearing  is 
important. 

On  receipt  of  this  information,  Madden  urgently  recommended 
the  arrest  of  Wyman  for  the  holding  up  of  the  three  hundred  thou- 
sand copies  of  the  Woman's  Farm  Journal  in  October,  1905.  He 
also  advised  proceedings  to  replevin  the  copies  thus  impounded.  He 
argued  that  such  an  aggressive  stroke,  followed  by  the  institution 
of  civil  suits  for  damages,  would  strike  terror  into  the  opposing 
camp.  Lewis'  Washington  representative  reported  counsel  for  the 
Government  as  privately  admitting  that  such  an  action  would 
"knock  the  bottom"  out  of  tlie  Department's  case.  These  pro- 
posals were  considered  by  Lewis'  attorneys,  but  it  was  thought  that 
under  Missouri  laws  they  were    not    practicable.     The    arrest    of 


680  THE  SIEGE  OF  UNIVERSITY  CITY 

Wyman  could  onl}'^  be  brouglit  about  through  an  indictment  by  the 
grand  jury.  This  course,  it  was  believed,  would  be  blocked  by  the 
Federal  officials.  Owing,  also,  to  the  pendency  of  the  indictments 
against  Lewis  and  his  associates  for  conspiracy,  these  steps  were 
deemed  inadvisable. 

Lewis'  correspondence  with  his  Washington  representative  and 
with  Madden,  affords  a  detailed  review  of  every  move  made  by  him 
and  his  counsel  to  check  the  legal  maneuvers  of  the  Federal  offi- 
cials. The  frequent  skirmishes  and  court  battles  must,  for  the  most 
part,  be  passed  over.  We  can  only  describe  the  occasional  events 
which  mark  some  dramatic  crisis.  In  response  to  the  criticism  of 
Madden  that  Judge  Trieber  should  have  been  forced  by  counsel  of 
the  company  to  decide  the  main  issue  raised  by  the  demurrer,  Lewis 
replied : 

Judge  Barclay  consumed  an  entire  day,  and  his  arguments  were  able 
and  exhaustive.  When  his  attack  on  the  legal  basis  of  the  indictment  was 
sprung  upon  the  Government  forces,  it  acted  like  a  bomb-shell.  Trieber 
demanded  of  the  Federal  attornejs  whether  they  knew  of  any  contradictory 
statute.  He  then  began  to  question  the  Government's  special  attorney, 
Judge  Krum.  Krum  took  the  position  that  the  bona  fides  of  our  subscrip- 
tion list  was  no  defense,  claiming  it  to  be  tainted  by  the  conspiracy  to 
defraud  the  Government.  When  asked  by  Trieber  to  define  a  "conspiracy," 
Krum  said  it  was  "two  or  more  men  getting  their  heads  together  to  commit 
a  wrong."  Asked  whether  he  meant  a  legal  or  moral  wrong,  Krum  replied 
that  he  meant  a  legal  wrong.  Trieber  pointed  to  the  statute  and  said: 
"How  could  there  be  a  conspiracy  if  there  was  no  legal  wrong,  according 
to  this  statute?"  The  Government  contended  that  the  mandate  of  the 
postmaster-general  had  the  force  of  law,  if  his  ruling  was  within  the  dis- 
cretion of  the  postmaster-general.  Trieber  did  not  want  to  decide  this 
big  question.  The  difficulty  is  that  Federal  judges  seem  disposed  to  rule 
that  the  postmaster-general  is  an  absolute  and  arbitrary  power.  We  feel 
that  we  have  been  very  fortunate  in  having  a  judge  like  Trieber,  who 
had  the  backbone  to  go  as  far  as  he  did. 

Lewis  further  remarks  that  when  Trieber  pledged  the  company 
in  open  court  to  try  the  bank  case  on  June  10,  the  Federal  officials 
found  it  necessary  to  tear  up  the  courtroom  and  make  repairs  in 
that  wing  of  the  building.  Commenting  upon  this  move,  Lewis 
remarks:  "They  evidently  did  not  want  Judge  Trieber  to  try  this 
case.  We  have  decided,  therefore,  to  bring  all  our  suits  in  a 
bunch."  The  filing  of  the  first  suits  mentioned  in  the  report  of 
the  Pinkerton  operative  was  communicated  to  General  McWade  at 
Washington  by  Lewis.  These  consisted  of  the  suit  against  the 
Post-Dispatch  and  Inspectors  Fulton,  Stice  and  Sullivan  for  libel 
for  seven  hundred  and  fifty  thousand  dollars.  Copies  of  four  addi- 
tional suits  against  Wyman  and  Fulton  were  also  transmitted  to 
Washington  for  Madden's  information.  A.  S.  Worthington,  a 
prominent  member  of  the  Washington  bar,  was  then  retained  by 
Madden  in  Lewis'  behalf,  and  arrangements  were  effected  to  carry 
on  a  fight  simultaneously,  both  at  St.  Louis  and  at  Washington. 
This  campaign  was  planned  to  take  effect  in  the  early  fall  of  1907, 
when  official  Washington  should  have  returned  from  its  annual 
summer  outing. 


THE  DREYFUS  CASE  OF  AMERICA  681 

A  telegram  from  Lewis  to  General  MeWade,  dated  July  13, 
affords  a  point  of  contact  with  still  another  negotiation  of  special 
interest,  by  reason  of  the  important  developments  which  followed. 
Lewis  said:  "Have  delayed  writing  you  fully,  awaiting  certain 
extremely  interesting  developments  here.  Will  send  complete  de- 
tails today."  The  allusion  here  is  to  the  investigation  and  report 
made  at  this  juncture  by  Allen  D.  Albert,  editor  of  the  Washington 
Times.  Touching  this  report,  Lewis  made  the  following  statement 
to  the  Ashbrook  Committee: 

I  believe  the  first  time  I  ever  saw  Mr.  Albert  was  when  he  walked  into 
my  office  one  clay  and  gave  me  his  card.  He  said  he  was  out  there  making 
an  investigation  in  regard  to  our  matters  for  Mr.  Cortelyou.  He  was 
going  back  to  Washington  that  afternoon,  but  before  going  he  wanted  to 
ask  me  a  few  questions.  I  told  him  I  would  be  very  glad  to  throw  the 
whole  institution  open  to  him,  and  answer  every  question. 

Something  he  said  caused  me  to  mention  the  investigation  of  the  Citi- 
zens' Committee.  He  asked  to  what  I  referred.  I  told  him  this  question 
had  all  been  threshed  out  by  a  committee  of  business  men  of  the  city  of 
St.  Louis,  assisted  by  public  accountants,  and  that  they  had  made  a  report 
covering  the  whole  thing.  He  said:  "That  is  strange."  I  said,  "What  is 
there  strange  about  it?"  He  replied  that  he  understood  all  the  documents 
and  information  in  the  case  had  been  submitted  to  him  before  he  left 
Washington,  but  that  he  had  never  heard  of  this  business  men's  committee 
report. 

I  then  went  to  the  safe,  took  it  out  and  spread  it  on  the  floor.  The 
tabulated  summaries  were  too  big  to  spread  out  conveniently  on  my  desk 
or  table.  He  then  got  down  on  the  floor  and  commenced  to  look  it  over. 
The  more  he  examined  it,  the  more  interested  he  became.  As  a  result  he 
stayed  in  St.  Louis,  if  I  remember  rightly,  a  couple  of  weeks,  instead  of 
going  back  that  afternoon.  He  made  his  inquiry  and  investigations  very 
exhaustive.  He  called  on  a  great  many  of  the  business  men,  bankers, 
judges,  the  postmaster,  the  inspectors  and  others  before  he  left.  He 
afterwards  made  a  report  of  his  investigation,  and  sent  me  a  copy. 

Albert's  investigation. 

General  Madden,  in  commenting  upon  this  occurrence,  says: 
"The  findings  of  Mr.  Albert  clearly  illustrate  the  state  of  public 
opinion  at  St.  Louis  and  elsewhere  as  to  the  status  of  the  Siege  in 
July,  1907."  Albert's  report  was  made  in  the  form  of  a  memo- 
randum addressed  to  Madden's  successor,  Third  Assistant 
Postmaster-General  Lawshe.  It  purports  to  give  the  substance  of 
certain   conversations   with   Cortelyou.      Albert  says,   in   substance: 

I  went  to  Mr.  Cortelyou  in  July  and  told  him  I  had  discovered  that  the 
sentiment  of  business  men  in  the  Middle  West  was  decidedly  adverse  to 
him  and  to  the  Administration,  because  of  the  action  in  the  Lewis  case. 
I  said  I  was  informed  that  Mr.  Lewis  was  innocent  of  any  intentional 
wrong.  I  reminded  him  that  grave  charges  had  been  made  against  the 
inspectors  and  Judge  Goodwin.  I  told  him  I  was  going  to  Chicago  and 
St.  Louis,  and  desired  information  to  lay  before  the  business  men  I  might 
meet.  Cortelyou  outlined  the  case  and  asked  me  to  examine  the  record. 
Upon  my  return  I  reported  to  him  substantially  as  follows: 

"That  I  had  come  back  from  a  careful  study  of  the  situation  satisfied 
the  Government  could  not  convict  Lewis  upon  any  of  its  charges,  as  set 
forth  in  indictments. 

"That  the  case  depended  upon  two  men,  Inspector  Fulton  and  Post- 
master Wyman;  that  the  former  was  indiscreet,  overzealous,  mistaken  or 
worse,  and  the  latter  a  fathead. 


682  THE  SIEGE  OF  UNIVERSITY  CITY 

"That  two  men  officially  connected  witli  the  Government's  proceedings 
against  Lewis  had   reported  that   it  could   not  convict  him. 

"That  between  them,  Fulton  and  Wyman  had  committed  the  Postoffice 
Department  and  Mr.  Cortelyou  beyond  all  reason. 

"That  the  proceedings  against  Lewis  appeared  to  me  to  be  chiefly  a  se- 
ries of  mistakes,  and  that  tlie  same  view,  with  knowledge  of  the  mistakes, 
was  held  in  the  oflBces  of  the  following  newspapers:  The  New  York  Times, 
the  New  York  Sun,  the  St.  Louis  Globe-Democrat,  the  St.  Louis  Republic, 
the  St.  Louis  Star-Chronicle,  the  Chicago  Record-Herald,  the  Chicago 
Tribune,  the  Indianapolis  News,  the  Washington  Times." 
"put  lewis  out  of  business." 

I  told  him  of  statements  made  to  the  effect  tiiat  Inspector  Fulton  and 
Postmaster  Wyman,  in  a  conference  in  Washington  with  Cortelyou,  Meyer 
and  Goodwin,  had  been  told  that  thej'  must  finish  up  this  Lewis  business 
before  spring,  or  make  way  for  someone  else.  Cortelyou,  it  was  said,  had 
given  his  photograph  to  one  or  both  of  them,  and  had  promised  them  ad- 
vancement if  they  "put  Lewis  out  of  business."  Fulton,  I  found,  was 
ambitious.  He  is  reported  to  have  said  it  was  "either  Lewis  or  myself." 
Wyman,  I  found,  was  being  made  a  tool  of  the  inspectors.  Men  said  of 
him  that  if  he  could  "hold  down"  the  job  of  postmaster,  they  were  will- 
ing enough  he  should  have  it,  "poor  darn  fool,"  etc.  It  was  told  that  he 
was  tlie  only  prime  mover  in  the  Simmons  Hardware  Company  who  did  not 
have  brains  enough  to  take  part  in  the  management,  and  that  he  was  let 
out  on  that  account.  Finally,  more  than  one  man  told  me  WjTnan  had  said 
he  "never  wrote  an  original  letter  in  the  Lewis  case,"  that  "Fulton  wrote 
them  and  he  just  signed  them."  It  was  common  report  that  his  bonds- 
men were  making  his  life  miserable. 

One  of  the  men  who  impressed  me  most  favorably  in  St.  Louis  told  me 
that  former  District  Attorney  Dyer  had  said  he  had  not  been  able  to  take 
a  single  indictment  against  Lewis  into  court,  because  Fulton  had  failed 
to  supply  him  with  any  sufficient  showing  of  fact  to  sustain  them,  and 
that  this  explained  why  some  of  the  indictments  had  gone  over  for  two 
years,  in  spite  of  earnest  efforts  on  the  part  of  Lewis'  attorneys  to  get  a 
trial. 

In  this  connection  Wyman  is  quoted  as  saying:  "I  have  not  been  sleep- 
ing well  for  several  nights.  I  have  been  worrying  over  that  d — d  Lewis 
matter.  They  raised  h —  with  Fulton  and  me  at  Washington  over  this 
dirty  mess,  and  I  am  really  worried  about  those  damage  suits.  *  *  *  AH 
they  did  on  this  last  trip  of  ours  was  to  give  us  the  dickens  for  not  having 
put  the  fellow  out  of  business  a  long  time  ago.  Fulton,  however,  assures 
me  that  we  have  no  cause  to  worry,  as  we  will  surely  put  him  out  of  the 
way  this  fall,  forever.  But  I  do  not  feel  just  as  positive  about  this  as  I 
did,  and  not  nearly  so  positive  as  Fulton  does.  If  I  do  not  convict  him 
I  will  not  be  reappointed  postmaster,  and  I  do  not  know  what  I  could  or 
■would  do.  I  now  have  things  in  fine  shape  in  the  office,  as  Mr.  Meyer  has 
granted  me  ,iil  the  increases  of  wages  which  I  asked  for  my  men  and  has 
also  granted  me  several  promotions  which  I  had  made  pending  his  con- 
firmation." 

BANKERS*    AKD    BUSINESS     MEn's    OPINIONS, 

Practically  all  the  business  men  with  whom  I  talked,  thought  the  Post- 
office  Department  should  have  waited  either  upon  action  from  the  Depart- 
ment of  State  of  Missouri  or  the  Treasury  Department  of  the  L^nited 
States,  or  until  it  could  move  jointly  with  one  or  both  of  them.  While  it 
was  appreciated  that  the  postoffice  officials  had  their  separate  responsi- 
bilities, it  was  yet  the  feeling  that  the  Department  had  set  out  to  make 
an  issue  with  Lewis,  whether  his  bank  suited  the  state  or  national  banking 
officers  or  not.  The  fact  that  the  first  application  for  a  receivership  and 
the  first  appointment  of  a  receiver  were  subsequently  set  aside,  is  regarded 
as  most  significant.  It  is  the  general  belief  that  the  report  of  the  re- 
ceiver  fully  exonerates   Lewis  by  these  words:     "Every  loan  and  invest- 


THE  DREYFUS  CASE  OF  AMERICA  688 

ment  held  by  the  People's  United  States  Bank  has  been  liquidated  one  hun- 
dred cents  on  the  dollar  with  interest  to  date.  The  deposits  are  being  paid 
in  full  and  I  have  already  declared  dividends  to  the  stockholders  of  eighty- 
five  per  cent." 

On  the  banking  cases  I  talked  only  with  bankers.  But  on  the  with- 
drawal of  the  second-class  mailing  privilege  I  talked  with  business  men 
generally,  trying  to  see  an  equal  number  of  my  own  choosing  and  of  Lewis'. 
Those  selected  by  me,  wiio:-e  views  are  important,  were  Nathan  Frank, 
Republican  national  committeeman  from  Missouri,  part  owner  of  the 
Star-Chronicle  and  former  representative;  Mr.  Lesan,  one  of  the  most  in- 
cisive young  business  men  I  have  ever  met;  and  Walter  B.  Stevens,  long 
one  of  the  most  highly  respected  of  Washington  correspondents.  They, 
like  every  other  of  the  one  hundred  and  ten  men  who  knew  enough  about 
this  case  to  talk  of  it  to  me,  characterized  the  Government's  course  against 
Lewis,  particularly  in  withdrawing  this  privilege,  as  "outrageous."  Most  of 
them  regarded  it  as  evidence  of  a  purpose  on  the  part  of  the  Department 
officials,  whether  Fulton  or  his  superiors,  to  ruin  Lewis  before  he  was 
brought  to  trial.  They  all  accept  the  view  of  the  editors  of  the  Globe- 
Democrat  and  the  Republic,  that  those  two  newspapers  are  as  subject  to 
exclusion  for  being  published  at  a  nominal  rate  as  either  of  Lewis'  maga- 
zines.    *     *    * 

I  told  Mr.  Cortelyou  that  Representative  Overstreet,  after  rather  a  full 
discussion  of  tlie  Lewis  case,  expressed  to  me  decided  doubt  whether  or 
not  the  Government  was  justified  in  proceeding  against  Lewis  so  severely. 
Nathan  Frank  told  me  that  if  the  Republicans  had  ever  had  a  chance  to 
carry  Missouri  a  second  time,  this  case  had  cost  them  that  chance.  He 
had  been  a  member  of  a  committee  of  business  men  which  had  counted  the 
original  orders  of  subscription  and  knew  that  the  Government's  conten- 
tions were  wrong.  He  did  not  believe  Fulton's  superior  officers  would 
hear  any  statement  of  the  case  which  brought  into  question  any  step  they 
had  taken.  Walter  B.  Stevens  told  me  it  was  one  of  the  saddest  experi- 
ences of  his  life  "to  realize  that  the  postal  authorities  did  not  want  to  do 
the  honest  thing  in  this  case."  John  A.  Lewis  said,  in  my  hearing,  that  the 
effect  of  the  inspectors'  course  in  this  case  was  to  make  every  banker  in  St. 
Louis  fearful  of  their  power,  and  that  the  inspectors  had  pursued  Lewis 
as  he  had  never  known  any  citizen  to  be  pursued.  Harry  Lesan  gave  it 
as  the  opinion  of  one  business  man  in  twenty-four  that  "Lewis  might  be 
guilty;"  of  three  that  "they  did  not  know;"  of  the  remaining  twenty,  that 
they  were  "morally  certain  that  Lewis  was  innocent."  Former  Governor 
Francis,  holding  this  view,  did  not  hesitate  to  communicate  it  to  the  editors 
of  the  New  York  Times.  The  other  papers  named  obtained  their  under- 
standing of  the  case,  by  separate  inquiry  on  the  part  of  persons  concerned 
in  their  management. 

VIEWS   OF  CORTELYOU. 

I  then  urged  upon  Mr.  Cortelyou  the  need  to  the  Administration  of  mak- 
ing manifest  in  results  its  disposition  to  be  fair,  if  the  disfavor  of  the 
business  men  I  had  encoimtered  was  to  be  counteracted.  To  that  end  I 
asked  him  to  arrange  with  the  attorney-general  that  the  present  district 
attorney  for  St.  Louis  be  summoned  and  asked — not  perfunctorily,  but  spe- 
cifically— whether  or  not  the  indictments  against  Lewis  were  sustained  by 
adequate  showing  of  fact.  If  they  were  not,  I  suggested  the  wisdom  of 
abandoning  them,  with  a  statement  to  the  press  which  should  give  the  rea- 
sons for  that  action.  Mr.  Cortelyou  replied  that  such  advice  could  hardly 
go  from  him  to  a  Department  with  which  he  was  not  connected.  He 
agreed,  however,  to  arrange  that  the  district  attorney  should  be  summoned, 
and,  in  the  event  that  the  indictments  were  found  to  be  without  sufficient 
foundation,  that  he  would  use  his  personal  influence  to  have  them  abandoned 
immediately.  Moreover,  though  not  directly  and  explicitly  stated,  I  think 
it  fair  to  say  we  both  understood  that,  in  the  event  the  indictments  were 
found  to  be  sustained,  he  would  use  his  personal  influence  to  have  them 
brought  to  trial,  without  further  delay. 


684  THE  SIEGE  OF  UNIVERSITY  CITY 

Then  followed  the  ensuing  conversation: 

Would  Mr.  Cortelyou  look  with  disfavor  on  the  readraission  of  the  two 
Lewis  magazines  to  the  second-class  privilege?     No. 

Would  he  oppose  it?    No. 

What  would  be  required,  in  his  judgment,  for  the  readraission  of  the 
magazines?    They  must  meet  the  requirements  of  the  law. 

What  did  he  regard  as  the  requirement  of  the  law  in  this  case  as  to 
"nominal  rate"?  He  did  not  mean  that  Lewis  must  increase  the  price  of 
his  magazine  to  twenty-five  cents  a  year,  or  anything  like  that. 

As  to  "being  published  primarily  for  advertising  purposes"?  Well,  the 
magazines  would  be  judged  for  what  they  were  when  offered  for  readrais- 
sion, not  for  what  they  had  been. 

As  to  "a  legitimate  list  of  subscribers"?  Lewis  must  satisfy  Mr. 
Lawshe. 

Did  Mr.  Cortelyou  feel  that  it  was  fair  to  shut  out  a  certification  like 
that  of  the  Association  of  Advertisers,  on  the  ground  that  no  count  could 
be  made?  No.  He  was  surprised  to  know  that  the  Association  of  Adver- 
tisers had  made  such  a  certification.  He  would  be  inclined  to  attach  as 
ranch  importance  to  it  as  I. 

Might  I,  then,  write  Mr.  Lewis  to  raake  application  for  the  readrais- 
sion of  his  magazines  to  the  second-class  privilege,  on  the  assumption, 
by  rae,  that  Mr.  Cortelyou  would  not  look  with  disfavor  on  their  readrais- 
sion to  the  second-class  privilege?     Yes. 

Would  Mr.  Cortelyou  pave  the  way  for  me  to  say  as  rauch  to  Mr. 
Lawshe,  in  order  that  Mr.  Lawshe  might  know  how  I  became  interested, 
that  I  was  honest,  that  I  had  begun  my  investigation  through  a  desire  to 
help  Mr.  Cortelyou  and  the  Administration,  and  that  I  still  held  to  those 
purposes,  though  I  sympathized  with  Mr.  Lewis  and  liked  hira?    Yes. 

Commenting  upon  this  document,  General  Madden  remarks: 
This  report  shows  that  Albert  was  inspired  to  make  his  investigation  by 
what  he  deemed  to  be  a  wrong  done  by  the  Government  to  E.  G.  Lewis  and 
the  institutions  of  which  he  was  the  creator.  The  report  also  shows  it  was 
generally  conceded  that  the  ex-postmaster-general  still  controlled  the  Post- 
office  Department,  in  so  far  as  its  dealings  with  these  magazines  were 
concerned.  Mr.  Cortelyou  was  now  secretary  of  the  treasury.  If  the  maga- 
zines complied  with  the  law,  how  could  they  lawfully  be  kept  out  of  the  sec- 
ond class?  Plainly,  this  was  not  deemed  a  matter  for  the  new  postmaster- 
general,  but  for  the  old,  and,  equally  as  plainly,  it  was  not  a  question  of 
whether  the  magazines  complied  with  the  law  of  Congress,  as  it  was  ap- 
plied to  all  others,  but  whether  they  complied  with  the  law  as  Cortelyou 
would  have  it  administered  to  them,  regardless  of  how  it  was  administered 
to  others.  One  cannot  read  this  report  and  not  understand  how  generally 
it  was  understood  that  Cortelyou  controlled  the  action  of  the  Postoffice 
Department  in  this  case,  even  after  he  left  it.  Albert's  application  to  him 
on  behalf  of  Lewis,  to  know  whether  he  would  "disfavor"  the  readraission, 
is  raost  significant. 

LESAN   AND    ALBERT   NEGOTIATIONS. 

The  month  of  August,  following  the  investigation  by  Mr.  Albert, 
was  signalized  by  the  opening  up  of  two  lines  of  negotiations 
whereby  Lewis  sought  to  forestall  impending  ruin.  The  first  of 
these  was  the  attempt  to  make  peace  with  the  Government.  The 
second  was  the  endeavor  to  bring  about  the  reorganization  of  the 
Lewis  Publishing  Company.  Both  culminated  during  a  trip  which 
Lewis  made  to  New  York  toward  the  end  of  August,  and  both 
were  frustrated,  as  the  sequel  will  show,  by  an  incident  of  prema- 
ture publicity.     These  two  plans  were  distinct  from  one  another, 


THE  DREYFUS  CASE  OF  AMERICA  686 

although  the  fact  that  Lewis  was  engaged  upon  them  simultaneously 
tends  to  give  the  impression  that  they  were  closely  interwoven. 

Albert  records  in  his  report  an  interview  with  H.  E.  Lesan,  who. 
he  states,  had  been  engaged  by  certain  business  men  to  investigate 
the  Lewis  Publishing  Company.  The  report  was  favorable  to  Lewis. 
Both  Albert  and  Lesan  thus  became  interested,  as  investigators,  in 
Lewis'  aiFairs,  and  each  independently  volunteered  to  assist  Lewis 
to  get  back  upon  his  feet.  Albert  proposed  to  play  the  part  of 
peace-maker  with  Cortelyou,  and  through  him  with  Lawshe,  Mad- 
den's  successor  as  third  assistant.  Lesan,  himself  an  experienced 
advertising  man  and  promoter  of  exceptional  business  ability,  pro- 
posed a  project  for  the  reorganization  of  the  Lewis  Publishing 
Company,  under  the  auspices  of  former  Governor  David  R. 
Francis.  Both  men  were  willingly  commissioned  by  Lewis  to 
undertake  their  respective  ventures  in  this  behalf.  Both  lines  of 
investigation  were  gotten  under  way  immediately  after  Albert's 
visit.  Such  were  the  developments  concerning  which  Lewis  wired 
to  McWade  on  July  13. 

Lewis  addressed  to  Lesan,  at  the  Auditorium  Annex  Hotel,  Chi- 
cago, on  the  day  following  Albert's  departure  from  St.  Louis,  a 
letter  opening  as  follows: 

I  want  you  to  convey  for  me  to  Governor  Francis,  in  asking  him  and 
other  gentlemen  to  come  on  the  board  of  the  Lewis  Publishing  Company 
and  take  its  management,  my  absolute  assurance  that  it  is  my  firm  intention 
and  purpose  to  be  guided  by  them  in  all  things.  I  shall  subject  myself 
fully,  in  all  matters  relating  to  the  business,  to  their  wisdom,  direction  and 
advice.  Pending  this  negotiation,  I  shall  abstain  from  any  further  com- 
ments in  the  Daily  calculated  to  complicate  the  matter  or  arouse  further 
animosities. 

Lewis  then  expressed  his  belief  in  the  future  of  the  Lewis 
Publishing  Company  when  its  magazines  were  reinstated.  He  said 
that  Albert,  after  completing  his  investigation,  felt  strongly  that 
the  representative  men  of  St.  Louis  should  come  to  the  protection  of 
the  company  to  prevent  its  being  done  to  death.  He  then  expressed 
the  hope  that  Governor  Francis  might  agree  to  take  the  leadership 
in  the  proposed  reorganization. 

Lesan  wired  Lewis  from  New  York  on  July  27  as  follows:  "En- 
couraging interview  today.  Governor  Francis  asks  that  you  mail 
me  Saturday,  special  delivery.  Hotel  Belmont,  full  list  of  accounts 
and  bills  payable  of  the  company,  with  dates  when  they  mature 
and  estimate  of  money  needed."  On  August  2,  however,  he  wired: 
"Sickness  in  governor's  family  caused  holding  up  of  negotiations." 
Later,  on  August  7,  he  dispatched  this  additional  telegram:  "Leave 
for  Chicago  today;  home  Friday.  Have  much  more  encouraging 
report  to  make."  Further  detail  is  supplied  by  Lesan's  letter  to 
Frank  of  August  2,  dated  at  the  Hotel  Belmont,  New  York.  He 
saj-'s : 

Governor  Francis  said  he  could  not  do  anything  in  the  Lewis  matter, 
without  going  back  to  St,  Louis.  Developments  here  have  made  him  de- 
cide he  must  stay  in  the  East  and  finish  his  holiday.    He  cannot  do  any- 


686  THE  SIEGE  OF  UNIVERSITY  CITY 

thing  in  the  matter  until  lie  gets  back,  which  may  not  be  before  September 
15.  He  told  me  of  a  talk  with  the  }>ublisher  of  the  New  York  Times,  in 
which  the  latter  expressed  great  interest  in  the  Lewis  case  and  intimated 
that  he  would  like  to  open  the  matter  up  in  his  paper  and  see  that  Lewis 
got  a  square  deal.  It  seems  a  shame  that  this  proposition  must  go  by 
the  board  because  St.  I^ouis  men  won't  take  hold  of  it,  when  there  is  so 
much  in  it  for  them,  besides  the  working  out  of  a  public  proposition  and 
righting  of  what  I  believe  to  be  a  great  wrong. 

All  being  apparently  quiet,  both  at  St.  Louis  and  Washington, 
Lewis  took  occasion  early  in  August  to  make  a  flying  trip  to  New 
York  to  further  the  matter  of  a  proposed  bond  issue  on  the  real 
estate  of  the  University  Heights  company.  This  proposition  was 
along  the  lines  of  tJie  bond  issue  for  seven  hundred  and  fifty  thou- 
sand dollars  which  had  fallen  through  in  1905,  by  reason  of  the 
first  postoflice  investigation.  He  left  St.  Louis  for  New  York  on 
August  9.  On  August  11  Albert  arrived  from  Washington  and 
met  Lewis  at  the  Hotel  Belmont,  preliminary  to  a  proposed  con- 
ference between  himself  and  Cortelyou.  The  day  following,  August 
12,  the  conversation  took  place  to  which  reference  is  made  in 
Albert's  written  memorandum  to  Lawshe.  He  then  caused  Cor- 
telyou to  feel  the  whole  effect  of  the  personal  impression  made  upon 
him  by  his  investigation  at  St.  Louis.  The  sequel  will  show  that 
this  conference  bore  fruit  almost  immediately.  Meantime,  Lewis' 
attention  was  distracted  by  news  from  University  City  of  a  fresh 
assault  upon  his  one  remaining  fortification.  This  was  an  effort 
to  silence  his  Gatling-gun,  the  Woman's  National  Daily.  While 
Albert  was  engaged  in  his  conference  with  Cortelyou,  looking  to 
terms  of  peace,  the  following  telegram,  signed  by  W.  E.  Miller, 
secretary  of  the  company,  was  received  by  Lewis   from  the  seat 

of  war: 

Five  men  here  from  third  assistant  postmaster-general's  office  to  inves- 
tigate Daily  subscription  list.  They  present  letter  from  third  assistant 
that  the  right  of  the  Daily  to  the  second-class  entry  is  questionable.  Have 
allowed  them  to  start  work. 

THE  GETTY  COMMISSION. 

This  bulletin  from  the  front  was  confirmed  the  day  following 
by  a  letter  of  transmittal  accompanying  a  copy  of  the  following 
communication  from  Third  Assistant  A.  L.  Lawshe  to  the  Lewis 
Publisliing  Company,  under  date  of  July  26.     He  says: 

Referring  to  the  Woman's  National  Daily,  published  by  you  at  St.  Louis, 
Mo.,  I  have  to  inform  you  that  the  right  of  this  publication  to  pass  in  the 
mails  at  the  second-class  rate  of  postage  is  questioned.  Upon  examina- 
tion of  the  departmental  record  of  the  case,  it  is  noted  that  at  the  time  the 
postmaster  at  St.  l>ouis  was  authorized  to  accept  mailings  of  the  publica- 
tion at  the  usual  second-class  rates  of  postage,  there  was  doubt  as  to  the 
propriety  of  the  action.  I  have,  therefore,  designated  the  following  gentle- 
men, \V."  B.  Getty,  H.  A.  Kelly,  A.  E.  Furniss  and  Wm.  I>.  Moore,  a  com- 
mission to  investigate  the  case  of  the  Woman's  National  Daily.  I  beg  to 
request  that  you  will  afford  this  commission  every  facility  for  procuring 
the  information  desired  by  it,  in  order  that  the  facts  in  regard  to  the 
publication  may  be  ascertained. 

A  controversy  immediately  arose  between  the  Getty  Commission 
and  the  company,  touching  the  right  of  the  latter  to  be  represented 


''■First  (Class  11)  Chapter  House  of  the  American  Woman's  League,  Edwardsville, 
Illinois.  Memhers  and  quests  on  the  occasion  of  an  official  visit  by  the  executive 
officers  from   University   City 

-Interior  of  same.  Observe  in  the  foreground  the  Columbia  phonograph  and  case 
of  traveling  library  records  with  which   the  League  Chapter  Houses  were  equipped 


r 


THE  DREYFUS  CASE  OF  AMERICA  689 

during  the  count.  This  privilege  had  been  accorded  during  the 
investigation  made  by  the  Fettis  Commission.  Madden's  policy  in 
this  regard,  however,  was  overruled  by  his  successor,  and  the  policy 
of  inscrutable  secrecy  was  insisted  upon.  Keenly  sensitive  to  the 
dangers  of  another  secret  investigation,  Lewis  wired  Miller  on 
August  13  as  follows:  "Let  men  from  third  assistant's  office  have 
free  access  to  subscription  reports  of  Daily,  but  insist  that  one  of 
our  representatives  be  present  at  all  times." 

After  reporting  to  Cortelyou,  Albert  returned  to  Washington  and 
communicated  to  Lawshe  by  means  of  the  memorandum  above 
quoted  the  substance  of  his  conversation  with  Cortelyou,  and  the 
latter's  views.  As  a  result  of  tliis  interview  he  telephoned  Lewis 
on  August  17,  advising  him  that,  in  his  opinion,  a  new  application 
for  second-class  entry  would  be  received  and  favorably  passed 
upon  by  the  Department.  The  effect  of  such  a  message  on  a  man 
of  Lewis'  ojatimistic  and  buoyant  temperament  may  easily  be  imag- 
ined. His  enthusiasm  went  to  fever  heat.  The  clouds  of  warfare 
which  had  so  long  lowered  upon  the  horizon  seemed  instantly  dis- 
pelled. The  whole  world  was  bright  again.  The  misgivings  and 
suspicions  which  had  poisoned  his  mind  against  all  postoffice  officials 
now  seemed  unfounded  in  so  far  as  Lawshe  and  the  Getty  Com- 
mission authorized  by  him  were  concerned.  Hence,  on  August  17, 
he  wired  IMiller  as  follows;  "For  reasons  just  developed,  notify 
Washington  commission  that  full  and  free  access  and  facilities  will 
be  given  it  to  make  investigation  of  Dailj^  without  restriction  or 
reserve."  On  that  day  he  also  instructed  the  officers  of  the  com- 
pany at  St.  Louis  to  make  all  preparations  for  bringing  out  the 
October  number  of  the  Magazine. 

Prospect  of  renewed  activities  on  the  Woman's  Magazine  filled 
L^niversity  City  with  a  pleasant  bustle  and  confusion.  The  old 
employees  were  summoned.  The  editorial  staff  once  more  set  to 
work  to  make  the  forthcoming  number,  according  to  the  unfailing 
tradition  of  all  magazine  editorial  writers  since  the  beginning,  "the 
best  issue  ever  published."  Orders  for  paper  stock  were  placed 
with  the  mills.  Other  supplies  were  replenished.  Meantime,  Lewis 
received  from  the  manager  of  his  Washington  news  bureau  the 
account  of  an  extended  interview  with  Albert.     Said  McWade: 

There  is  no  doubt  that  Cortelyou,  with  whom  Albert  has  presumablj 
been  acting,  is  scared  and  seeks  to  escape  being  called  into  court  in 
Washington  and  exposed.  I  understand  from  Albert  that  Cortelyou  ex- 
pects us  to  abandon  proposed  proceedings  in  Washington,  and  other 
suits,  in  the  event  our  magazines  and  the  Daily  are  properly  admitted 
to  the  second  class  and  the  illegally  extorted  funds  restored.  Lawshe  has 
abandoned  all  idea  of  raising  a  hitch  over  the  nominal  rate  and  adver- 
tising clause  of  the  second-class  law,  but  asks  that  you  satisfy  him  as 
to   subscriptions. 

Both  are  very  desirous  that  you  will  not  hereafter  attack  Cortelyou  or 
the  Department,  in  your  editorials.  I  pointed  out  that  the  vigorous  pound- 
ing which  you  have  given  them  was  necessary  under  the  circumstances.  I 
also  reminded  him  that  other  leading  editors  are  becoming  interested.  A 
representative  of  influential  Texas  newspapers  has  called  upon  me  for  the 
whole  story,  for  campaign  and  other  purposes.    Albert  admitted  it  could  be 


690  THE  SIEGE  OF  UNIVERSITY  CITY 

made  a  great  campaign  issue.  I  reminded  Albert  that  Cortelyou  had  not 
yet  written  Lawshe  the  letter  which  he  had  promised  to  forward  after  his 
conference  with  Albert.  The  latter  replied  that  Lawshe  would  doubtless 
get  the  letter  within  the  next  few  days.  "Well,"  I  said,  "it  is  now  thor- 
oughly understood  that  the  Daily  and  tlie  two  magazines  arc  to  be  formally 
and  legally  admitted;  the  illegally  extorted  money  is  to  be  promptly  re- 
stored; the  Government,  through  the  Department  of  Justice,  is  to  go  into 
court  and  withdraw  tlie  indictments;  the  Department  hereafter  is  to  treat 
the  publications  as  other  newspapers  and  magazines  are  treated.  In  re- 
turn for  that,  we  are  to  withdraw  our  libel  suits,  and  especially  refrain 
from  a  libel  suit  against  Cortelyou.  We  are,  however,  to  proceed  with 
our  cases  against  Wyman  and  Fulton."  "That's  right,"  said  Albert,  "Wy- 
man  is  only  a  fathead,  and  Fulton  made  use  of  him.  Fulton  deserves  to  be 
punished,  and  we  are  satisfied  to  make  him  the  scapegoat.  Meantime,  Ful- 
ton can  be  transferred  to  some  other  place."  Cortelyou  is  worried.  He 
fears  Madden  and  Classic  have  joined  forces  with  us.  As  Albert  put  it 
this  morning:  "Lawshe  tells  me  you  have  Classic  on  your  side,  and  that  he 
has  thrown  the  Department  ever." 

The  day  following  this  communication^  Albert  addressed  the  fol- 
lowing brief  note  to  Lewis  at  the  Hotel  Belmont,  New  York:  "Can 
you  come  to  Washington  Friday,  the  23d  instant.^  I  have  talked 
with  ]\Ir.  Lawshe  and  think  it  needful  you  should  hear  from  him, 
first-hand,  his  views  on  tlie  readmission  of  your  magazines  to  the 
second-class  privilege."  Lewis  responded  to  this  invitation  by  a 
flying  trip  to  Washington  on  the  date  mentioned.  He  then,  for 
the  first  time,  met  the  new  third  assistant.  The  interview  was  most 
amicable.  He  returned  to  New  York  in  high  feather  to  complete 
his  financial  arrangements.  Here  he  received,  on  August  27,  the 
following  from  General  McWade: 

I  have  learned,  from  inside  sources,  that  Cortelyou  and  Meyer  are  at 
outs  to  a  certain  extent,  and  that  Frank  Hitchcock  and  the  other  assist- 
ants all  side  with  Meyer.  The  opinion  seems  to  be  that  Cortelyou  is  no 
longer  as  powerful  with  the  President  as  formerly.  Each  day  evidently 
weakens  Cortelyou's  influence  with  the  Department.  Yesterday,  he  sent  a 
request  that  the  records  of  our  case  be  forwarded  to  him.  I  understand 
that  copies  have  been  submitted  to  him  today.  These  facts  show  you  the 
actual  condition  of  affairs  in  the  Department,  and  from  them  you  can  form 
your  own  judgment. 

THE    MANHATTAN    CAFE    INCIDENT. 

Oddly  enough,  on  this  very  day  occurred  the  episode  of  Lewis* 
chat  with  Cortelyou  in  the  cafe  of  the  ISIanhattan  Hotel  in  New 
York,  one  of  the  most  dramatic  incidents  in  the  entire  history  of 
the  Siege.  I-ewis'  own  story  of  this  casual  but  momentous  contact 
of  the  two  chief  personalities  of  our  story,  wherein,  but  for  an  odd 
freak  of  fate,  their  mutual  differences  might  have  been  perma- 
nently reconciled,  was  thus  told  at  the  Ashbrook  Hearings: 

I  went  down  to  New  York  in  the  latter  part  of  August,  1907.  T  was 
.stopping  at  the  Belmont,  but  one  day  went  across  the  street  to  lunch  at 
the  Manhattan  Cafe.  As  I  went  in  I  saw  Mr.  Cortelyou  sitting  at  a  table, 
with  quite  a  large  party.  That  was  about  the  height  of  the  panic  of  1907. 
Things  were  greatly  stirred  up  then.  Mr.  Cortelyou  as  secretary  of  the 
treasury,  was  much  in  the  public  eye.  As  I  went  in  he  bowed  to  nie,  and  I 
to  him.  I  went  over  and  sat  down  at  a  single  table.  A  moment  afterward 
I  was  conscious  of  someone  standing  by  my  side.  I  looked  up  and  saw 
Mr.  Cortelyou.     He  put  out  his  hand  and  I  got  up  and  shook  hands  with 


THE  DREYFUS  CASE  OF  AMERICA  691 

him.  He  then  sat  down  on  the  opposite  side  of  the  table,  and  we  discussed 
the  wliole  matter.  I  should  say  we  talked  in  the  neighborhood  of  twenty 
minutes  or  a  half  hour.  The  discussion  became  quite  animated  once  or  twice, 
but  was  entirely  friendly.  Cortelyou  expressed  regret  at  what  had  hap- 
pened. He  said  that  if  1  would  go  down  to  Washington,  I  probably  would 
find  that  the  whole  matter  could  be  straightened  out  very  quickly. 

I  went  to  Washington  that  night.  I  called  on  Mr.  Lawshe,  who  was  then 
third  assistant,  and  went  over  the  matter  with  him.  He  said  the  publica- 
tions would  De  admitted.  Our  talk  was  very  friendly.  All  the  bitter  feel- 
ing seemed  to  have  gotten  out  of  it.  Mr.  Lawshe  said  he  was  not  responsi- 
ble for  things  in  the  past,  and  that  we  would  take  a  fresh  start.  I  said 
that  was  agreeable  to  me.  I  only  wanted  to  save  the  institution  from 
wreck  and  ruin,  and  build  it  up  again.  I  called  attention  to  the  Citizens' 
Committee  count  and  gave  him  a  memorandum  of  about  what  the  subscrip- 
tion list  was  when  the  papers  were  thrown  out  of  the  mails.  It  was  then 
getting  toward  fall.  All  of  the  advertising  patronage  of  the  publication 
for  the  entire  fall  and  winter,  would  depend  upon  our  bringing  out  the  fall 
issues.  We  had  then  been  out  of  the  mail  several  months.  During  that 
time  our  business  had  virtually  been  taken  from  us  by  our  competitors. 
There  was  just  one  chance  of  re-establishing  the  property.  If  we  could 
start  clean  with  the  October  issue,  and  assure  advertisers  all  over  the 
United  States  that  the  controversy  was  ended,  we  could  perhaps  hold  a 
large  part  of  the  business.  The  feeling  among  advertisers  was  strongly  in 
our  favor.  I  laid  all  that  before  Mr.  Lawshe,  and  he  told  me  to  go  right 
ahead  and  get  out  the  October  issue.  He  said  that,  so  far  as  he  could  see, 
there  would  be  no  further  controversy-  They  would  grant  us  re-issue.  I 
wired  St.  Louis  to  print  the  October  issue  and  make  application  for  re- 
entry. 

When  I  reached  Cincinnati  on  my  way  home,  I  picked  up  a  morning 
paper.  It  contained  a  long  article  to  the  effect  that  Mr.  Cortelyou  had 
taken  to  the  woods.  It  was  headed  "Lewis  Wins."  It  looked  as  if  I  had 
inspired  the  article,  although,  in  fact,  I  had  not.  The  New  York  papers 
started  this  story.  Some  of  them  had  long  articles  on  the  subject.  This 
was  probably  due  to  the  excited  conditions  in  New  York.  Mr.  Cortelyou 
was  a  very  important  personage  at  the  time,  on  account  of  the  panic.  The 
reporters  were  following  him  very  closely.  My  talk  with  him  in  the  Manhat- 
tan Cafe  had  doubtless  been  observed.  I  was  probably  followed  by  a  re- 
porter, who  put  two  and  two  together  and  made  up  the  story.  I  had  nothing 
whatever  to  do  with  it. 

All  Lewis'  relations  with  the  PostofRce  Department  seem  to 
have  been  under  the  influence  of  some  unlucky  star.  Publicity  thus 
given  to  what  the  public  could  not  help  but  regard  as  interference 
by  Cortelyou  in  the  affairs  of  a  Department  with  which  he  had 
severed  his  connection,  could  hardly  have  come  at  a  more  inoppor- 
tune time.  Cortelyou's  loss  of  prestige  with  the  President,  the  grow- 
ing prejudice  against  him  in  the  PostofSce  Department  and  the  criti- 
cisms that  were  being  leveled  at  him  in  the  press^  by  reason  of  his 
close  relations  with  Wall  Street  during  the  panic  of  1907,  all  con- 
spired to  make  peculiarly  objectionable  the  idea  that  he  was  dictating 
to  his  successor.  The  publicity  already  given  to  Lewis'  affairs,  and 
the  unrest  among  publishers  because  of  the  suppression  of  the 
Lewis  publications,  gave  great  news  value  to  this  item,  and  it  was 
widely   circulated. 

The  untoward  effects  of  this  most  unhappy  "scoop"  of  some 
nameless  metropolitan  reporter  were  almost  as  injurious  to  Lewis 
as  the  famous  Post-Dispatch  extra.    The  news  was  promptly  flashed 


692  THE  SIEGE  OF  UNIVERSITY  CITY 

over  the  wire  to  the  St.  Louis  papers.  The  St.  Louis  Triumvirate 
were  put  upon  their  guard.  Wynian  and  Fulton  promptly  expostu- 
lated against  any  such  surrender  by  the  Washington  authorities. 
Meantime,  Cortelyou  and  Lawshe,  recognizing  the  publicity  value 
of  the  story  to  Lewis  in  his  advertising  campaign,  naturally  sup- 
posed he  had  given  or  inspired  an  interview  to  the  press.  The 
tension  between  Cortelyou  and  the  officials  of  the  Postoffice  De- 
partment was  stretched  to  the  breaking  point.  The  good  effect  of 
Albert's  negotiation  and  report  was  nullified.  Lawshe  now  stood 
upon  his  dignity  and  insisted  upon  setting  himself  right  before  his 
official  associates  and  the  public  through  a  statement  to  the  press. 

LAWSHE    LOSES    CONFIDENCE. 

The  most  fatal  consequence  was  the  loss  of  confidence,  on  the  part 
of  Lawshe,  in  Lewis'  discretion.  In  place  of  the  sense  of  security 
with  which  Lawshe  had  discussed  with  Lewis  personally  the  re- 
admission  of  his  publications,  the  former  seems  to  have  reached,  by 
a  natural  revulsion  of  feeling,  the  opposite  extreme  of  suspicion 
and  distrust.  His  mind  was  thus  open  to  receive  the  whole  poison- 
ous mass  of  accusations  against  Lewis,  which  were  still  festering  in 
the  secret  archives  of  the  inspectors'  bureau.  The  renewed  demands 
of  the  chief  inspector  at  Washington,  Inspector-in-Charge  Fultori 
and  the  postmaster  at  St.  Louis  thus  found  Lawshe  in  a  receptive 
attitude.  The  whole  combination  of  circumstances  caused  him  to 
assume  and  stubbornly  adhere  to  the  position  that  he  would,  there- 
after, show  Lewis  not  even  the  slightest  favor.  On  the  contrary,  he 
announced  that  he  would  take  no  action  whatever  until  the  matter 
was  presented  to  him  through  the  usual  departmental  routine.  This 
proposition,  seemingly  fair,  had  all  the  effect  of  the  most  active 
hostility  upon  the  part  of  Lawshe,  since  it  opened  the  way  for  the 
inspectors  and  the  postmaster  at  St.  Louis  to  continue  their  obstruc- 
tive and  destructive  tactics.  Hardly  had  Lewis  reached  home  when 
he  received  from  Dunn  this  telegram,  dated  Washington,  August  31 : 

Third  Assistant  Lawshe  issued  the  following  statement  today:  "It  is 
alleged  in  some  of  the  recent  press  reports  relative  to  the  attitude  of  the 
Postoffice  Department  toward  Mr.  E.  G.  Lewis,  of  the  Lewis  Publishing 
Company  of  St.  Louis,  Mo.,  that  the  Department's  position  has  not  been 
correctly  stated.  The  following  statement  is  therefore  given  to  the  press. 
Mr.  Lewis,  president  of  the  Lewis  Publishing  Company  of  St.  Louis,  Mo., 
and  the  publisher  of  the  Woman's  Magazine  and  Woman's  Farm  Journal, 
recently  excluded  from  second-class  rates  of  ])ostage,  was  in  Washington 
this  week  and  was  granted  an  interview  by  the  third  assistant  postmaster- 
general,  who  has  jurisdiction  over  the  question  involved.  Mr.  Lewis  wanted 
to  know  if  the  Department  would  receive  and  consider  applications  for  the 
readmission  of  his  publications  to  the  enjoyment  of  the  second-class  rates 
of  postage.  He  was  informed  that  he  would  be  given  the  same  treatment 
as  would  be  extended  to  any  other  publisher  under  similar  circumstances. 
He  was  told  that  he  might  present  new  applications  alleging,  with  respect 
to  the  things  to  which  the  Department  had  previously  objected,  that  the 
character  of  the  publications  had  changed,  since  their  exclusion  from  the 
second-class  rates;  and  that,  upon  such  application,  the  third  assistant 
postmaster-general  would  act  upon  the  cases  upon  their  merits,  without 
regard  to  anything  that  had  previously  occurred.  The  third  assistant  made 
it  plain  to  Mr.  Lewis  that  he  would  be  treated  no  better  and  no  worse  than 


THE  DREYFUS  CASE  OF  AMERICA  693 

any  other  publisher  who  might  come  before  him.  It  is  the  purpose  of  the 
Postoffice  Department  to  give  Mr.  Lewis  every  right  to  which  he  Is  entitled 
under  the  law. 

All  this,  when  translated  from  the  language  of  diplomacy  into 
that  of  every-day  life,  amounted  to  a  declaration  of  war.  It  meant 
that  Lewis,  having  been  guilty,  in  Lawshe's  opinion,  of  a  breach  of 
confidence,  could  henceforth  expect  to  enjoy  no  further  countenance 
nor  favors.  Lewis  instructed  his  Washington  correspondent  to 
disclaim,  in  his  behalf,  any  knowledge  as  to  how  the  news  of  his 
interview  with  Cortelyou  got  into  the  press.  Dunn  reported  on 
May  3  as  follows: 

Lawshe  was  much  pleased  that  the  publication  did  not  originate  with  you. 
He  told  me  that  he  had  traced  the  matter  and  found  that  the  first  publica- 
tion was  a  Washington  dispatch  to  the  Indianapolis  News.  Some  hint 
doubtless  came  from  Overstreet,  or  some  other  person  who  knew  that  things 
were  moving.  Lawshe  was  somewhat  aggrieved  that  his  official  statement 
was  not  published  in  the  Eastern  papers,  but  recognizes  that  we  were  not 
responsible.  He  told  me  it  placed  the  Department  in  an  attitude  it  can't 
stand  for.  Cortelyou  and  Meyer  do  not  like  to  have  it  known  that  the 
initiative  came  from  the  Government  through  Albert.  He  said  that  nothing 
could  be  done  until  the  publication  was  offered  for  mailing,  after  it  was 
printed.  I  asked  him  if  the  St.  Louis  postmaster  would  not  pass  upon  the 
admissibility  of  the  publication.  He  replied  in  the  aflBrmative,  but  said 
there  was  no  fear  that  Wyman  would  not  act  right  and  carry  out  the  law. 
Now,  while  this  talk  is  fair  enough  from  Lawshe,  it  gives  the  St.  Louis 
gang  an  opportunity  to  hold  up  your  issue,  pending  examination  and  refer- 
ence to  the  Department.  AVyman  will  not  be  given  any  instructions  from 
here  to  admit  your  magazines.  Will  he  not  deny  them  admission,  follow- 
ing out  the  old  Cortelyou  order,  until  he  has  some  intimation  or  notice 
to  the  contrary? 

LESAN-FRANCIS  NEGOTIATION. 

The  news  that  Lewis'  publications  were  about  to  be  restored  to 
the  mails  brought  Lesan's  efforts  for  a  reorganization  of  the  com- 
pany to  a  climax.  On  September  3,  he  addressed  a  lengthy  letter 
to  Governor  Francis  at  New  York,  enclosing  clippings  from  the 
St.  Louis  papers,  indicating  a  settlement  of  the  case.  After  de- 
scribing the  status  of  Albert's  negotiations,  he  said: 

A  few  weeks  ago,  Mr.  Lewis  made  an  appeal  to  his  stockholders  for  one 
hundred  and  fifty  thousand  dollars,  covered  by  a  mortgage  on  the  Woman's 
National  Daily  mechanical  plant.  About  forty  thousand  dollars  have  been 
subscribed.  With  favorable  action  by  the  Government,  he  feels  confident 
he  can  procure  the  rest.  Another  matter  has  come  up  in  this  connection. 
You  remember  the  gentleman  I  introduced  to  you  at  the  Belmont  in  New 
York,  Mr.  J.  V.  Dittemore,  formerly  vice-president  of  the  Van  Camp  Pack- 
ing Company,  of  Indianapolis?  He  has  sold  his  interest  in  that  concern 
for  a  large  sum,  which  he  has  in  an  Indiana  bank,  in  cash.  Through  me  he 
has  become  interested  in  the  Lewis  Publishing  Company,  and  after  an  ex- 
tended interview  with  Mr.  Lewis,  returns  here  this  week  to  confer  definitely 
about  taking  a  good  interest  in  the  business  and  assuming  financial  and 
business  management  of  the  publications.  Mr.  Lewis  gives  the  greatest 
evidence  of  increased  wisdom  and  more  sober  judgment  as  the  result  of  his 
responsibilities  and  experiences  during  the  last  two  years.  Everybody  is 
congratulating  him  on  his  great  victory.  A  great  deal  of  advertising  is  be- 
ing sent  in  for  his  October  number.  Nevertheless,  he  is  all  the  more  de- 
termined to  demonstrate  his  all-around  business  capabilities,  by  securing 
a  strong  board  of  directors,  under  whose  supervision,  he,  with  Mr.  Ditte- 


694  THE  SIEGE  OF  UNIVERSITY  CITY 

more  and  perhaps  Mr.  Walter  B.  Stevens,  would  actually  manage  the  busi- 
ness. He  says  he  will  be  happy  to  co-operate  with  and  be  amenable  t© 
this  board. 

Governor  Francis  was  then  requested  to  assume  the  leadership  in 
the    proposed    reorganized    directorate.      On    December    12,    Lewis 
wrote  to  one  of  his  associates  that,  after  extended  conferences  by 
telegraph  with  Governor  Francis,  it  had  been  finally  decided  to  meet 
him  in  New  York  for  a  decisive  conference.     Subsequently,  a  com- 
plete plan  of  reorganization  was  presented  to  Francis  for  his  ap- 
proval.     Before   a  decision  could  be   reached,  however,   it  became 
known  that  the  second-class  entry  had  once  more  been  held  up  and 
that  Lawshe's  promises  of  justice  at  the  hands  of  the  Department 
were  as  vague  as  those  of  Cortelyou.     By  protracted  delay  in  for- 
warding   Lewis'    application    to    Washington,    Postmaster    Wyman 
caused  the  loss  not  only  of  the  October,  November  and  December 
issues  of  the  Woman's  Magazine,  but  prevented  the  proposed  reor- 
ganization.    He  succeeded,  further,  in  cutting  down  the  subscription 
list  of  the  Woman's  Magazine  to  about  one-third  its  former  circula- 
tion.    In  this  he  was  aided  by  certain  new  regulations  of  the  third 
assistant,  whereby  the  sample  copy  privilege  was  largely  restricted. 
Early   in   September,   while   the   October  issue   of  the   Woman's 
Magazine  was  in  press,  Lewis  kept  up  an  active  correspondence  with 
Dunn,  McWade  and  Albert.     He  was  thus  in  close  touch  with  af- 
fairs in  Washington.     Lawshe  refused  to  consider  the  application 
of  the  Woman's  Magazine  until  it  had  been  passed  upon  and  sub- 
mitted in  due  course  by  the  postmaster.     He  declined  to  give  any 
intimation  of  his  probable  action,  or  to  in  any  way  discuss  or  con- 
sider the  subject.     The  general  tenor  of  the  reports  submitted  to 
Lewis  indicated  that  the  notoriety  given  the  affair  by  the  press  was 
most  annoying  to  Cortelyou  and  Meyer,  and  was  being  skillfully 
used  to  create  prejudice  against  Lewis.     As  days  passed  it  became 
more   and  more   apparent  that  Lewis'   opponents  were   fighting   to 
have   his   subscription   list   cut   down   to   the   lowest   possible   limit. 
This  would  afford  some  effective  defense  of  Cortelyou's   decision. 
Lawshe   showed    an   increasing   disposition  to   defend  Wyman   and 
Fulton  against  the  strictures  of  Albert's  report,  and  to  take  excep- 
tions to  Lewis*  views  and  conduct.     Albert,  however,  wrote  Lewis 
on  September  11  an  optimistic  letter,  describing  an  interview  Avith 
Lawshe.     The  purport  is  summed  up  in  the  following  paragraph: 
Dunn  and  I  both  came  awar  happy.    That  ought  to  tell  you  more  about 
our  talk  than  reams  of  typewriting.     Lawshe  is  cautious.     He  has  evidently 
felt  the  "come  back"  of  Fulton  and  Wyman.     He  must  make  sure  as  he 
goes,  but  he  has  received  from  Mr.  Meyer  directly,  and  also  from  Mr.  Cor- 
telyou, word  that  the  stand  he  has  taken  of  pivine  you  abstract  justice  has 
their  entire  support.     I  think  he  is  mighty  pleased  with  the  opportunity  of 
givinsf  you  a  genuine  square  deal.     I  have  good  reason  for  believing  that 
I^awshe   and   Cortelyou  have  quarreled   over  an   attempt   by  the  latter  to 
butt  in,  and  that  Mr.  Merer  has  helped  mark  both  the  esteemed  postmaster 
and  inspector-in-charge  out  of  the  case. 

The  application  for  second-class  entry  of  the  Woman's  Magazine 
was  filed  with  the,  St.  Louis  postmaster  on  September  18.      Lewis 


THE  DREYFUS  CASE  OF  AMERICA  695 

on  that  day  left  St.  Louis  for  New  York  for  a  final  conference  with 
Governor  Francis.  The  application  was  promptly  transmitted, 
and  Lewis  was  duly  informed  of  its  arrival.  After  the  conference 
at  New  York  he  proceeded  to  Washington,  from  which  point  he 
informed  the  officers  of  the  company  that  the  details  of  the  re- 
organization probably  Avould  be  concluded  within  a  few  days. 
Dittemore,  he  said,  had  come  to  a  favorable  decision.  After  con- 
ference with  Lawshe,  he  wired  University  City  on  September  21 
as  follows:  "I  start  home  tonight.  The  Getty  Commission  is  to 
make  an  immediate  review  of  magazine  subscriptions  and  report 
when  certificate  will  be  issued."  So  favorable  had  been  the  New 
York  conference  that  the  advertisement  of  the  seven  per  cent  notes 
in  the  Woman's  National  Daily  was  discontinued.  St.  Louis  finan- 
ciers had  decided  to  take  over  the  balance  of  the  issue  in  a  lump. 

MADDEN  PUBLISHES  HIS  STORY. 

The  first  session  of  the  Sixtietli  Congress  was  signalized  by  the 
introduction  of  several  bills  growing  more  or  less  directly  out  of 
the  Siege  of  University  City.  All  these  were  submitted  to  Lewis' 
Washington  representatives,  and  the  influence  of  the  Lewis  publica- 
tions was  urged  in  their  support.  Among  these  may  be  mentioned 
the  Wiley  bill,  which  was  introduced  on  December  2,  to  prevent 
the  exclusion  of  a  newspaper  or  periodical  from  the  United  States 
mails  as  second-class  matter  after  having  been  accorded  such  privi- 
lege, without  due  process  of  law. 

After  leaving  the  Department  in  the  spring  of  1907,  General 
Madden  confided  to  McWade  his  purpose  of  compiling,  from  copies 
of  correspondence  and  departmental  records  in  his  possession,  a 
personal  story  of  the  Government's  attitude  toward  Lewis.  In 
carrying  out  this  work  he  gave  a  complete  and  comprehensive  review 
of  the  official  acts  of  the  postmaster-general  upon  the  state  of  facts 
forming  the  basis  for  the  chapter,  "Cortelyou  Shows  His  Hand,"  in 
this  volume.  During  the  summer  Madden,  in  addition  to  briefing 
the  legal  points  presented  by  Lewis'  case  against  the  Department, 
completed  the  manuscript  of  his  book,  "The  Shame  of  the  United 
States  Government."  Through  General  McWade,  Lewis  was  kept 
informed  of  Madden's  progress.  In  January,  1908,  Madden  took 
up  his  residence  in  St.  Louis,  having  accepted  a  retainer  from  Lewis 
about  the  first  of  September  previous.  Shortly  thereafter  he  ar- 
ranged with  the  National  Book  Company  of  Detroit,  Mich.,  for 
the  publication  of  his  book.  Advance  copies  were  issued  on  April 
10.  From  a  note  written  by  Lewis  to  Madden,  under  date  of 
April  16,  the  following  is  quoted: 

The  St.  Louis  Republic  gave  your  story  about  two  full  columns  on  the 
front  page.  The  Chicago  Inter-Ocean  and  Record-Herald  both  ran  full  di- 
gests of  the  book's  contents,  under  scare  heads.  I  understand  one  of  the 
Washington  papers  gave  tlie  book  two  columns.  It  is  now  beginning  to  get 
back  into  the  country. 

The  St.  Louis  Globe-Democrat  absolutely  ignored  it.  The  Post-Dispatch 
took  a  left-handed  pick  at  us  and  the  book.  The  Times,  which  had  been 
indorsing  Cortelyou  for  the  presidency,  had  never  a  word  to  say.    Cortel- 


696  THE  SIEGE  OF  UNIVERSITY  CITY 

you  himself,  as  usual,  has  nothing  to  say,  except  that  he  has  given  out  a 
statement  that  he  was  not  in  any  wise  responsible  for  the  indictments.  This, 
in  itself,  is  rather  significant. 

The  first  effect  of  Madden's  story  was  to  strengthen  the  popular- 
ity of  the  Crumpacker  bill.  This  measure,  however,  was  blocked  by 
the  Foster  bill,  which  had  the  approval  of  the  Administration. 
Foster,  as  chairman  of  the  Judiciary  Committee,  was  in  a  position 
to  block  the  Crumpacker  bill,  and  did  not  hesitate  to  do  so.  Dunn 
thus  reports  the  situation  on  April  8:  "Foster  tells  me  he  would 
like  to  have  his  bill  put  forward  if  he  can  come  to  an  understand- 
ing with  Crumpacker.  There  is  really  a  little  rivalry  between  the 
two  for  the  credit  of  advocating  a  bill  which  will  provide  a  judicial 
review  of  fraud  orders."  In  other  words,  sentiment  had  changed 
and  was  now  almost  wholly  favorable  to  Lewis'  principal  contention, 
namely,  that  the  postmaster-general's  arbitrary  power  should  be 
subject  to  judicial  review. 

Now  came  Lewis'  second  trial,  conducted  by  Judge  Riner.  It 
continued  from  May  7  to  May  14,  and  resulted  in  Lewis'  acquittal. 
Two  days  later  the  Foster  bill  was  reported  to  the  Judiciary  Com- 
mittee by  a  sub-committee  of  that  body  as  a  substitute  for  the 
Crumpacker  bill.  Some  of  the  objectionable  features  of  the  original 
Foster  bill  were  eliminated,  and  various  amendments  were  offered. 
The  effect  of  Lewis'  trial  on  official  circles  in  Washington  was  thus 
chronicled  by  Dunn  in  a  dispatch  to  the  Daily  of  INIay  19: 

Intense  interest  was  manifested  everjAvhere,  upon  receipt  of  the  decision 
in  the  famous  Lewis  case.  Scarcely  a  senator  or  member  of  Congress  who 
was  informed  of  the  verdict  and  action  of  the  judge,  failed  to  express  grati- 
fication that  justice  had  been  done.  Senators  Clark  and  Warren,  of  Wyom- 
ing, spoke  in  the  highest  terms  of  Judge  Riner  of  that  state.  They  said 
there  was  no  better  judge  in  that  circuit.  This  gives  emphasis  to  the  court's 
decision.  Heretofore,  attempts  to  interest  congressmen  in  the  Lewis  case 
have  been  met  with  incredulity,  because  the  officials  responsible  for  his  prose- 
cution had,  with  great  cunning,  spread  reports  that  Lewis  was  under  in- 
dictment.   His  acquittal  has  caused  a  revulsion  of  feeling  in  his  favor. 

ENTER    WILLIAM    H.    TAFT. 

Lewis'  ability  to  gain  and  maintain  the  confidence  of  those  high 
in  administrative  circles  served  as  an  inspiration  to  his  personal 
representatives  in  Washington,  and  in  a  measure  paved  the  way 
for  the  interviews  they  were  able  to  gain  with  those  closely  in 
touch  with  affairs  at  the  White  House.  As  far  back  as  1905,  Lewis 
had  formed  the  personal  acquaintance  of  President  Taft,  then 
governor  of  the  Philippines.  In  the  September,  1905,  issue  of  the 
Woman's  Magazine  appears  editorial  reference  to  negotiations  with 
Mr.  Taft  regarding  the  preparation  by  him  of  a  special  article  in 
the  Magazine  describing  the  American  invasion  of  the  Orient.  The 
tribute  to  IMr.  Taft  and  his  personal  letter  to  Lewis  are  reproduced 
from  the  issue  named: 

Governor  Taft  is  a  busy  man.  He  is  also  a  big  broad-gauge  man.  No 
man  in  America  knows  more  than  he  about  our  Philippine  Island  posses- 
sions. A  lot  of  people  in  America  would  like  to  know  something  about 
them  and  the  millions  of  American  money  being  poured  into  them.  Gover- 
nor Taft  agreed  to  tell  the  American  people,  through  the  columns  of  the 


THE  DREYFUS  CASE  OF  AMERICA  697 

Woman's  Magazine,  what  they  want  to  know.  He  was  so  busy  arranging 
for  his  present  trip  to  the  islands  that  he  was  obliged  to  have  the  labor 
of  preparing  the  article  done  by  Hon.  Mr.  LeRoy,  who  was  his  associate 
in  the  Philippines.  The  governor  has  just  revised  the  article.  I  give  below 
his  letter  in  regard  to  it.    It  will  appear  in  an  early  issue: 

WAR  DEPARTMENT 

WASIIINGTOK 

"Mr.  E.  G.  Lewis,  The  Lewis  Publishing  Company,  St.  Louis,  Mo.  My 
Dear  Lewis:  I  return  herewith  the  article  of  Mr.  LeRoy,  which  I  have  run 
over  very  hastily,  and  which  I  think  states  the  problem  in  a  very  fair  and 
candid  manner.  I  believe  the  article  would  prove  of  much  interest  to  the 
public,  and  hope  that  you  will  publish  it.  As  the  work  was  done  by  Mr. 
LeRoy,  he  should  have  the  credit  of  it,  and  of  course,  under  the  circum- 
stances, I  should  not  desire  to  sign  the  article.  Mr.  LeRoy  has  written  a 
great  deal,  and  on  account  of  his  familiarity  with  Philippine  matters,  an 
article  from  him  would  carry  weight.    Very  sincerely  yours, 

"Wm.  H.  Taft." 

In  his  testimony  before  the  Ashbrook  Committee,  Lewis  relates 
the  circumstances  of  a  personal  call  upon  Mr.  Taft,  then  secretary 
of  war,  early  in  1908.  Lewis  stated  that  the  call  was  informal,  and 
that  in  the  interview  of  a  half  hour  no  effort  was  made  to  exact 
from  the  secretary  a  pledge  of  official  assistance  in  a  matter  wholly 
outside  of  his  Department.  "I  hoped,"  said  Lewis,  "provided  I 
could  show  him  we  were  not  being  treated  rightly,  that  he  wovdd 
lay  the  matter  before  Mr.  Cortelyou.  I  was  convinced  ^Ir.  Cortel- 
you  was  being  guided  entirely  by  information  obtained  from  news- 
papers in  St.  Louis,  and  from  our  enemies." 

Later,  on  February  8,  1908,  Lewis,  in  response  to  Secretary 
Taft's  request  that  a  specific  incident  of  alleged  discrimination  be 
pointed  out,  wrote  at  some  length,  outlining  the  impounding  by 
Postmaster  Wyman  of  upwards  of  three  hundred  thousand  copies 
of  the  Woman's  Farm  Journal.  This  action  of  the  postmaster,  as 
the  reader  will  remember,  was  based  upon  the  pretended  right  to 
limit,  arbitrarily,  the  number  of  sample  copies  to  some  number 
less  than  one  hundred  per  cent  of  the  subscribers'  list.  After  citing 
the  report  of  the  Fettis  Commission,  in  which  it  was  found  that  the 
company  at  no  time  had  even  reached  the  full  quota  of  sample  copy 
mailings  to  which  it  was  entitled  under  the  departmental  ruling 
then  existing,  Lewis  says:  "We  believe  the  foregoing  will  impress 
you  as  a  most  absurd  situation  for  the  Department,  and  that  ulti- 
mately its  lawlessness  and  unwarranted  discrimination  must  be  ex- 
posed." On  March  7,  Dunn,  who  had  kept  closely  in  touch  with 
the  situation,  reported  as  follows: 

Secretary  Taft  says  he  can  do  nothing,  because  every  time  he  mentions 
the  Lewis  matter,  he  meets  the  opposition  of  Cortelyou  and  Loeb,  both  of 
whom  are  dead  against  you.  They  tell  him  he  had  not  seen  the  record,  and 
cannot  know  the  awful  things  you  have  done.  Then  the  President  sides 
with  Cortelyou,  making  it  impossible  for  Taft  to  do  anything.  Taft  re- 
ferred to  the  manner  in  which  men  spoke  of  you  in  St.  Louis,  and  said  that 
your  neighbors  evidently  believed  in  you.  I  added  that  men  like  Walter  B. 
Stevens,  whom  he  knew,  could  not  understand  why  Cortelyou  and  the  Presi- 
dent could  continue  to  inflict  an  injustice  upon  Lewis  and  his  people.  Taft 
said  that,  if  he  was  in  a  position  to  do  so,  he  would  go  to  the  bottom  of  the 


698  THE  SIEGE  OF  UNIVERSITY  CITY 

whole  matter  and  see  that  justice  was  done.  I  took  that  to  mean  that  he 
will  make  that  one  of  his  jobs  about  one  year  from  now.  As  regards  Roose- 
velt, I  think  that  the  appearance  of  Maddens  book  containing  official  state- 
ments of  the  postoffice  transaction,  will  cause  him  to  sit  up  and  take  notice. 
He  may  throw  down  the  whole  bunch  that  has  been  behind  the  movement 
against  you.  Few  men  can  make  a  quicker  turn  than  T.  R.,  when  the  time 
comes  for  action. 

JUDGE  Foster's  joker. 

The  final  defeat  of  legislation  looking  to  judicial  review  of  the 
fraud  order  lies  at  the  door  of  Judge  Foster,  according  to  news 
dispatches  of  the  Woman's  National  Daily  of  May  25,  which  say: 

No  bill  providing  for  a  judicial  review  of  fraud  orders  will  be  passed 
at  this  session  of  Congress.  Nothing  short  of  a  miracle  could  now  secure 
enactment  of  such  legislation.  The  House  Judiciary  Committee  has  now 
held  its  last  meeting  of  the  session.  Foster,  of  Indiana,  chairman  of  the 
sub-committee  which  had  under  consideration  his  own  bill  and  that  intro- 
duced by  Judge  Crumpacker,  asked  for  unanimous  consent  to  call  up  a  bill 
agreed  upon  by  the  sub-committee.    Objection  was  made  and  the  "jig  is  up." 

Tlie  history  of  this  legislation  places  the  Administration  clearly 
in  the  light  of  defending  its  own  autocracy.  It  fought  the  Crum- 
packer bill  throughout.  Roosevelt  even  announced  his  intention  to 
veto  it,  if  necessary.  The  real  attitude  of  the  Department  was 
hostile  to  any  review  whatever  of  the  postmaster-general's  discre- 
tionary power.  It  was,  however,  willing  to.  yield  to  the  popular 
agitation  sufficiently  to  intrust  to  the  discretion  of  the  Federal 
courts  the  power  to  review  the  postmaster-general's  exercise  of  his 
discretion.  The  Department  well  knew  the  tendency  of  the  Federal 
courts  to  sustain  the  Administration.  Judge  Foster  became  the 
champion  of  this  legislative  joker.  It  got  lio  farther  than  the  sub- 
committee of  three,  of  which  he  was  chairman.  Its  only  effect  was 
to  forestall  a  second  favorable  report  on  the  Crumpacker  bill  until 
too  late  to  take  up  that  measure  before  Congress  should  adjourn. 
Before  the  next  session  of  Congress  the  popular  interest  in  the 
subject  had  largely  subsided.  Three  years  had  then  elapsed  since 
the  fraud  order  against  the  People's  Bank  was  promulgated.  Lewis 
had  been  tried  and  acquitted.  Little  ground  remained  for  further 
popular  agitation,  and  the  issue  of  the  judicial  review  of  fraud 
orders  was  deferred. 

ROOSEVELT  PERPLEXED  ABOUT  LEWIS. 

The  effect  of  Lewis'  acquittal  was  also  felt  in  the  highest  admin- 
istrative quarters.  Dunn  reports  on  May  20  that,  for  the  first  time 
in  a  year,  it  was  possible  for  him  to  go  direct  to  the  President  and 
talk  to  him  about  tlie  Lewis  case.  "Beyond  question,"  says  Dunn, 
"the  decision  of  the  court  has  been  a  splendid  tiling.  I  begin  to 
see  daylight  ahead."  Following  his  conversation  with  Roosevelt, 
Dunn  interviewed  both  Cortelyou  and  ISIeyer.  He  subsequently 
reported  two  separate  interviews  on  the  subject  Avith  the  President. 
As  to  Cortelyou,  he  says: 

Cortelyou  says  he  will  not  raise  the  slightest  objection  to  reopening  the 
fraud  order  case,  f)r  olhrrwise  clearing  up  tlic  matter.  He  said  Lewis  had 
a  great  idea,  and  that  if  he  wished  to  reopen  his  bank  he  should  have  every- 
thing ready  and  complete,  with  all  the  directors  named  and  elected,  before 


THE  DREYFUS  CASE  OF  AMERICA  699 

he  opens  his  doors  and  begins  to  take  in  money.  Cortelyou  did  not  mention 
Madden's  book,  which,  however,  came  up  yesterday  in  my  conversation  at 
the  White  House. 

As  to  Meyer,  Dunn  says: 

After  I  announced  a  desire  to  see  Meyer,  there  was  an  immediate  call 
for  Goodwin.  He  was  closeted  with  Meyer  half  an  hour  before  I  was  ad- 
mitted. I  think  Goodwin  is  making  his  final  stand.  Your  vindication  by 
the  executive  departments  will  put  Goodwin  in  very  bad,  and,  in  my  judg- 
ment, he  is  fighting  as  hard  as  he  can.  Hence  my  interview  with  Meyer  was 
less  satisfactory  than  with  either  the  President  or  Cortelyou.  Meyer  re- 
ferred to  your  pending  suits  against  Goodwin.  He  also  referred  to  the  in- 
dictments in  the  conspiracy  case,  and  claimed  that  a  case  almost  identical 
had  been  decided  in  Maine  in  favor  of  the  Government.  I  am  inclined  to 
think  that  your  aifairs  will  be  considered  in  the  Cabinet  tomorrow,  or  at 
least  by  Roosevelt,  Cortelyou  and  Meyer. 

Regarding  his  second  interview  with   Roosevelt,   Dunn  says: 

Meyer  had  submitted  a  memorandum,  prepared  by  Goodwin,  who  claims 
that  there  are  two  other  cases  against  you  upon  which  the  Government  has 
good  grounds.  Goodwin  recommends,  and  evidently  Meyer  agrees,  that  these 
indictments  ought  to  be  prosecuted.  This  looks  to  me  like  Goodwin's  last 
stand.  It  seems  to  be  the  main  obstacle  in  the  way  of  a  settlement.  The 
President  told  me  the  postmaster-general  would  carefully  consider  your  ap- 
plication for  the  removal  of  the  fraud  order  against  the  bank.  Cortelyou 
has  told  the  President  he  would  have  no  objection  to  such  action.  But 
Goodwin  will  endeavor  to  pick  flaws  and  in  some  way  make  the  postmaster- 
general  and  the  President  hostile. 

The  President  told  me  he  has  now  no  objection  to  reopening  the  case.  He 
says  he  is  perplexed  because  Meyer  and  Cortelyou  tell  him  you  are  a  bad 
man,  while  I  and  other  men  in  whom  he  has  confidence,  tell  him  you  are  a 
good  man.  He  seems  disposed  to  do  right  as  near  as  he  can,  but  as  long  as 
Meyer  relies  on  Goodwin,  you  will  get  the  worst  possible  deal.  Instead  of 
trying  to  do  justice,  Goodwin  is  determined  to  fight  as  long  as  he  can.  It 
must  be  that  your  success  will  put  him  down  and  out.  I  have  learned  that 
a  certain  St.  Louis  hanker  told  people  in  Washington  that  you  and  all  your 
enterprises  were  nothing  but  a  shell,  and  were  likely  to  go  to  pieces.  The 
men  with  whom  Secretary  Garfield  was  associated  in  St.  Louis  also  gave 
you  a  black  eye.  You  have  enemies  at  home,  who  are  doing  their  utmost  to 
injure  you. 

Finally,  on  June  6,  Dunn  reported  a  last  talk  with  the  President, 
as  follows: 

Roosevelt  declared  there  would  be  no  more  persecution  of  Lewis.  I  told 
him  you  had  fought  your  way  out  under  a  heavy  handicap,  with  the  whole 
weight  of  the  Postoffice  Department  upon  your  back.  I  said  you  could 
stand  it  to  fight  on.  without  asking  favors.  I  told  him  all  you  wanted  was 
that  the  persecution  of  the  Department  should  cease.  He  said  he  would 
not  allow  persecution  of  any  kind. 


CHAPTER  XXVIII. 

THE  DOUBLE  VINDICATION. 

Prosecution,  or  Persecution? — The  First  Indictment — Seven 
More  True  Bills — The  Theft  of  Madden's  Trunk — 
The  Defendant  on  the  Stand — The  Case  for  the  De- 
fense— The  Mistrial  and  Its  Effects — The  Second 
Trial  Opens — The   Acquittal — Judge   Riner's   Opinion. 

The  Hon.  Francis  Cnshman,  member  of  Congress,  now  deceased, 
was  once  the  victim  of  an  unjust  indictment  by  a  grand  jury.  He 
never  was  brought  to  trial.  The  case  was  dismissed.  Cushman  de- 
manded his  da}'  in  court.  In  insisting  upon  this  legal  right,  he  said: 
"After  I  have  been  causelessly  arrested  and  detained  for  twenty- 
three  days,  I  am  now  dismissed  with  a  blot  upon  my  name  and  a 
stain  upon  my  reputation.  I  can  now  go  and  rebuild  what  others 
have  torn  down.  I  can  now  commence  to  repair  what  has  cost  me 
the  labor  of  my  lifetime  to  build  up,  and  what  has  been  wantonly 
destroyed  in  a  single  hour."  The  Hon.  Frank  O.  Lowden,  member 
of  Congress,  speaking  on  the  subject  of  grand  jury  indictments 
April  2,  1910,  said,  among  other  things:  "An  indictment  of  an 
honest  man,  even  though  he  be  acquitted,  is  a  more  cruel  punish- 
ment than  the  indictment  and  conviction  of  the  perpetrator  of  the 
crime.  Every  indictment  and  every  prosecution  which  turns  out 
to  be  unwarranted  weakens  immeasurably  the  authority  of  the 
courts,  and  thus  strikes  at  the  fundamental  security  of  our  liberties." 

The  Federal  grand  jury  for  the  United  States  District  Court  of 
the  Eastern  Division  of  the  Eastern  Judicial  District  of  Missouri 
(to  quote  the  mouthful  of  terms  needful  to  define  the  matter  with 
legal  exactitude)  has  presented  no  fewer  than  twelve  "true  bills" 
against  Edward  Gardner  Lewis.  One  of  these  was  quashed.  Two 
were  set  aside  by  the  court  on  demurrers  interposed  by  Lewis' 
counsel.  Seven  were  dismissed  by  the  United  States  district  attor- 
ney, on  his  own  motion.  But  two  have  been  brought  to  trial.  The 
first  case  against  Lewis  to  come  to  an  issue  before  a  jury  of  his 
peers  resulted,  as  the  sequel  will  show,  in  his  acquittal.  The  second, 
after  a  mistrial,  is  now  (April,  1912)  still  pending.  No  jury  of 
twelve  good  men  and  true  has  ever  pronounced  in  his  ears  the 
hateful  and  shameful  verdict  of  "guilty."  Yet  Lewis  has,  in 
effect,  been  denied  the  benefit  of  that  trite  but  pregnant  maxim  of 
the  common  law  which  presumes  a  man  innocent  of  all  wrong- 
doing until  confronted  by  his  accusers  in  open  court,  afforded  a 
fair  trial,  with  the  aid  of  counsel  and  witnesses  for  his  defense; 
and  declared  guilty. 

700 


THE  DREYFUS  CASE  OF  AMERICA  701 

One  or  more  indictments  were  kept  hanging  over  Lewis'  head  for 
nearly  four  years,  from  December  1,  1905,  to  October  23,  1909. 
Then  came  an  interval  from  October  23,  1909,  to  July  12,  1911, 
before  another  "true  bill"  was  drawn.  Since  the  last  date  Lewis 
has  been,  and  still  is,  under  indictment.  If  the  maxim  that  a  man 
is  presumed  to  be  innocent  until  proved  guilty  applies  to  Lewis,  why 
have  the  officials  of  the  Postoffice  Department  during  both  the  above 
periods  pointed  to  these  indictments  in  attempted  vindication  of 
their  own  conduct.^  Were  they  brought  in  good  faith?  Were  they 
based  upon  probable  grounds  }  Do  they  charge  the  violation  of  any 
law?  Or  were  they,  or  any  of  them,  brought  in  bad  faith?  Were 
they,  or  any  of  them,  unwarranted  subterfuges?  Do  they  falsely 
charge  the  defendant  with  a  violation  of  law  in  committing  an  act 
which  is  nowhere,  by  statute,  made  a  legal  offense?  In  a  word,  do 
these  twelve  indictments  bespeak  prosecution  or  persecution?  Such 
is  the  inquiry  with  which  we  are  concerned  in  the  present  chapter. 

PROSECUTION,    OR    PERSECUTION? 

The  determination  to  punish  Lewis  by  criminal  proceedings  on  a 
charge  of  attempt  to  defraud  in  the  promotion  of  the  bank,  seems 
at  first  to  have  been  confined  to  the  postoffice  inspectors  at  St.  Louis. 
By  one  of  those  curious  coincidences  that  provoke  curiosity  at  every 
stage  of  the  Siege,  a  news  dispatch  was  wired  from  St.  Louis  March 
15,  1905,  the  day  following  the  inspectors'  first  visit  to  University 
City,  stating  that  the  Federal  probe  was  about  to  be  inserted  into 
a  "get-rich-quick"  concern,  and  that  grand  jury  proceedings  would 
follow.  Nor  did  the  inspectors  thereafter  at  any  stage  of  their 
investigation  lose  sight  of  this  purpose.  The  memoranda  taken 
from  Lewis'  subscription  books  and  from  the  books  of  the  bank 
were  plainly  designed  to  enable  the  inspectors  to  refresh  their 
memories  as  witnesses  in  the  event  of  criminal  prosecution.  No 
effort  was  made  to  reduce  to  the  form  of  affidavits  any  of  his 
statements,  except  such  as  were  construed  by  the  inspectors  as  ad- 
missions of  guilt.  These  affidavits  were  obtained,  as  Lewis  sup- 
posed, in  the  routine  of  postoffice  business.  They  afterwards  were 
admitted  in  evidence  against  him  when  he  was  placed  on  trial  for 
his  liberty. 

The  St.  Louis  Post-Dispatch,  in  its  great  extra  and  throughout 
the  campaign  that  followed,  averred  that  criminal  charges  against 
Lewis  were  under  consideration  by  the  United  States  attorney. 
The  same  newspaper,  from  time  to  time,  circulated  rumors  that  the 
Federal  grand  jury  would  be  asked  to  inquire  into  the  affairs  of  the 
bank.  A  number  of  interviews  were  published  with  the  then  United 
States  attorney,  David  P.  Dyer.  The  purport  of  these  statements 
was  to  suggest  that  a  criminal  investigation  was  pending  and  that 
indictments  would  eventually  be  returned.  The  Washington  cor- 
respondent of  the  St.  Louis  Republic,  having  no  motive  other  than 
to  ascertain  the  truth,  inquired  at  the  office  of  the  attorney-general 
in  Washington  if  criminal  proceedings  against  Lewis  were  likely 


702  THE  SIEGE  OF  UNIVERSITY  CITY 

to  follow  the  issuance  of  the  fraud  order.  Assistant  Attorney- 
General  Hoyt,  as  spokesman  for  the  Department  of  Justice,  replied 
that  such  action  was  most  unlikely.  He  said  such  use  of  the  mails 
as  might  constitute  grounds  for  the  promulgation  of  a  fraud  order 
would  not  necessarily  imply  the  violation  of  a  Federal  statute.  It 
was  usual  in  such  cases,  he  remarked,  to  allow  the  matter  to  drop 
after  the  fraud  order  was  issued. 

THE   FIRST  INDICTMENTS. 

The  agitation  stirred  up  by  Lewis  in  the  summer  of  1905  for  a 
congressional  investigation  of  the  fraud  order,  evidently  inspired 
hope  in  the  minds  of  the  inspectors  at  St.  Louis  that  renewed  ac- 
tivity by  them  would  meet  the  approval  of  their  superiors  at 
Washington.  The  charges  of  misconduct  in  the  mailings  of  the 
Woman's  Magazine  and  Farm  Journal,  made  by  Parshall  in  August, 
were  eagerh'  seized  upon  by  Fulton  and  his  associates.  The  reader 
will  recall  that  they  were  made  the  subject  of  a  second  investiga- 
tion in  October  and  that  this  led  to  the  first  indictments  against 
Lewis.  These  were  brought  in,  opportunely  (or  by  a  coincidence, 
which  turned  out  most  happily  for  the  postmaster-general)  on 
December  1,  just  as  Congress  was  about  to  convene.  Two  indict- 
ments were  drawn.  One  charged  Lewis  and  his  associates,  Cabot 
and  Miller,  with  conspiracy  to  defraud  the  Government  by  exces- 
sive mailings  of  the  Woman's  Magazine  and  Farm  Journal.  The 
other  charged  Lewis  with  having  used  the  mails,  in  the  promotion 
of  the  People's  Bank,  in  aid  of  a  scheme  to  defraud.  Both  bills 
were  procured  by  the  United  States  attorney  at  the  instance  of  the 
inspectors  at  St.  Louis.     Both  bore  the  signature  of  David  P.  Dyer. 

Dyer,  Wj^man  and  Fulton,  respectively  United  States  attorney, 
postmaster  and  inspector-in-charge  at  St.  Louis,  were  the  St.  Louis 
Triumvirate,  whose  activities  are  so  familiar  to  the  reader.  Fulton 
sought  vainly,  throughout  his  testimony  before  the  Ashbrook  Com- 
mittee, to  shield  himself  behind  the  skirts  of  his  two  fellow-officials. 
He  laid  great  stress  upon  the  assertion  that  no  step  was  taken 
except  after  full  conference  among  the  three.  Yet  Beck,  the 
detective,  reports  that  Wyman  admitted  being  in  effect  the  tool  of 
Fulton.  This  is  corroborated  by  the  word  of  Wyman's  brother, 
late  surgeon-general  of  the  United  States,  and  by  common  rumor 
in  St.  Louis.  Then,  oddly  enough,  after  seven  years,  the  St.  Louis 
Republic  of  April  18,  1912  (tlie  very  day  that  these  words  are 
being  written)  contains  the  admission  of  Dyer  that  his  official  act 
in  procuring  and  signing  indictments  against  Lewis  and  his  asso- 
ciates was  solely  upon  Fulton's  advice  and  recommendation.  That 
the  significance  of  this  admission  may  be  fully  grasped.  Dyer's 
statement  is  here  quoted.  It  is  headed:  "Dyer's  Deposition  a 
Point  for  Lewis:  Federal  Judge  Admits  Ordering  Farm  Journal 
Seized,  Without  Knowing  Facts:  Postal  Inspectors  Asked  It: 
Witness  Says  He  Relied  on  Government  Agents  to  Supply  Neces- 
sary Evidence."     The  Republic  says: 


THE  DREYFUS  CASE  OF  AMERICA  703 

Judge  David  P.  Djer,  of  the  United  States  District  Court  in  St.  Louis, 
yesterday,  in  depositions  being  taken  in  the  congressional  investigation  of 
charges  made  by  E.  G.  Lewis,  that  the  Postoffice  Department  exceeded  its 
power  in  bringing  charges  against  the  Lewis  companies,  said  he  had  never 
known  Lewis  and  had  no  facts  of  his  own  personal  knowledge  of  the  affairs 
of  the  company.  Edwin  C.  Madden,  attorney  for  Lewis  at  the  taking  of 
depositions,  said  the  admission  of  Judge  Dyer  would  be  one  of  the  strongest 
points  in  Lewis'  case.  "It  shows  conclusively,"  he  said,  "that  the  case  was 
made  wholly  by  the  postoffice  inspectors."  Judge  Dyer  also  said  he  did  not 
have  knowledge  of  the  Postoffice  Department  rule  or  regulation  on  which 
over  three  hundred  thousand  copies  of  the  "Woman's  Farm  Journal  were 
seized  in  the  St.  Louis  postoffice  by  his  order.  He  said  ftie  inspectors  had 
represented  to  him  that  they  constituted  evidence  and  that  the  case  would 
not  be  complete  without  them. 

United  States  Attorney  Houts,  for  the  Government,  in  referring  to  the 
charges  brought  by  counsel  for  Lewis  that  postoffice  officials  and  others 
had  conspired  for  Lewis'  ruin,  said:  "I  hesitate  to  refer  to  the  charges, 
but  that  the  records  may  be  complete,  I  will  ask  you  if  you  know  of  any 
such  conspiracy.  Do  you,  or  did  you,  think  that  the  postoffice  inspectors 
had  any  ulterior  motive  in  the  prosecution?"  "If  I  had  thought  so,  they 
would  have  gone  out  of  my  office  in  quick  order,"  Judge  Dyer  replied.  "I 
do  not  pretend  to  be  conversant  with  all  of  the  postal  orders,  and  if  you 
will  excuse  me  for  saying  so,  some  of  them  would  drive  a  man  to  drink. 
They  arc  too  wide  and  deep  for  me." 

Let  us  contrast  tliis  admission  with  the  testimony  of  Fulton 
before  the  Ashbrook  Committee.     Fulton  says: 

A  conference  was  held  between  I\Ir.  Wyman,  postmaster  at  St.  Louis, 
the  inspector-in-charge,  myself,  and  the  United  States  attorney.  Col.  D.  P. 
Dyer.  This  was  after  Lewis'  September  mailings  and  before  his  October 
mailings.  It  was  about  the  middle  of  September,  1905.  It  was  decided 
among  us  that  what  we  deemed  the  extra  copies  of  the  October  mailings  of 
the  Woman's  Farm  Journal  should  be  held  up  and  detained  at  the  St.  Louis 
postoffice.  Our  findings  were  that  about  three  hundred  thousand  copies 
were  illegally  mailed.  We  decided  to  seize  and  detain  these  as  evidence  to 
be  used  later  on  the  indictment  against  Mr.  Lewis.  I  do  not  know  who  gave 
the  order.  I  presume  the  postmaster  did.  It  was  decided  by  all  three.  I 
take  my  share  of  the  responsibility.  I  thought  there  was  evidence  of  fraud, 
and  recommended  the  seizure.  The  October  issue  of  the  Woman's  Farm 
Journal  began  to  come  in  on  October  5,  and  kept  coming  in  carloads  up  until 
October  10.  The  bags  were  opened  and  all  copies  with  the  kind  of  wrapper 
that  showed  they  were  illegitimate,  according  to  our  information,  were  held 
and  stored  down  in  the  cellar.  In  all,  there  were  sixty-five  thousand  pounds 
of  mail  thus  seized  and  stored.  They  are  still  in  the  St.  Louis  postoffice. 
By  an  oversight,  the  cashier  was  not  informed,  and  the  postal  charges  of 
seven  hundred  dollars  were  deducted  as  usual.  Mr.  Lewis  was  not  in- 
formed for  some  time  that  the  copies  had  been  seized.  We  wished  to  have 
definite  proof  that  the  mailing  was  really  fraudulent.  For  this,  further 
investigation  was  necessary.  So  "Mr.  Lewis  did  not  know  that  the  papers 
were  held  back,  to  the  extent  of  three  hundred  thousand  copies,  for  nearly  a 
month.  The  result  was  that  Mr.  Lewis  and  other  officers  of  his  company 
were  indicted  upon  the  information  secured  by  the  inspectors  for  a  con- 
spiracy to  defraud  the  Government.  The  indictments  were  never  brought 
to  trial.  If  I  had  known  that  such  would  be  the  case,  I  would  not  have 
deemed  it  proper  to  detain  these  copies.  They  were  detained  as  evidence, 
but  were  never  made  use  of  for  that  purpose.  The  effect  was  that  Mr.  Lewis 
was  wronged,  though  I  thought  then,  and  still  think,  that  he  was  guilty  of 
fraudulent  mailing  and  that  he  ought  to  have  been  brought  to  trial  on 
those  charges. 

The  United  States  attorney  drew  the  indictments.  I  assisted  hira  when- 
ever he  called  on  me  to  do  so.     I  was  active  in  carrying  out  my  official 


704  THE  SIEGE  OF  UNIVERSITY  CITY 

duties,  but  I  challenge  it  as  unfair  to  make  it  appear  that  I  was  harassing 
a  citizen  while  only  ostensibly  performing  my  duty.  The  relation  between 
myself  and  Postmaster  Wyman,  when  I  was  in  charge,  was  one  of  hearty 
co-operation.  I  did  not  assume  any  dictatorial  attitude  toward  him,  nor 
direct  any  official  actions.  He  sought  my  advice,  and  I  his.  It  was  mutual. 
Any  statement  from  which  it  might  be  deduced  that  I  was  acting  indi- 
vidually, cannot  be  so  taken.  Such  deductions  are  erroneous.  We  were  all 
acting  collectively.  The  indictments  were  the  combined  actions  of  the  inves- 
tigators. The  others  were  responsible  equally  with  myself.  The  papers 
were  detained  as  the  result  of  consultation  between  Mr.  Dyer,  myself  and 
Postmaster  Wyman.  There  is  a  damage  suit  in  St.  Louis  county  against 
Mr.  Wyman,  for  alleged  imlawful  detention,  and  any  information  which 
Mr.  Lewis  might  get  from  me  will  be  used. 

Mr.  McCoy:  You  had  better  answer  the  questions.  Let  Mr.  Wyman  take 
care  of  himself. 

Mr.  Fulton:  Yes,  sir,  I  understand,  and  I  am  able  to  take  care  of  my- 
self. 

Mr.  McCoy:    You  haven't  so  far. 

Mr.  Fulton:    That  is  a  matter  of  opinion. 

FULTON   RESPONSIBLE. 

Fulton  plays  the  part  of  Caesar,  Wyman  that  of  Lepidus,  and 
Dyer  that  of  Anthony,  in  this  modern  version  of  the  old  Roman 
story.  For  all  the  evidence  indicates  that  Fulton  was  the  brains  of 
the  Triumvirate,  and  that  he  alone  enjoyed  the  complete  confidence 
of  the  powers  at  Washington.  The  effect  of  Dyer's  admission, 
notwithstanding  Fulton's  self-serving  declaration,  is  to  corroborate 
the  view  that  the  responsibility  for  the  first  indictments  centres  upon 
Fulton.  Madden,  before  the  Ashbrook  Committee,  commented  on 
this  official  act  as  follows: 

The  indictment  for  conspiracy  to  defraud  the  Government  out  of  post- 
age misrepresented  the  law.  It  was  without  probable  cause.  It  was  fraudu- 
lent. It  was  a  monstrous  wrong,  inflicted  upon  innocent  persons  who  were 
exercising  their  lawful  privilege  in  the  use  of  the  mails,  just  as  hundreds  of 
thousands  of  other  persons  were  then  and  are  now  doing  every  day  in  the 
year.  It  was  as  groundless  as  it  would  be  indict  the  same  persons  for  walk- 
ing in  the  sunlight  or  breathing  the  open  air.  There  was  an  office  ruling 
of  the  third  assistant,  to  the  effect  that  any  publication  of  which  more  sam- 
ple copies  were  regularly  mailed  than  subscribers'  copies,  would  not  be  ad- 
mitted to  the  second  class.  In  such  cases,  it  was  held  to  be  primarily  de- 
signed for  free  circulation,  and  so  prohibited  by  law.  That  rule  served  on 
the  question  of  admission,  but  something  must  be  done  with  those  who 
violated  the  limit  after  their  admission.  It  was  the  practice  of  the  De- 
partment to  give  the  publisher  a  hearing  and  afford  him  an  opportunity  to 
reduce  his  circulation  to  the  limit  of  one  hundred  per  cent  of  sample  copies. 
He  was  warned  that  excess  mailings  of  sample  copies  would  cause  his  publi- 
cation to  be  ruled  out.  But  he  was  first  given  an  opportunity  to  comply. 
The  statute  does  not  contain  any  such  provision.  The  Department  has  a 
remedy  if  the  publisher  violates  the  rule,  namely,  to  exclude  him  from  the 
second  class.  But  the  publisher  was  first  given  full  opportunity  to  amend 
his  practice  and  come  within  ihe  rule.  Now,  it  was  this  office  ruling  of  the 
third  assistant,  this  administrative  device,  misconstrued  and  misapplied, 
that  was  written  into  these  indictments  as  "the  form  of  the  statute  in  such 
case  made  and  provided." 

The  reader  will  remember  that  when  the  inspectors  came  to 
prepare  this  case  for  trial  they  themselves  discovered  that  the 
"law  was  silent  on  that  direct  proposition."  To  furnish  "what  the 
attorneys  will  need  as  evidence"  iSIadden  was  required  by  Cortelyou 


THE  DREYFUS  CASE  OF  AMERICA  706 

to  make  a  certain  ruling,  which  was  doctored  by  Goodwin,  at  Cor- 
telyou's  express  command,  before  it  was  forwarded  to  the  post- 
master at  St.  Louis.  The  inspectors,  in  other  words,  discovered 
shortly  after  this  indictment  had  been  drawn  that  there  had  been 
no  violation  of  law,  and  at  most  only  an  infraction  of  a  postoffice 
regulation.  The  lawful  penalty  was  not  a  criminal  prosecution,  but 
a  citation  to  show  cause  why  the  second-class  privilege  of  the  pub- 
lication should  not  be  withdrawn.  What  did  they  then  do.f*  Did 
they  acknowledge  that  a  great  mistake  had  been  made.^  Did  they 
give  an  interview  to  the  press  in  an  eil'ort  to  offset  the  injury  done 
to  those  who  had  been  indicted.'^  Did  they  cause  the  indictments 
to  be  quashed."*  Did  they  seek  in  any  way  to  make  atonement  or 
reparation.''  No.  They  asked  the  Department  for  a  special  ruling 
that  could  be  introduced  by  the  postmaster  to  supply  the  evidence 
the  United  States  attorney  would  need.  Then  the  inspectors  once 
more  presented  themselves  before  the  United  States  attorney  and 
the  grand  jury,  on  May  4,  1906,  and  caused  a  new  indictment, 
alleging  the  same  offense,  to  be  returned.  Was  this  case  then 
brought  to  trial  forthwith,  so  that  the  uncertainty  as  to  the  rights 
of  both  parties  in  the  premises  might  be  dispelled.^  No.  Every 
technicality  of  the  law's  delay  was  invoked  to  postpone  the  issue. 
The  defendants  never  were  able  to  bring  this  indictment  into  court. 
They  were  compelled,  in  the  end,  to  ask  that  it  be  set  aside.  The 
defendants'  demurrer  to  this  effect  was  filed  on  May  13,  1907, 
eighteen  months  after  the  first  indictment,  and  twelve  months  after 
the  second  was  brought  in.  It  was  promptly  sustained  by  the  court. 
The  indictment  was  dismissed.  The  court,  however,  avoided  the 
main  issue.  An  opinion  in  this  case  was  filed  on  May  17,  1905. 
It  said: 

It  will  be  noticed  that  there  is  no  limitation  in  the  act  of  March  3,  1885, 
as  to  the  number  of  copies  of  publications  which  may  be  sent  through  the 
mails  at  second-class  rates.  Neither  does  the  act  limit  copies  to  subscribers 
solely,  but  grants  the  privilege  to  all  publications  of  the  second  class,  in- 
cluding sample  copies.  Whether  there  is  any  authority  of  law  authorizing 
the  postmaster-general  to  limit  the  number  of  copies  of  a  publication  which 
may  be  sent  through  the  mails  at  this  low  rate  to  bona  fide  subscribers,  or 
whether  he  is  authorized  to  determine  the  number  of  sample  copies  which 
may  thus  be  mailed,  has  been  ably  argued  by  counsel,  but  the  view  taken 
by  the  court  makes  it  unnecessary  to  determine  that  question,  as  the  de- 
murrer to  the  indictments  must  be  sustained  upon  other  grounds. 

The  court  proceeds  to  say  that  in  all  criminal  cases  the  crime  for 
which  a  defendant  stands  charged  must  be  clearly  defined  by  the 
indictment.  "The  present  indictment  was,"  it  said,  "fatally  de- 
fective in  that  respect,  as  it  failed  to  set  forth  the  acts  of  which 
the  crime  was  alleged  to  be  made  up  with  reasonable  particularity 
of  time,  place  and  circumstance.  Whether  these  defendants  havv. 
conspired  to  send  a  greater  number  of  copies  than  permitted  by 
law,  for  the  purpose  of  defrauding  the  Government,  cannot  be 
determined  from  any  of  the  facts  set  forth  in  the  indictment.  The 
demurrer  must  be  sustained." 


706  THE  SIEGE  OF  UNIVERSITY  CITY 

The  charge  that  the  bank  was  a  scheme  to  defraud  was  now  the 
only  indictment  hanging  over  Lewis'  liead.  But,  six  months  later, 
July  7,  1907,  a  fresh  batch  of  seven  indictments  was  handed  down 
by  the  Federal  grand  jury.  Two  of  these  charged  Lewis  and 
Francis  V.  Putnam  with  using  the  mails  with  intent  to  defraud,  in 
the  exchange  of  the  securities  of  the  bank  for  the  preferred  stock 
of  the  Lewis  Publishing  Company.  A  third  revived  the  charge  of 
conspiracy  to  defraud  the  Government  of  postage.  This  ran  against 
Lewis,  Cabot  and  Miller.  The  remaining  four  charged  Lewis  with 
scheming  to  defraud  in  the  promotion  of  the  People's  Bank.  The 
circumstances  under  which  these  indictments  were  brought  in  were 
thus  described  in  the  St.  Louis  Star  of  July  6,   1907: 

The  Federal  grand  jury  sworn  in  last  Wednesday  made  a  record  Satur- 
day for  expeditious  work,  which  il  is  believed  has  never  been  excelled.  After 
bting  sworn,  the  jury  took  a  recess  until  9:30  a.  m.  Saturday.  At  12:45 
p.  m.  it  reported  to  Judge  Dyer,  turning  in  nine  true  bills  of  indictment, 
and   was   discharged. 

SEVEN   MORE    "tRUE    BILLS." 

Seven  of  the  indictments  thus  deliberated  upon  and  affirmed,  in 
three  hours'  time,  were  those  against  Lewis  and  his  associates.  The 
same  issue  of  the  St.  Louis  Star  chronicles  the  filing  of  four  suits 
in  the  State  circuit  court  at  Clayton,  on  the  same  day  that  these 
indictments  were  brought  in,  by  the  Lewis  Publishing  Company 
against  Wyman  and  Fulton  for  damages  aggregating  one  million 
dollars.     The  Star  remarks: 

Papers  were  served  on  Postmaster  Wyman  Friday  night  by  a  deputy 
sheriff,  while  he  sat  with  his  daughter  and  a  friend  at  the  Suburban  Theatre 
during  the  performance  of  The  Lady  of  Lyons.  Part  of  the  Suburban 
Theatre  is  in  the  city  and  part  just  outside  the  county  line.  Postmaster 
Wyman's  feet  were  just  over  the  city  line  when  the  deputy  sherifif  grasped 
the  opportunity  to  notify  him  of  the  damage  suits. 

As  we  know,  the  "friend"  who  accompanied  the  postmaster  on 
this  occasion  was  the  detective,  Beck.  The  opportune  appearance 
of  the  deputy  sheriff  was  due  to  the  telephone  message  from  Beck 
to  Lewis,  followed  by  a  wild  automobile  ride  by  Lewis  to  Clayton 
and  thence,  accompanied  by  the  deputy  sheriff,  to  the  Suburban 
Theatre.  The  detective  in  his  report  on  this  date,  above  quoted, 
states  that  Wyman  mentioned  to  him  in  confidence  the  fact  that 
these  seven  indictments  had  been  drawn.  This  circumstance  strong- 
ly corroborates  the  reports  of  Beck.  It  thus  lends  color  of  proba- 
bility to  those  parts  of  his  reports  touching  the  alleged  threats  of 
the  St.  Louis  Triumvirate  to  put  Lewis  out  of  business,  by  fair 
means  or  foul. 

None  of  these  indictments  was  ever  brought  to  trial.  All  were 
dismissed  more  than  two  years  afterwards  on  motion  of  the  United 
States  attorney,  and  the  defendants  discharged.  Meantime,  the 
original  indictment  of  December  1,  1905,  charging  that  the  bank 
was  a  fraudulent  scheme,  was  twice  brought  to  trial.  At  the  second 
trial  Lewis  was  acquitted  under  circumstances  which  we  are  next 
to  consider. 


THE  DREYFUS  CASE  OF  AMERICA  707 

What  were  the  motives  of  the  inspectors  at  St.  Louis  and  their 
superiors  at  Washington  in  causing  all  these  indictments  to  be 
secured?  Why  was  not  the  defendant  accorded  his  day  in  court? 
Did  the  jDendency  of  these  indictments  in  fact  serve  any  other 
official  purpose  than  to  promote  the  ends  of  justice?  The  reader 
will  recall  the  agitation  in  Congress  for  an  inquiry  into  the  matter 
of  the  fraud  order  against  the  People's  Bank.  The  Crumpacker 
resolution,  requesting  the  postmaster-general  to  submit  all  the 
documents  in  the  case  to  Congress,  was  passed  by  the  House  of 
Representatives.  The  pending  indictments  proved  an  effective  bar. 
Cortelyou  rejoined  that  the  papers  were  in  the  possession  of  the 
district  attorney  at  St.  Louis,  who  needed  them.  He  pleaded  that 
they  must  be  kept  conlidential,  on  grounds  of  public  policy. 

Meantime,  the  postmaster-general  himself,  and  his  associates, 
notably  Assistant  Attorney-General  Goodwin,  were  responding  to 
the  countless  inquiries  of  congressmen  and  others  all  over  America. 
Their  answers  took  the  shape  of  form-letters.  Each  drew  par- 
ticular attention  to  the  fact  that  Lewis  was  under  indictment.* 
Later,  the  postmaster-general's  memorandum  to  the  press,  under 
date  of  March  4,  1907,  touching  the  withdrawal  of  the  second-class 
entry  from  Lewis'  publications,  cited  the  pending  indictments  as 
presumptive  evidence  that  Lewis  was  a  criminal.  The  official  letters 
of  the  Department  and  the  postmaster-general's  memorandum  were 
widely  quoted  by  the  press.  The  fact  that  an  indictment  had  been 
lodged  against  Lewis,  thus  noised  abroad,  did  incalculable  injury 
both  to  his  business  and  his  personal  reputation.  The  indictments, 
in  short,  served  to  discredit  Lewis  and  to  thus  forestall  his  efforts 
to  secure  a  congressional  investigation,  by  which  he  hoped  to  undo 
the  work  of  the  Triumvirate. 

THE   FIRST   TRIAL  OPENS. 

The  summer  of  1907,  while  Lewis'  publications  were  excluded 
from  the  mails,  notable  for  its  plots  and  counterplots,  had  passed 
before  the  efforts  of  his  counsel  to  bring  any  of  these  indictments 
before  a  jury  bore  fruit.  The  Government  still  refused  to  go  into 
court  with  its  charges  of  conspiracy  in  the  mailing  of  the  two 
periodicals.  The  bank  case,  however,  was  docketed  at  the  August, 
1907,  term.      It  was  not  reached  on  the   August  docket,  but  was 

*The  following  fac-simile  is  taken  from  a  printed  letter  sent  out  from  the  Post- 
office  Department  of  Washington  in  response  to  inquiries  touching  the  People's  Bank. 
Observe  that  the  line  relating  to  the  indictment  of  L,e\vis  was  specially  inserted  in 
each   letter  by  typewriter: 

all   inquiries  in  regard  to  stock  held  and  moneys  deposited  should  66 
addressed.     Such  inquiries  may  be  directed  to  "Frederick  Essen,   Esq., 
Reoeiver,   People's  United  Slates  Bank,    St.   Louis,   Uo.' 

E,  Ct  Lewis  haa  recently  been  Indicted   for  operating  a  scheme  to  defraud. 
Very  respectfully. 


L/f  L/ ^H3-tr-eXtA-^-iA/s^ 


Aisistant  Attorney  General 

fur  the  Past  Office  DtptrtmeM. 


708  THE  SIEGE  OF  UNIVERSITY  CITY 

set  over  to  the  November  term,  when  it  was  eventually  brought 
to  trial. 

The  reader  will  recall  that  Lewis'  interview  with  Cortelyou  took 
place  in  August,  1907,  at  the  Manhattan  Hotel;  that  the  October 
issue  of  the  Woman's  ^Magazine  was  printed  and  destroyed,  and 
that  the  aiaplication  for  re-entry  was  for  months  under  investiga- 
tion by  the  postmaster  at  St.  Louis.  Such  was  the  condition  when, 
on  October  30,  1907,  the  St.  Louis  papers  noted  the  fact  that 
Lewis'  trial  on  a  criminal  charge  was  set  for  the  following  Tues- 
day morning.  Lewis'  line-a-day  book  contains  a  notation  on  No- 
vember 4,  as  follows:  "General  Madden  arrives.  Preliminary  bout 
on  indictments."  The  presence  of  Madden  was  due  in  part  to  the 
belief  that  it  might  be  necessary  to  call  him  as  witness  for  the 
defense,  and  in  part  to  his  desire  to  attend  the  trial  for  the  purpose 
of  making  it  the  subject  of  a  chapter  in  his  forthcoming  book.  The 
Post-Dispatch,  on  this  date,  remarks  that  Judge  Garland  of  South 
Dakota  will  preside  at  the  trial,  since  Judge  Dyer  is  disqualified 
by  his  previous  connection  with  the  case  as  United  States  district 
attorney.  The  trial  was  formally  opened  on  November  5.  The 
St.  Louis  Times  of  that  date  remarks: 

E.  G.  Lewis,  head  of  the  Lewis  Publishing  Company  and  Mayor  of  Uni- 
versity City,  with  his  boyish  face  in  marked  contrast  to  those  of  judge  and 
counsel,  appeared  in  the  United  States  district  court  Tuesday  morning. 
Through  his  attorneys  he  then  opened  the  fight  against  indictments,  which 
charge  the  use  of  the  mails  to  defraud  in  connection  with  the  defunct 
People's  United  States  Bank.  The  jury  was  dismissed  and  the  question 
was  argued  whether  the  trial  should  proceed  on  the  first  indictment,  re- 
turned December  1,  1905,  or  the  four  bills  afterwards  brought  on  July  6, 
1907.  Judge  Garland  ruled  that  the  first  indictment  must  be  dismissed,  if 
not  tried  during  the  present  term  of  court.  It  was  then  announced  that 
the  Government  would  go  to  trial  first  on  the  four  later  indictments. 

The  chamber  in  which  this  trial  was  conducted  is  notable  as  the 
scene  of  two  subsequent  legal  battles  for  Lewis'  liberty.  These 
were  the  second  trial  in  the  bank  case  in  May  next  following,  and 
the  now  recent  trial  in  March  and  April,  1912,  on  a  subsequent 
indictment,  again  charging  use  of  the  mails  with  intent  to  defraud. 
These  three  battles  mark  as  many  separate  great  crises  in  the  Siege 
of  University  City.  For  the  members  of  the  American  Woman's 
League  especially,  this  chamber  is  an  historic  spot.  At  the  counsel 
table  for  the  defense  at  this  very  trial,  in  November,  1907,  the 
League  itself  was  conceived  and  born.  The  room  of  the  United 
States  district  court  occupies  the  southeast  corner  upon  the  third 
floor  of  the  Federal  building  at  St.  Louis,  the  ground  floor  of 
which  is  occupied  by  the  St.  Louis  postoffice.  The  chamber  is 
spacious  and  lofty.  Upon  the  west  end,  the  judge's  rostrum  rises 
at  an  elevation  breast  high  of  counsel  as  they  stand  before  the  bar 
of  the  court.  The  ancient  bench,  symbolic  of  the  judiciary,  is 
represented  by  an  enormous  arm  chair,  impressing  the  beholder 
with  somewhat  of  the  awe  and  dignity  of  a  throne.  This  seat  of 
power  is  flanked  upon  the  right  and  left  by  two  similar  arm  chairs 
for  the  convenience  of  one  or  more  associate  judges,  sitting  jointly. 


THE  DREYFUS  CASE  OF  AMERICA  709 

To  the  judge's  right,  upon  the  rostrum,  almost  at  his  elbow,  is 
the  witness  stand,  a  roomy  enclosure  containing  an  arm  chair,  and 
reached  by  three  or  four  steps.  Behind  and  below  the  witness,  in 
the  corner  occupying  the  angle  between  the  judge's  rostrum  and 
the  jury  box,  is  the  table  assigned  to  the  press.  The  jury  box  itself, 
equipped  with  twelve  comfortable  swivel  chairs,  which  turn  freely 
in  every  direction,  confronts  the  court  and  the  witness  at  their  right. 
It  stands  against  the  south  wall  of  the  chamber.  Directly  in  front 
of  the  jury  and  parallel  to  the  jury  box  is  the  counsel  table  for 
the  defense.  Immediately  below  and  near  the  bench  is  the  counsel 
table  for  the  prosecution.  Here  sits  the  United  States  district 
attorney,  the  prosecuting  officer,  with  his  assistants.  Here,  during 
each  of  Lewis'  trials,  have  assembled  the  postoffice  inspectors  and 
other  Federal  officials  and  special  counsel  employed  in  collecting 
and  presenting  the  evidence  against  him.  Doubtless,  this  grouping 
may  be  accidental  rather  than  intended,  but  the  close  observer  can- 
not repress  the  sense  that  it  is  significant.  It  seems  suggestive  of 
a  community  of  sentiment  in  criminal  prosecutions  between  the 
court  and  the  prosecuting  attorney,  and  other  Federal  officials, 
as  against  the  jury  and  the  citizen  who  stands  upon  his  defense. 

A  hush  of  solemnity  pervades  the  place.  The  deceased  worthies 
who,  in  days  gone  by,  occupied  this  tribunal,  look  down  from  a 
series  of  panels  on  the  surrounding  walls.  A  medley  of  street 
noises  from  without  beats  upon  the  observer's  ears  with  a  muffled 
roar.  So  poor  are  the  acoustic  properties  of  the  room  that  all 
present  lean  forward  in  an  attitude  of  strained  expectancy,  as  if 
intent  that  no  point  of  evidence,  motion  of  counsel  or  ruling  of 
the  courts,  shall  escape.  What  takes  place  can  ordinarily  be  heard 
no  more  than  a  few  feet  beyond  the  counsel  tables  and  the  jury 
box  itself.  The  great  expanse  of  floor  space  and  the  lofty,  vaulted 
ceiling,  combine  with  all  the  accessories  of  the  bench  and  bar,  to 
impress  the  beholder  with  a  sense  of  the  dignity  of  the  Federal 
bench,  and  with  awe  of  the  sovereign  power  of  the  Nation  which 
it  represents  and  wields.  The  appointments  of  the  stage,  in  brief, 
are  well  worthy  of  the  tragedies  in  real  life  that  are  continuously 
being  enacted  upon  it.  Such  is  the  scene  that  lives  in  Lewis*  mem- 
ory as  his  thoughts  turn  back  to  this  morning  of  November  7,  1907, 
when  the  first  witness  for  the  Government  was  called  by  the  prose- 
cuting attorney,  sworn  by  the  deputy  clerk  of  court,  and  took  his 
place  upon  the  stand. 

Judge  Carland  of  South  Dakota  (now  a  judge  of  the  Federal 
Commerce  Court  at  Washington)  was  on  the  bench.  At  the  head 
of  the  Government  counsel  table  sat  former  Judge  Chester  H.  Krum, 
special  counsel  for  the  prosecution.  Near  him  were  seated  Prose- 
cuting Attorneys  Blodgett,  Danes  and  Young.  Postoffice  Inspectors 
Stice,  Reid,  Fulton,  Sullivan  and  others  also  occupied  seats  at  this 
table,  coming  and  going  from  day  to  day.  At  the  head  of  the 
counsel  table  for  the  defense  sat  Judge  Shepard  Barclay.  Near 
him  were  his  associates,  Thomas  T.  Fauntleroy  and  Special  Counsel 


710  THE  SIEGE  OF  UXIVERSITY  CITY 

C.  D.  O'Brien  of  St.  Paul.  At  the  centre  of  this  table  and  directly 
opposite  the  jury  box,  not  ten  feet  distant,  sat  the  defendant,  Lewis. 
The  trial  was  opened  by  Judge  Chester  H.  Kruni,  special  prose- 
cutor for  the  Government.  For  more  than  two  hours  Krum  ad- 
dressed the  jury,  stating  what  the  Government  expected  to  prove. 
At  the  close  of  his  opening  address  he  called  the  first  witness  for 
the  Government.  This  was  former  Postoffice  Inspector  James 
L.  Stice,  then  assistant  postmaster  at  St.  Louis.  Stice  told  the  story 
of  the  first  visit  of  the  inspectors  to  University  City.  With  this  the 
reader  is  familiar.  He  devoted  most  of  his  time  to  identifying 
bound  volumes  of  the  Woman's  Magazine  and  Woman's  Farm 
Journal,  circulars  and  letters  which  Lewis  mailed,  all  containing 
his  announcements  touching  the  bank  and  the  prospectus,  "Banking 
by  Mail."  He  was  then  withdrawn  by  the  Government,  with  the 
right  to  recall  him  at  any  time.  The  exhibits  introduced  by  the 
Government  were  many.  They  consisted  of  Lewis'  editorials,  sub- 
scription blanks  and  other  literature  connected  with  the  organization 
of  the  bank.  According  to  the  St.  Louis  Times,  "the  keynote  of  all 
these  writings  was  co-operation."  Lewis  was  said  to  have  listened 
attentively  to  the  reading  of  the  exhibits,  occasionally  smiling  as 
some  particularly  telling  portion  of  his  writings  was  emphasized. 
He  consulted  frequently  with  his  counsel.     Says  the  Times: 

After  an  hour  Mr.  Blodgett  called  upon  former  Judge  Krum  to  take  a 
turn  at  the  reading,  with  the  remark  that  the  work  was  hard  on  his  throat. 
The  only  tilt  between  counsel  was  when  Mr.  O'Brien  objected  to  what  he 
termed  the  "sarcastic  accompaniments"  with  which  Mr.  Krum  read  portions 
of  I,ewis'  literature.  "The  only  accompaniment  to  the  reading  is  that 
which  comes  from  counsel  on  the  other  side,"  retorted  Krum.  Yards  of 
rosy  Lewis  promises  were  read  to  the  jury.  They  spent  the  morning  listen- 
ing to  the  appealingly-styled  editorials  of  Lewis'  publications  and  his  mag- 
nificently worded  requests   for  their  money. 

The  first  of  the  spectacular  features  which  made  the  Lewis  case 
the  most  notable  trial  in  the  annals  of  the  United  States  district 
court  at  St.  Louis  enlivened  the  headlines  of  the  St.  Louis  papers 
on  November  8.  "Lewis  Holds  Jury  Wlien  Lawyers  Fail,"  says 
the  Republic.  "Lewis  Reads  'Millions  in  It'  Ads  to  His  Jury," 
says  the  Post-Dispatch.  And  "Lewis  Still  Reads  to  the  Jury," 
said  the  final  edition  of  the  Times.  According  to  the  next  morn- 
ing's Republic,  Lewis  temporarily  assumed  direction  of  his  own 
case  and  read  to  the  jury  for  more  than  two  hours  from  his  pros- 
pectus, "Banking  by  Mail."     The  Republic  says: 

This  came  about  when  the  array  of  counsel  on  both  sides  had  confessed  to 
being  fagged  out  from  reading.  The  jury  in  Judge  Garland's  court  showed 
plain  signs  of  weariness.  Then  Mr.  Lewis  injected  new  life  into  the  pro- 
ceedings and  soon  had  the  attention  of  all.  Counsel  for  the  Government 
read  many  pages  from  Lewis'  literature.  They  then  offered  the  rest  in  evi- 
dence unread.  Counsel  for  Lewis  objected,  n'laintaining  that  all  should  be 
read,  or  none.  United  States  Attorney  Blodgett  retorted  that  he  did  not 
object,  but  that  the  task  must  be  finished  by  someone  else,  as  both  Judge 
Krum  and  himself  were  physically  exhausted.  O'Brien  then  read  until 
his  throat  gave  way.  The  jury  gave  evidence  of  being  wearied  by  the  steady 
monotone.     At  this   juncture,   Mr.    Lewis  offered   his   services.     There  was 


THE  DREYFUS  CASE  OF  AMERICA  711 

strong  objection  from  the  prosecution,  and  a  brisk  clash  between  Messrs. 
Blodgett  and  O'Brien.  "We  object  to  any  such  play  as  that,"  shouted  At- 
torney Blodgett.  "What  did  you  say?"  demanded  Attorney  O'Brien,  glar- 
ing at  the  district  attorney.  "I  made  it  as  a  statement,"  said  Mr.  Blod- 
gett, with  anger  in  his  voice,  "and  I  will  stand  by  it."  "The  statement  is 
false,"  shouted  Mr.  O'Brien.  "The  defendant  may  read  if  he  wants  to," 
said  Judge  Carland  in  calm  consent.  "The  defendant  has  a  right  to  con- 
duct his  entire  defense  himself,  if  he  sees  fit." 

When  Mr.  Lewis  started  to  read,  jurors  who  had  been  drooping  in  their 
chairs,  sat  up.  Before  he  had  proceeded  far  they  became  thoroughly  inter- 
ested. When  court  adjourned  after  the  defendant  had  spoken  for  more 
than  two  hours,  each  man  on  the  panel  seemed  still  absorbed  by  the  thoughts 
conveyed  by  the  publisher  and  author  of  the  articles.  For  Mr.  Lewis  em- 
phasized tlie  telling  points  during  his  perusal  and  laid  stress  on  the  differ- 
ences between  his  projects  and  those  advanced  by  other  banking  institutions. 

The  Globe-Democrat  of  November  9  announced  the  arrival  of 
Assistant  Attorney-General  Goodwin  and  his  associate,  Lawrence, 
at  St.  Louis,  as  evidence  that  Washington  was  greatly  interested  in 
the  trial  of  the  Government's  case.  Chief  Inspector  Vickery  was 
also  said  to  be  on  the  way  from  Washington.  Attention  was  also 
drawn  to  the  arrival  of  two  of  Lewis'  prominent  witnesses  from 
Kansas  City,  Arthur  Stilwell,  president  of  the  Kansas  City,  Mexico 
&  Orient  Railway,  and  Edward  Dickinson,  vice-president. 

THE    CASE    FOR    THE    PROSECUTION. 

On  Friday,  November  9,  the  reading  of  exhibits  was  concluded 
and  two  of  the  principal  witnesses  for  the  Government  took  the 
stand.  These  were  James  P.  Bucher,  a  farmer  of  Zora,  Mo.,  whose 
name  will  appear  prominently  in  the  sequel  of  this  story,  and  Isaac 
T.  Beal,  a  map  canvasser  of  Dresden,  O.  It  was  on  transactions 
with  these  two  men  and  with  a  third  witness,  Mrs.  Mary  Wade  of 
Pontiac,  Mich.,  that  the  Government  based  the  three-count  indict- 
ment on  which  the  defendant  was  on  trial.  Fully  twenty  women  wit- 
nesses for  the  Government  were  also  present.  Bucher  said  that  as 
a  result  of  reading  Lewis'  literature  he  had  invested  in  the  stock 
of  the  bank  a  total  of  $500,  He  received  87  per  cent  of  his  money 
from  the  receiver  of  the  bank  a  year  or  so  afterwards.  "This 
proposition  of  banking  by  mail  looked  good  to  you.^"  asked  Attorney 
O'Brien  for  the  defense.  "Yes,  the  way  Lewis  explained  it,  it  did," 
said  Bucher.  The  testimony  of  Beal  was  to  much  the  same  effect. 
Both  testified  to  having  received  87  per  cent  of  the  amount  they 
had   invested. 

The  testimony  of  Mrs.  Wade  (the  third  witness  mentioned  in 
the  indictment)  was  enlivened  by  an  incident  which  greatly  amused 
the  gentlemen  of  the  press.  The  witness  told  of  having  invested 
four  dollars  in  the  stock  of  the  People's  Bank.  This  she  afterwards 
exchanged  for  Lewis'  trustee  note,  with  interest  payable  in  three 
years.  The  note  was  in  her  possession  and  was  exhibted.  She  had 
once  allowed  the  postoffice  inspectors  to  take  the  note,  she  said,  but 
when  asked  by  counsel  for  Lewis  if  he  might  take  it  for  a  moment, 
she  turned  to  Judge  Carland  and  said  in  an  appealing  voice:  "Shall 
I  give  it  up.^"    When  assured  by  the  Court  that  she  would  get  her 


712  THE  SIEGE  OF  UNIVERSITY  CITY 

rote  back,  ]\Irs.  Wade  remarked,  "Well,  I  guess  it  will  be  safe  for 
a  few  minutes."  A  general  laugh,  in  which  even  the  magistrate 
indulged,  was  said  to  have  been  brought  out  later  in  her  testimony. 
She  was  answering  questions  before  counsel  had  time  to  object. 
Judge  Krum  asked  that  she  talk  more  slowly.  "Well,  can't  I  talk 
a  little?"  asked  the  witness.  "Yes,  madam,"  said  Krum.  "That  is 
a  privilege  of  all  women,  which  even  the  Government  will  never 
be  able  to  prevent." 

Mrs.  Belle  M.  Ritchings  of  Berea,  Ohio,  was  said  by  the  Times 
to  have  made  a  hit  with  the  la^vyers.  "From  a  spectacular  point 
of  view,"  says  the  reporter,  "she  was  eminently  fit,  being  young, 
handsome  and  well  dressed.  Her  manner  was  such  as  to  make 
the  lawyers  on  both  sides  smile  approvingly.  So  lucid  and  sure 
were  her  answers  that  one  attorney  asked  if  she  was  not  a  business 
woman.  She  blushed  prettily  and  said  that  she  was  a  stenographer 
before  she  married  Mr.  Ritchings,  who  is  a  civil  engineer,  and 
probably  learned  a  little  about  business.  She  had  invested  five 
hundred  dollars  in  the  People's  Bank.  Her  mother  had  put  in 
one  hundred  and  fifty  dollars.  Together  they  had  invested  thirty 
dollars  for  her  child.  Eighty-seven  per  cent  had  been  returned  to 
them  by  the  receiver.  The  Post-Uispatch  remarked  that  a  three- 
year-old  baby  girl  stockholder  of  the  People's  Bank,  the  daughter 
of  Mrs.  Ritchings,  was  one  of  the  star  witnesses  at  the  trial.  Mrs. 
Ritchings  was  asked  by  Judge  Krum,  special  counsel  for  the 
Government,  just  before  she  left  the  witness  stand,  whether  the 
baby  was  in  court.  "Yes,  that  is  the  $30  child  over  there,"  she 
said,  pointing  to  the  place  in  the  courtroom  where  the  baby  was 
cooing  and  plajdng  about  the  chairs  of  a  number  of  other  witnesses. 
A  laugh  at  the  nickname  she  applied  to  her  child  spread  over  the 
courtroom. 

Some  fifteen  or  twenty  other  investors  in  the  bank  were  called 
as  witnesses.  The  majority  of  these  were  women.  The  sums  in- 
vested ranged  from  one  dollar  upwards.  Miss  Hattie  J.  Harrison 
was  summoned  as  a  witness  from  her  home  at  Burke  Station,  Va. 
She  had  bought  one  one-hundredth  of  a  share  of  stock  for  one 
dollar  and  had  exchanged  it  for  a  trustee  note.  She  concluded  later 
that  she  wanted  her  dollar,  and  twice  wrote  for  it.  Then  she  com- 
municated with  the  postoffice  authorities,  with  the  result  that  she 
was  brought  to  St.  Louis  to  testify.  Miss  Harrison,  according  to 
the  newspapers,  displayed  a  humorous  bent.  She  seemed  to  regard 
both  her  investment  and  her  testimony  as  a  joke.  She  enlivened 
the  proceedings  considerably  by  her  manner  upon  the  stand.  The 
testimony  of  these  various  witnesses  was  substantially  alike.  They 
had  invested  in  the  stock  of  the  bank  upon  their  faith  in  Lewis' 
representations.  After  the  bank  was  destroyed,  they  had  taken 
advantage  of  one  or  another  of  their  three  options.  They  had  been 
led  by  Lewis'  promotion  literature  to  believe  that  the  bank  was 
destined  to  be  a  great  success,  and  had  been  disappointed. 


THE  DREYFUS  CASE  OF  AMERICA  713 

A  new  phase  of  the  Government's  case  was  introduced  on  Wednes- 
day when  former  Postoflice  Inspector  James  L.  Stice  was  recalled 
to  the  stand.  According  to  the  St.  Louis  Times,  Stice  was  sub- 
jected to  a  grilling  cross-examination,  when  he  declared  he  "could 
not  remember"  whether  or  not  an  article  concerning  the  People's 
Bank,  which  was  published  in  the  Post-Dispatch  extra  on  May  31, 
1905,  contained  portions  of  the  inspectors'  report.  When  this 
question  was  asked,  Stice  looked  the  article  over  carefully  and 
after  some  time  answered,  "I  don't  remember."  "When  did  you 
forget.^"  asked  Mr.  O'Brien.  The  witness  was  visibly  embarrassed, 
but  at  last  said  the  article  referred  to  some  matters  discussed  in 
the  report.  He  "could  not  recall"  whether  or  not  it  contained  in 
exact  words  any  part  of  the  report.  "Was  not  this  paragraph  in 
quotation  marks  a  part  of  your  report?"  asked  Mr.  O'Brien.  "I 
can't  say  whether  it  is  exactly  the  same  or  not,"  Stice  replied.  "Is 
it  not  very  similar.''"  the  cross-examiner  persisted.  "Yes,  it  is  very 
similar  to  a  portion  of  the  report,"  the  witness  said. 

Stice  then  gave  in  great  detail  the  substance  of  the  evidence 
collected  by  the  inspectors  during  their  investigation,  and  embodied 
in  their  report.  This  was  the  evidence  on  which  the  fraud  order 
was  recommended.  Affidavits  procured  from  Lewis  and  Putnam 
by  the  inspectors  were  identified  by  the  witness  and  admitted.  Stice 
was  permitted  to  refresh  his  memory  from  written  memoranda  taken 
from  Lewis'  books  and  those  of  the  bank.  A  careful  checking  of 
all  the  evidence  accumulated  by  the  inspectors  (as  shown  by  the 
official  records  submitted  by  the  Government  at  the  congressional 
inquiry)  shows  that  every  material  item  of  their  testimony  against 
Lewis  was  admitted  and  fully  corroborated  during  this  trial.  As 
the  whole  of  the  inspectors'  case  is  now  familiar  to  the  reader,  Stice's 
testimony  and  that  of  other  Federal  officials  need  not  detain  us 
further.  Sundry  books  of  account  and  other  technical  records  were 
also  introduced.  Testimony  touching  the  propriety  of  issuing  the 
fraud  order  was  ruled  out  by  the  court.  The  Post-Dispatch  extra 
and  the  letter  of  Swanger  to  Fulton  relating  to  the  reorganization 
of  the  directorate  of  the  bank  were  both  excluded.  "No  presump- 
tion will  be  indulged  in,"  said  Judge  Carland,  "that  the  Govern- 
ment is  not  acting  in  this  case  in  good  faith." 

Bank-Examiner  Samuel  Nichols,  who  had  assisted  Bank-Examiner 
Cook  in  the  examination  of  the  People's  Bank,  in  April,  1905,  was 
called  to  the  stand  on  Friday,  November  15.  According  to  the  St. 
Louis  Republic,  Nichols  gave  a  detailed  statement  of  the  bank's  af- 
fairs. He  testified  that  after  weeks  of  examination  he  found  the 
bank  absolutely  solvent,  and  had  so  reported  to  the  secretary  of 
state.  He  said  every  opportunity  was  afforded  by  Lewis  and  his  em- 
ployees to  make  the  most  rigid  investigation,  and  that  where  error 
was  found,  it  was  explained.  Suggestions  made  to  Lewis  touching 
the  illegality  of  holding  stocks  and  other  matters  were  immediately 
complied  with  without  objection.  The  evening  papers  of  Friday, 
November  15,  stated  that  Chief  Bank-Examiner  Cook  had  succeeded 


714  THE  SIEGE  OF  UNIVERSITY  CITY 

Nichols  upon  the  stand.  He  corroborated  the  former's  testimony. 
Cook  was  followed  by  Russell  P.  Goodwin  for  the  Postoffice  Depart- 
ment at  Washington.  The  testimony  of  Goodwin  showed  plainly 
that  the  witness'  recollection  was  green  as  to  points  relied  upon  to 
secure  conviction,  but  faulty  touching  the  evidence  submitted  to 
Lewis  and  counsel  for  the  bank  at  the  hearing  in  their  defense. 
Goodwin  admitted  that  no  stenographic  report  of  the  hearing  had 
been  taken.  He  relied  solely  upon  memory.  Although  a  large  num- 
ber of  witnesses  from  distant  parts  were  present  whose  testimony 
had  not  been  given,  the  Government  abruptly  rested  its  case  at  4:10 
Friday  afternoon.  Counsel  for  the  defense  thereupon  moved  that 
the  jury  be  instructed  to  return  a  verdict  of  not  guilty,  on  the  ground 
that  the  evidence  was  insufficient  to  convict.  This  motion  was  over- 
ruled. 

THE    THEFT    OF    MADDEN's   TRUNK. 

Just  here  occurred  still  another  coincidence  so  striking  as  to  seem 
almost  unbelievable,  but  capable  of  proof  in  any  court  of  justice. 
On  the  very  eve  of  the  opening  of  the  defense,  a  small  steamer 
trunk  containing  the  private  papers  of  former  Third  Assistant  Post- 
master-General Madden  was  stolen  from  his  room  at  the  Jefferson 
Hotel.  In  this  trunk  were  copies  of  many  official  documents  thought 
by  ^Madden  to  prove  the  existence  of  a  conspiracy  within  the  Post- 
office  Department  to  ruin  Lewis,  and  especially  letters  believed  by 
him  to  incriminate  Cortelyou  as  a  conspirator.  The  fact  that  Mad- 
den had  in  his  possession  copies  of  official  documents  touching  the 
Lewis  case  was  known  to  the  inspectors  and  other  officials  of  the 
Postoffice  Department.  The  possibility  of  some  advisory  relation 
of  Madden  to  Lewis  had  long  been  suspected  by  them.  The  pres- 
ence of  the  former  third  assistant  as  an  interested  spectator  during 
the  trial  confirmed  these  suspicions  and  indicated  the  probability  that 
Madden  would  be  called  as  one  of  the  chief  witnesses  for  the  de- 
fense. The  entire  contents  of  ^ladden's  trunk  would  have  been 
worth  no  more  than  an  equal  quantity  of  waste  paper  to  others  than 
the  officials  concerned  in  the  prosecution  of.  Lewis,  or  to  the  author- 
ities at  Washington  as  a  possible  means  of  sustaining  charges  against 
Madden  of  malfeasance  in  office.  What  took  place  may  be  stated  in 
substance  in  Madden's  own  words  as  related  to  the  author.  Like 
the  many  other  coincidences  to  which  attention  has  been  directed,  the 
reader  must  draw  his  own  conclusions  as  to  the  significance  of  the 
following  high-handed  proceeding.     Madden  says: 

I  came  over  to  the  JeflFerson  Hotel,  where  I  was  staying  at  St.  Louis, 
for  lunch  on  Saturday,  November  15,  the  clay  on  which  the  Government 
rested  its  case  against  Mr.  Lewis.  After  luncheon,  1  went  up  to  my  room 
for  the  purpose  of  obtaining  a  document  from  my  trunli.  After  doing  so  I 
closed  the  trunk  and  locked  it.  I  know  definitely,  therefore,  that  it  was  in 
its  proper  place  at  the  time.  I  then  took  the  elevator  downstairs  and  started 
for  the  courtroom  to  attend  the  afternoon  session.  Before  I  had  gone  two 
hundred  yards  from  the  hotel  it  occurred  to  me  that  I  might  need  another 
document.  I  therefore  returned  immediately  to  my  room.  The  trunk  was 
gone.     I  had  not  been  absent  ten  minutes.     Meantime,  it  had  been  stolen. 


THE  DREYFUS  CASE  OF  AMERICA  716 

I  rushed  down  to  the  clerk  as  quickly  as  possible  and  raised  the  alarm. 
The  house  detective  and  chief  porter  were  summoned.  I  described  the  cir- 
cumstances. I  told  them  that  the  trunk  must  still  be  in  the  hotel,  as  there 
had  not  been  time  to  remove  it.  I  asked  them  by  what  means  and  from 
what  part  of  the  hotel  it  could  be  conveyed  away.  The  chief  porter  told 
me  to  follow  him.  I  did  so.  He  led  the  way  to  a  passage  at  the  rear  of  the 
hotel,  where  there  was  a  freight  elevator  leading  down  to  the  baggageroom, 
in  which  outgoing  baggage  was  stored.  Near  the  doorway  I  found  my  trunk. 
It  had  evidently  been  taken  from  my  room  to  some  other  room  in  the  hotel. 
Then  a  porter  had  been  called  to  remove  it  in  the  usual  manner.  It  was  evi- 
dently about  to  be  taken  from  the  hotel. 

I  am  aware  now  that  I  ought  to  have  caused  the  trunk  to  be  watched 
and  the  persons  calling  for  it  to  be  arrested,  but  at  the  moment  my  only 
thoughts  were  to  examine  the  contents  and  see  whether  anything  had  been 
purloined.  I  therefore  ordered  the  trunk  to  be  returned  to  my  own  room, 
where  I  opened  it  and  examined  the  contents.  Nothing  had  been  taken. 
There  had  not  been  time  for  that.  I  had  evidently  been  watched  and  the 
thief,  or  thieves,  had  supposed  that  I  would  be  occupied  in  the  courtroom 
for  several  hours  and  that  there  would  be  plenty  of  time  in  which  to  make 
their  "get-away."  I  have  no  means  of  knowing  who  they  were,  but  I  could 
make  a  guess  which  I  think  would  not  come  far  short  of  the  truth. 

The  feature  of  the  eleventh  day  of  the  trial  was  the  opening  ad- 
dress to  the  jury  of  Judge  Shepard  Barclay,  senior  counsel  for  the 
defense.  Judge  Barclay  (whose  title  of  courtesy  is  due  to  a  term  of 
service  as  Justice  of  the  Supreme  Court  of  the  State  of  Missouri), 
was  counsel  for  the  bank  during  the  entire  period  of  its  promotion 
and  organization.  His  thorough  familiarity  with  its  affairs  enabled 
him  to  present  a  masterly  analysis  of  the  indictment,  and  the  evi- 
dence that  the  defense  proposed  to  offer  touching  each  of  its  several 
allegations.  At  the  close  of  his  opening  address  Judge  Barclay  ex- 
pressed the  wish  that,  at  some  time  during  the  trial,  the  jury  be 
taken  out  to  University  City  in  the  custody  of  the  deputy  United 
States  marshal  and  shown  the  Woman's  Magazine  Building,  where 
the  quarters  of  the  People's  Bank  were  located.  This  request  was 
subsequently  denied  by  this  court. 

THE  DEFENDANT  ON  THE  STAND. 

The  climax  of  the  trial  came  on  Monday,  November  18,  1907. 
Lewis  insisted  that  his  attorneys  permit  him  to  be  among  the  first 
witnesses  in  his  own  behalf.  He  took  the  stand  on  that  day  imme- 
diately upon  the  opening  of  court,  to  tell  the  story  of  the  rise  and 
fall  of  the  People's  Bank.  His  direct  examination,  conducted  by 
Judge  Barclay,  was  finished  at  3:30  p.  m.  From  that  time  until 
court  adjourned  at  5  p.  m.,  says  the  St.  Louis  Times,  he  was  sub- 
jected to  severe  cross-examination  by  Chester  H.  Krum,  special  Gov- 
ernment counsel,  without  at  any  time  losing  his  self-possession.  The 
dramatic  scenes  that  followed  may  still  be  viewed  in  the  vivid  word 
pictures  of  the  newspaper  men  gathered  at  the  press  table  at  the 
angle  between  the  judge's  rostrum  and  the  jury  box  just  below 
the  witness  stand  at  His  Honor's  right  and  rear  in  the  Federal  court 
room.  As  Lewis  brought  forth  his  story,  under  the  skillful  guidance 
of  counsel,  one  newspaper  man  after  another  would  slip  from  his 
chair  to  telephone  to  his  city  editor  the  latest  stage  of  the  narrative. 


716  THE  SIEGE  OF  UNIVERSITY  CITY 

An  associate  would  instantly  drop  into  the  vacant  place.  Fresh 
forms,  meantime,  were  being  constantly  made  up  in  every  evening 
newspaper  office  in  St.  Louis,  and  extra  after  extra  was  put  upon 
the  streets  as  the  dramatic  action  in  the  court  room  reached  each 
successive  climax.  A  composite  picture,  assembled  from  the  lan- 
guage of  the  various  newspaper  reporters  present,  would  read  some- 
what like  this : 

Edward  Gardner  Lewis  took  the  witness  stand  in  his  own  behalf  soon 
after  the  opening  session  Monday.  Sitting  erect  in  the  witness  chair,  his 
elbow  on  the  end  of  Judge  Garland's  desk,  Lewis  answered  questions  by  his 
senior  counsel.  Judge  Barclay.  Judge  Krum,  of  counsel  for  the  prosecution, 
indicated  the  combative  intent  of  the  Government  by  constant  interruptions 
of  Lewis'  testimony.  It  was  the  twelfth  day  of  his  trial  in  the  United 
States  District  Court  on  the  charge  of  using  the  mails  with  intent  to  de- 
fraud. The  defendant  was  subjected  to  a  continuous  fire  of  objections  from 
the  Government's  side.  Counsel  for  the  prosecution  desired  that  the  exam- 
ination be  confined  to  narrow  limits.  They  demanded  that  no  questions  be 
asked  except  such  as  would  admit  of  categorical  answers.  All  such  objec- 
tions were  overruled.  The  witness  was  permitted  to  answer  at  length,  and 
practically  in  his  own  way.  Judge  Carland,  over  persistent  objections  by  the 
Government  counsel,  allowed  him  a  wide  range  for  explaining  his  theories. 

We  may  pause  here  to  mention  an  unverified  rumor,  which,  if 
true,  may  account  in  some  degree  for  the  attitude  of  Judge  Carland 
in  suffering  Lewis  to  tell  his  story  in  his  own  way.  It  may  also 
explain  the  failure  of  the  court  to  rebuke  the  dramatic  outburst  of 
the  witness,  at  a  later  stage  of  the  trial,  under  circumstances  which 
will  presently  appear.  During  his  testimony  before  the  Ashbrook 
Committee  at  Washington,  Lewis  said:  "In  the  midst  of  the  trial, 
according  to  information  given  me  by  Mr.  Fauntleroy,  one  of  our 
attorneys,  based  upon  the  statement  of  Judge  Carland  himself. 
Judge  Goodwin,  assistant  attorney-general  for  the  Postoffice  Depart- 
ment, asked  for  an  interview  with  Judge  Carland  in  chambers.  In 
that  interview,  Goodwin  stated  that  it  was  a  matter  of  vital  impor- 
tance to  the  Department  that  I  be  convicted."  Later,  during  the 
sessions  of  the  committee  at  St.  Louis,  Lewis  said,  in  substance: 

I  wish  to  withdraw  my  previous  testimony  regarding  the  statement 
ascribed  to  one  of  my  attorneys,  Mr.  Thomas  T.  Fauntleroy.  Upon  further 
investigation  and  reflection,  I  have  become  convinced  that  all  the  informa- 
tion obtainable  was  hearsay,  and  came  in  such  a  confidential  way  that  I  was 
not  at  liberty  to  make  it  public.  I  do  not  wish  to  give  the  committee  to 
understand  that  the  substance  of  the  facts  stated  was  incorrect,  but  merely 
that  the  information  was  obtained  from  a  confidential  source,  and  that  I 
did  not  understand,  when  testifying,  that  I  was  committing  a  breach  of 
confidence. 

Goodwin,  under  the  congressional  probe,  avers  that,  while  he 
did  encounter  Judge  Carland  in  Judge  Adams'  chambers,  he  was 
not  guilty  of  the  gross  breach  of  propriety  thus  attributed  to  him. 
A  resolution  was  passed  by  the  committee  to  summon  Judge  Car- 
land  himself  to  testify  to  the  purport  of  this  conversation.  Up  to 
the  present  time  this  has  not  been  done.  This  allegation,  like  that 
touching  the  alleged  traffic  in  fraud  orders  by  the  Goodwin  broth- 
ers must  be  summed  up  by  the  Scotch  verdict  "not  proven."    It  is  to 


THE  DREYFUS  CASE  OF  AMERICA  717 

be  hoped  that  Judge  Carland  will  be  accorded  opportunity  to  dispel 
this  dubiety.  Did  a  responsible  member  of  the  Administration  thus 
seek  to  influence  a  member  of  the  judiciary?  If  so,  the  fact  should 
be  placed  on  record.  If  not,  suspicion  should  be  cleared  from  the 
name  of  Assistant  Attorney-General  Goodwin.  If,  however,  the 
otherwise  inexplicable  leniency  of  Judge  Carland  toward  the  de- 
fendant throughout  this  trial,  was  actually  due  to  resentment,  at 
what  was  construed  by  him  as  an  attempt  to  influence  his  judicial 
conduct.  His  Honor  deserves  to  rank  with  that  eminent  English  ju- 
rist. Sir  Matthew  Hale,  who,  on  a  similar  occasion,  responded  to  the 
emissary  of  the  Throne  of  England,  "Go  tell  your  master  that  I 
shall  decide  this  case  according  to  the  very  truth  and  justice  of  it." 

The  press  accounts  continue:  The  witness  outlined  his  plan  for  the  for- 
mation of  his  postal  bank  to  the  minutest  detail.  He  stated  in  full  the 
theory  of  how  he  expected  to  create  "the  greatest  banking  institution  in  the 
world.-'  The  Government  counsel  made  repeated  attempts  to  prevent  testi- 
mony upon  such  lines,  but  were  rebuffed  by  the  Court.  The  witness'  testi- 
mony was  clear  and  comprehensive.  His  manner  direct  and  earnest.  He 
often  turned  from  the  jury  and  looked  directly  at  the  Government  attorneys 
as  though  quite  as  anxious  to  convince  them  of  his  innocence  as  the  men 
who  will  pass  upon  the  question  of  his  intent.  At  times  he  spoke  with  dra- 
matic intensity.  Once  there  came  a  touch  of  bittterness  in  his  tone  as  he 
said,  "All  my  enterprises  were  struck  down  at  once.  I  was  isolated  from 
the  world.  I  could  not  even  get  a  letter  from  my  wife  or  mother,  who 
were  traveling  abroad." 

His  voice  is  somewhat  high-pitched,  clear  and  ringing.  It  could  be  heard 
in  all  parts  of  the  court  room.  When  asked  if  it  was  his  purpose  to  de- 
fraud any  one  when  he  organized  the  People's  Bank,  his  response  came 
prompt  and  clear.  "No !"  was  his  vigorous  protest.  "I  intended  to  carry 
out  all  my  representations  fully.  What  is  more,  I  would  have  done  so,  had 
I  been  given  the  chance." 

LEWIS  "trims    KRUm's   WHISKERS.'* 

"With  a  smiling  countenance,"  says  the  Post-Dispatch,  *'Lewis 
withstood  the  onslaught  of  the  bitter  examination  at  the  hands  of 
Krum,  late  Monday  afternoon."    Says  the  Republic: 

Lewis  submitted  to  two  hours  of  the  severest  grilling.  During  the  time 
when  the  most  pointed  questions  were  put  to  him  he  maintained  an  air  of 
the  utmost  nonchahmce.  Each  time  he  answered  with  an  explanation,  al- 
though his  interrogator  demanded  a  direct  reply.  This  procedure  seemed 
to  anger  Attorney  Krum.  The  witness  appeared  to  enjoy  it.  Lewis  was 
not  disturbed  by  the  cross-examination  at  any  time.  He  denied  that  he  had 
intended  to  divert  a  cent  to  his  own  use,  or  that  he  had  even  done  so.  He 
was  emphatic  in  his  assertion  that  he  would  have  succeeded  in  his  plans  had 
he  been  allowed  to  carry  on  his  business  undertakings,  and  "had  the  bank 
not  been  destroyed  by  the  inspectors  and  state  officers." 

"The  defendant,"  says  the  Globe-Democrat,  "was  'as  chipper  as 
a  lark'  when  he  stepped  from  the  stand  at  the  adjournment  of  court, 
notwithstanding  the  terrific  ordeal  to  which  he  had  been  subjected." 
Three  times  his  attorneys  were  forced  to  demand  protection  for  the 
witness.  Once  he  said  that  the  postoffice  inspectors  had  made  re- 
peated attacks  on  his  bank  and  upon  every  corporation  in  which  he 
was  interested.  "That  is  absolutely  false,"  interposed  Krum.  The 
defendant's   attorneys   again  insisted   on   counsel   refraining  from 


718  THE  SIEGE  OF  UNIVERSITY  CITY 

insulting  remarks.  During  the  cross-examination  Judge  Krum  ques- 
tioned the  witness  as  to  what  he  had  done  with  funds  sent  him  by 
subscribers.  He  replied  that  he  had  put  them  in  the  bank  in  his 
own  name,  because  they  were  sent  to  him  individually.  "Is  that  the 
only  explanation  you  can  give  for  misajDpropriating  these  funds.''" 
asked  Judge  Krum.  This  was  ordered  stricken  out.  Summing  up 
the  impressions  of  the  first  day's  trial,  the  reporter  for  the  Post- 
Dispatch  remarked: 

Lewis,  on  the  witness  stand  Monday,  was  two  different  men  morning  and 
afternoon.  During  liis  direct  examination  by  Judge  Shej^ard  Barclay  his 
manner  was  somewhat  listless  and  his  voice  low.  When  Judge  Krum  took 
him  in  hand  on  cross-examination  his  manner  changed.  He  became  care- 
ful and  alert.  His  answers  were  given  deliberately  and  with  slow  emphasis. 
He  evidently  realized  his  disadvantage  under  the  merciless  probing  of  the 
big  lawyer  whose  questions  were  fired  savagely  and  with  contempt.  Lewis, 
for  a  man  who  is  engaged  in  so  many  large  enterprises,  is  strangely  youth- 
ful in  appearance.  At  times  he  looks  almost  boyish.  He  seems  more  like 
an  alert  and  ambitious  clerk  than  the  projector  of  magazines,  the  town- 
builder,  and  the  man  ambitious  to  be  "the  president  of  the  largest  bank  in 
the  world."  His  voice  when  replying  to  questions  was  oratorical  and  jerky. 
He  has  a  sort  of  snap-shot  but  exact  way  of  putting  things.  He  seems 
to  have  carefully  studied  his  subject  and  to  know  the  answer  to  every  ques- 
tion that  can  be  put  to  him.  This  sureness  was  evident  as  he  gave  exact 
dates  and  amounts  of  money  to  the  very  cent.  He  often  corrected  counsel 
on  matters  of  fact  when  they  went  astray.  He  is  a  fluent  talker,  but  his 
replies  are  precise  and  categorical.  He  taps  off  each  point  with  the  middle 
finger  of  his  right  hand  on  the  railing  of  the  witness  box  to  emphasize  his 
meaning  and  make  his  points  entirely  clear. 

When  court  opened  on  Tuesday,  the  thirteenth  day  of  the  trial, 
Lewis  was  once  more  upon  the  stand  and  Judge  Krum  was  again 
plying  him  with  a  pitiless  fire  of  cross-questions.  The  Republic 
says: 

The  defendant  was  fresh  in  appearance  and  smiling  when  he  took  the 
stand.  Lender  a  severe  fire  of  questions  he  preserved  for  the  most  part 
the  same  calm  demeanor  which  he  exhibited  Monday.  But  when  the  Govern- 
ment attorney  took  him  over  and  over  the  same  ground,  in  an  apparent  ef- 
fort to  trip  him  into  a  contradictory  statement,  he  showed  slight  signs  of 
irritation.  He  would  then  lean  far  forward,  with  arms  extended  and  reply 
with  emphasis.  Immediately  after  recovering  himself  he  would  settle  back 
in  his  chair  and  answer  the  next  question  with  a  smile. 

Shortly  before  the  noon  adjournment  came  the  dramatic  climax 
of  the  trial.  It  still  lives  in  the  memory  of  every  well-informed  St. 
Louisan.  Lewis,  angered  by  an  insinuation  of  his  interrogator, 
flushed,  rose  from  the  witness  chair,  stepped  down  from  the  stand, 
^nd  advancing  upon  his  prosecutor,  shook  his  finger  in  the  face  of 
Judge  Krum.  His  slender  figure  quivered  with  wrath.  His  teeth 
gritted,  and  his  fists  clenched  menacingly.  "You  are  a  deliberate 
liar,"  he  cried  in  steely  tones.  "That  is  a  lie  that  has  been  circu- 
lated by  you  and  your  crowd  for  the  last  two  years.  This  is  the 
first  time  I  have  had  an  opportunity  to  refute  it  before  a  jury  of  my 
countrymen.  I  want  to  nail  right  here  this  lie  that  I  transferred  my 
home  to  my  wife  after  pledging  it  as  security.  I  did  transfer  my 
home  to  my  wife,  but  it  was  not  until  after  I  had  paid  this  so- 


THE  DREYFUS  CASE  OF  AMERICA  719 

called  fifty  thousand  dollar  loan  to  the  bank,  dollar  for  dollar,  with 
interest.  When  that  transfer  took  place  every  cent  of  the  indebted- 
ness had  been  paid."  Judge  Krum  reddened  to  the  very  roots  of 
his  luxurious  whiskers  when  Lewis  denounced  him  as  a  liar,  and  ap- 
pealed to  the  Court  for  protection,  but  he  made  no  reply  to  the 
charge.     Says  the  St.  Louis  Republic: 

"You  never  have  been  able,  and  you  are  not  now  able,  to  produce  in  this 
court  one  stockholder  or  depositor  in  the  People's  United  States  Bank  who 
ever  made  a  complaint  until  this  proceeding  was  brought  on  behalf  of  the 
Government."  The  effect  of  this  statement  made  Tuesday  by  E.  G.  Lewis 
under  cross-examination  by  Judge  Chester  H.  Krum,  was  startling.  The 
crowd  in  the  court  room  cheered  the  defendant  and  clapped  their  hands 
so  loudly  that  the  sound  of  the  gavel  could  not  be  heard  for  many  min- 
utes. A  moment  later  the  morning  session  in  the  court  was  adjourned. 
Lewis  had  stepped  from  the  stand  while  speaking,  and  stood  pointing  his 
finger  at  Judge  Krum,  who  is  conducting  the  prosecution  for  the  Govern- 
ment. His  face  was  white,  his  finger  shook  and  his  voice  was  raised  as  he 
stooped  forward  toward  his  inquisitor.  When  he  had  finished  the  attorney 
started  to  speak,  but  his  words  were  drowned  by  the  cheers  that  followed. 

Many  times  during  the  morning  session  Lewis  and  the  lawyer  clashed, 
and  their  statements  often  verged  on  the  passing  of  the  lie.  Krum  once 
objected  to  Lewis'  use  of  the  word  "you"  in  making  a  statement  concerning 
the  Government's  attitude  toward  him.  "No  one  has  a  right  to  make  any 
such  statement  with  regard  to  me,"  said  the  attorney.  "Oh,"  replied  Lewis, 
"I  mean  the  persons  back  of  this  thing.  The  persons  whom  you  represent." 
"Well,  then,"  the  attorney  asked,  "whom  do  you  conceive  I  represent?" 
"You  know  well  enough  whom  I  mean,"  retorted  Lewis.  "You  know  who  is 
back  of  this  prosecution,  and  it  is  not  any  depositor  or  any  stockholder  of 
the  People's  United  States  Bank." 

Just  before  the  incident  noted,  Lewis  declared  as  he  was  stepping  down 
from  the  witness  stand,  "You  have  had  your  star  chamber  sessions  and  your 
gagging  processes  for  the  last  two  years.  This  is  the  first  time  we  have 
ever  been  able  to  get  you  before  twelve  men  and  a  judge.  Now  we  have 
you  out  in  the  open  where  we  can  look  at  you,  and  we  will  have  this  thing 
out."  "I  suppose,"  said  Krum  turning  to  Judge  Garland,  "this  kind  of  pro- 
cedure is  satisfactory  to  your  Honor."  "You  are  conducting  the  examina- 
tion," said  Judge  Garland,  "and  you  told  the  witness  a  few  minutes  ago  to 
go  ahead." 

The  court  room  was  crowded  when  Lewis  was  thus  dramatically 
telling  his  story  to  the  jury,  and  several  times  there  were  outbursts 
of  applause.  Once  the  spectators  clapped  their  hands  so  vigorously 
that  the  bailiff  rapped  for  order,  but  not  once  did  Judge  Carland  re- 
buke the  enthusiasm  of  Lewis'  admirers.  So  effective  were  the 
thrusts  of  the  witness,  so  keen  his  wit,  and  so  quick  and  incisive  his 
rejoinders,  that  the  big  lawyer,  who  has  won  the  epithet  of  the  bully 
of  the  St.  Louis  bar,  was  fairly  driven  from  the  field  and  forced 
again  and  again  to  invoke  the  protection  of  the  Court  against  the 
witness.  In  each  instance  he  was  met  by  Judge  Carland  with  the 
reply,  "You  have  asked  the  question  and  he  is  answering  it."  The 
crowd  in  the  court  room  cheered  and  clapped  their  hands,  and  the 
marshal  had  to  act  vigorously  to  restore  a  semblance  of  quiet.  The 
gavel  could  not  be  heard.  Veteran  lawyers  said  there  had  not  been 
anything  like  this  seen  in  the  Federal  Building  during  a  trial. 
Judge  Carland  sat  silent.     So  profound  was  the  impression  made 


720  THE  SIEGE  OF  UNIVERSITY  CITY 

upon  the  community  by  this  unexpected  and  startling  outburst  that 

the  Globe-Democrat  commented  editorially  upon  the  occurrence  in 

its  issue  of  Wednesday,  November   20,  under  the  title,  "A   Man 

Raised  Up."     It  said: 

That  Mr.  E.  G.  Lewis  is  a  wholly  unconventional  person  seems  to  be 
clearly  proved  br  his  outburst  on  the  witness  stand  in  the  Federal  court 
Tuesday,  while  he  was  being  grilled  by  a  lawyer.  Finding  himself  accused 
of  defrauding  the  stockholders  of  his  People's  United  States  Bank  by  bor- 
rowing their  money  on  his  house  as  collateral  and  afterwards  transferring 
the  property  to  his  wife,  he  shouted,  "That  is  a  deliberate  lie  and  you  know 
it."  This  was  iese  majeste.  *  *  *  The  examination  of  Lewis  along 
these  lines  appears  to  have  been  justified  in  the  effort  of  the  Government 
to  prove  fraudulent  intent.  None  tlie  less  the  people  who  have  seen  honest 
men  traduced  for  their  misfortune  in  having  been  called  as  witnesses,  re- 
joice that  a  man  has  at  last  resented  such  treatment  in  the  presence  of  the 
court.  Guilty  or  not  guilty,  Lewis  has  struck  a  responsive  chord  in  the 
popular  breast. 

Judge  Krum  suffered  a  serious  illness  shortly  after  the  close  of  the 
Lewis  trial.  This  necessitated  the  amputation  of  the  luxurious  side- 
whiskers  so  familiar  to  every  member  of  the  St.  Louis  bar.  A  local 
newspaper  remarked  facetiously  when  the  judge  was  first  seen  upon 
the  streets  after  recovering  from  his  illness,  that  Lewis  had  trimmed 
Krum's  whiskers  for  him.  The  great  prosecutor  has  never  forgotten 
nor  forgiven,  it  is  said,  his  utter  rout  at  the  hands  of  Lewis  on  that 
memorable  occasion.  Yet  he  has  retained  a  wliolesome  respect  for 
Lewis'  wit,  sagacity  and  acumen,  for  when  Lewis'  direct  examination 
came  to  a  close  at  his  second  trial,  Judge  Krum,  who  again  acted 
as  special  prosecutor  for  the  Government,  remarked  that  he  had 
no  questions  to  ask.  When  United  States  Attorney  Blodgett  then 
rose  to  cross-examine  the  witness,  Krum  audibly  remarked,  "Sit 
down,  you  fool."  With  the  exception  of  a  perfunctory  word  or 
two,  Lewis  was  excused  from  cross-examination.  The  tradition  of 
Krum's  defeat  on  this  occasion  still  lingers  in  legal  circles  in  St. 
Louis.  As  the  sequel  will  show,  United  States  District  Attorney 
Houts,  at  Lewis'  recent  trial,  likewise  showed  the  white  feather.  At 
the  close  of  the  defendant's  direct  examination,  he  dumbfounded  all 
present  by  remarking,  "We  have  no  questions  that  we  wish  to  ask." 
The  memory  of  Lewis'  personal  triumph  over  Krum,  has  given  rise 
to  a  settled  conviction  upon  the  part  of  many  St.  Louisans  that,  on 
a  thorough  direct  and  cross-examination,  Lewis  would  so  clearly  and 
convincingly  explain  to  any  jury  the  circumstances  surroimding  his 
various  undertakings  as  to  utterly  dissipate  the  notion  that  he  has 
ever  entertained  tlie  conscious  purpose  to  defraud. 

After  Judge  Krum  met  his  Waterloo  at  the  hands  of  Lewis  on 
Tuesday  morning,  the  trial  proceeded  rapidly  to  its  completion.  No 
further  effort  will  be  made  to  trace  the  sequence  of  events.  Space 
will  admit  only  of  a  brief  digest  of  the  testimony  of  the  principal 
witnesses.  Lewis,  as  a  witness  in  his  own  defense,  testified  fully 
to  the  state  of  facts  regarding  the  bank  and  his  other  enterprises 
with  which  the  reader  is  already  familiar.    The  length  of  the  cross- 


THE  DREYFUS  CASE  OF  AMERICA  721 

examination  by  Judge  Krum  precludes  the  possibility  of  a  full  di- 
gest. Copies  of  the  inspectors'  reports,  the  affidavits  of  Lewis  and 
Putnam,  and  other  memoranda  of  the  inspectors  and  all  of  the  offi- 
cial correspondence  and  documents  denied  to  Congress  by  the  post- 
master-general, were  in  the  possession  of  the  cross-examiner.  Every 
controversial  point  was  minutely  searched  by  the  great  prosecutor. 
From  an  attitude  of  contemptuous  indifference  to  what  he  charac- 
terized as  the  witness'  self-serving  declarations,  Krum  passed  rapidly 
through  various  stages  of  annoyance  and  irritation,  to  white-hot 
anger.  As  Krum  grew  heated,  Lewis  became  cool.  The  duel  was 
thus  fought  out  upon  somewhat  more  even  terms  than  is  usual  in 
such  cases.  A  defendant  witness  is  most  often  wholly  at  the  mercy 
of  a  prosecuting  cross-examiner.  But  a  close  study  of  the  transcript 
of  the  evidence  confirms  the  impressions  of  newspaper  men  that  at 
no  time  was  Le.M'is  disconcerted. 

KRUM  INVOKES  COURT's  PROTECTION. 

A  few  excerpts  from  the  official  record  will  serve  to  illustrate  the 
sparks  of  wit  with  which  the  solemn  atmosphere  of  the  court  room 
was  enlivened  as  steel  crossed  steel  in  verbal  sword-play.  Lewis,  in 
his  direct  testimony,  had  referred  to  the  attempt  of  the  Governor* 
of  Wyoming  in  World's  Fair  days,  to  get  the  prize  of  one  hundred 
dollars  offered  to  any  one  who  could  mention  a  postoffice  in  the 
United  States  where  he  did  not  have  a  subscriber  to  the  Woman's 
Magazine.  To  break  the  force  of  this  effective  episode  upon  the 
minds  of  the  jury,  Judge  Krum  essayed  to  bring  this  incident  into 
contempt.     Came  here  the  following  passage  at  arms: 

Of  course,  that  man  mentioned  as  governor,  whatever  his  name,  was 
out  there? 

You  mean  the  Governor  of  Wyoming? 

Yes,  you  got  it  right.     Where  was  that? 

That  was  a  woman. 

AVhere  was  she  located? 

In  some  little  mining  station  in  Wyoming. 

Of  course  she  understood  this  plan  of  yours? 

I  do  not  think  she  was  a  subscriber  to  the  bank  stock.  She  was  just  a 
subscriber  to  our  little  ten-cent   magazine. 

Of  course  the  baby  here  in  court  understood  it? 

Who? 


*The  following  letter  from  ex-Governor  Chatterton  of  Wyoming,  under  date  of 
March  22,  1912,  in  response  to  inquiry  of  counsel  for  Lewis  on  the  occasion  of  his 
recent  trial  (1912)  is  of  interest  as  corroborative  of  this  incident.  Mr.  Chatterton 
says:  "I  remember  the  incident  very  well.  The  published  account  you  enclosed  is 
correct.  There  were  quite  a  number  of  Wyoming  people  in  the  party,  including  the 
gentleman  who  succeeded  me  as  Governor,  B.  B.  Brooks  of  Casper,  Wyo.  T.  T. 
Tynan,  who  was  at  that  time  superintendent  of  public  instruction,  from  Sheridan, 
Wyo., 'asked  some  of  the  questions.  The  staff  officers  were:  Colonel  George  Sliney, 
Thermopolis;  C.  L.  Hinkel,  Cheyenne;  General  F.  A.  Stitzer,  Laramie;  Colonel 
Patrick  Sullivan,  Casper,  all  of  Wyoming. 

"Mr.  Lewis  stated  the  offer  of  $100,  and  after  naming  several  small  offices,  each 
of  which  had  one  or  more  subscribers,  either  Mr.  Tynan  or  myself,  as  a  joke,  named 
a  cross-roads  office.  No  one  but  the  storekeeper  and  family  lived  there.  When  a 
subscriber  was  found  there,  we  gave  up  trying  to  win  the  $100.  I  have  forgotten 
the  name  of  the  office  and  subscriber,  but  I  think  Mr.  Tynan  may  recall  them.  My 
recollection  is  that  it  was  in  either  Sheridan  or  Big  Horn  county.  I  was  much 
interested  in  Mr.  Lewis'  achievements,  and  talked  with  Judge  Rjner  about  him  just 
after  his  trial  some  two  years  ago.     I  trust  that  he  will  win  out." 


722  THE  SIEGE  OF  UNIVERSITY  CITY 

Didn't  you  recognize  the  baby  as  one  of  your  subscri})ers? 

You  mean  the  child  which  one  of  the  hidies  brought  here? 

No,  the  oflspring  of  one  of  the  ladies? 

Well,  Judge,  I  remember  that  one  was  put  forward  as  the  youngest 
subscriber,  but  there  was  one  younger  than  that.  The  oldest  banker  in  the 
state  of  Texas  subscribed  for  five  hundred  dollars  for  his  unborn  grand- 
child, beating  the  other  one  four  months. 

That  one  understood  it  perfectly? 

Of  course. 

In  course  of  cross-examination  toucliing  the  certified  check  system 
the  big  prosecutor  first  had  occasion  to  invoke  the  protection  of 
the  court.  Tliis  first  blood  for  the  defense  was  drawn  near  the 
end  of  a  lively  cut-and-thrust  over  the  propriety  of  the  certified 
check  system.  In  this  the  witness,  being  on  his  own  ground,  had 
enjoyed  a  decided  advantage.     The  touch  occurred  thus: 

This  scheme  of  certified  checks  looked  to  you  as  a  first-class  proposition 
for  your  bank,  did  it? 

Yes,  it  did  after  I  had  consulted  a  number  of  the  leading  bankers  of 
America  and  found  that  it  looked  pretty  good  to  them. 

Didn't  it  occur  to  you  that  your  bank  couldn't  be  held  on  that  check  at 
wll?    That  it  was  issued  without  authority? 

Judge,  you're  foolish. 

Mr.  Krum:  Your  Honor,  I  respectfully  represent  to  you — not  to  this 
party  here — that  no  witness  is  at  liberty  to  address  me  or  any  one  else  in 
that  manner. 

The  Court:  The  witness  will  not  make  any  reflection  on  counsel,  or 
counsel  on  the  witness. 

The  Witness:  That  wasn't  intended  as  a  reflection.  The  People's 
United  States  Bank  was  responsible  for  that  check  to  the  full  limit  of  its 
capital  and  assets,  just  the  same  as  the  certified  checks  that  are  being  issued 
by  every  bank  in  St.  Louis.    Take  any  of  them  today,  they  are  all  doing  it. 

Did  it  ever  enter  into  your  calculations  that  upon  no  legal  hypothesis 
could  there  be  any  responsibility  on  account  of  those  checks? 

Judge,  you  are  the  only  one  who  ever  discovered  that. 

That  never  was  discovered  by  your  two-dollar  legal  department? 

No,  nor  by  any  of  the  other  banks  of  America. 

Just  here  came  the  dramatic  climax  of  the  trial  when  the  wit- 
ness, provoked  beyond  endurance  by  the  bullying  and  contemptuous 
baiting  of  counsel,  tui'ned  upon  his  interrogator,  stepped  down 
from  the  witness  stand,  and  denounced  his  prosecutor  in  open  court. 
This  is  the  language  of  the  official  stenographic  record: 

Now  you  represented:  "I,  who  might  arrange  the  matter  personally  so 
as  to  take  and  pay  for  one  million  dollars  of  the  stock  myself  and  who  could 
be  its  president,  cannot  lend  myself  a  single  dollar  of  the  bank's  funds." 
In  the  face  of  that  representation  I  understand  yo\i  that  you  went  on  and 
made  loans  to  yourself  in  view  of  what  you  had  become  satisfied  was  a 
conspiracy  against  the  concern? 

Well,  the  real  estate  loan  wasn't  made  on  that  basis.  That  was  alto- 
gether a  business  transaction  by  which  the  bank  would  profit  to  the  ex- 
tent of  fifty  thousand  dollars. 

I  am  not  talking  about  that  loan.  I  am  talking  about  the  loans  aggre- 
gating eight  hundred  and   forty-four  thousand  dollars. 

That  is  one-half  of  it. 

I  am  talking  about  these  two  loans,  one  of  four  hundred  thousand  and 
one  of  four  hundred  and  forty-four  thousand  dollars. 

That  is  one  of  them. 

You  say  that  these  loans  were  made  because  of  this  conspiracy? 


THE  DREYFUS  CASE  OF  AMERICA  723 

No,  I  didn't.  I  said  the  last  property  loan  was  consummated  as  quickly 
as  it  was  and  in  the  way  in  wliicn  it  was  done  because,  for  reasons  satisfac- 
tory to  me,  1  knew  what  you  were  up  to. 

What  do  you  mean? 

The  bank  would  not  have  paid  the  stockliolders  two  cents  on  the  dollar 
if  you  had  had  your  way.  Twelve  thousand  dollars  went  at  one  time  in  the 
hands  of  one  of  your  men.  He  came  in  tlirough  the  coal  hole  and  went  out 
through  the  window.  We  caught  him  and  got  the  money  away  from  him, 
and  then  you  jumped  another  in  right  on  top  of  him. 

Whom  are  you  referring  to? 

Whom  j'ou  represent. 

Here  Lewis  stepped  down  from  the  stand  and  shook  his  finger  in 
Krum's  face. 

This  is  the  first  time  we  have  had  this  out  in  a  court  with  twelve  men 
and  a  judge.  You  have  been  having  your  star  chamber  proceedings  for  two 
years.     Now  you  stand  out  in  the  daylight  where  we  can  get  a  look  at  you. 

Mr.  Krum:     I  presume  this  is  satisfactory  to  you,  Judge? 

The  Court:  Well,  you  are  conducting  tlie  examination.  You  told  him 
to  go  on. 

The  Witness:  No  stockholder  or  depositor  has  ever  had  a  complaint 
against  this  bank.  You  cannot  bring  one  here  today  who  has  ever  made  a 
complaint.     Now,  who  is  behind  all  this? 

Mr.  Krum;     Let's  get  back  to  the  proposition. 
Mr.  Lewis:     We  are  getting  to  it  now. 

THE    CASE    FOR   THE    DEFENSE. 

The  testimony  introduced  by  the  defense,  in  addition  to  that  of 
Lewis,  was  directed  chiefly  to  establish  three  points.  The  witnesses 
according^  were  of  three  classes,  bankers,  publishers,  and  real  es- 
tate men.  The  first  point  of  the  defense  was  to  show  the  extent  of 
Lewis'  private  fortune  as  the  chief  owner  of  the  Lewis  Pub- 
lishing Company  and  the  University  Heights  company.  This 
bore  upon  his  ability  to  subscribe  and  pay  for  a  million  dollars' 
worth  of  the  stock  of  the  bank.  The  second  point  was  the  value 
of  the  real  property  of  the  Lewis  Publishing  Company  and  the 
University  Heights  company,  pledged  as  security  for  the  loans  of 
those  concerns  from  the  bank.  The  third  point  related  to  Lewis' 
good  faith  in  the  organization  of  the  People's  Bank,  and  touched 
upon  the  feasibility  of  his  plans  for  the  bank  itself. 

VALUE   OF  THE  WOM.-iN's  MAGAZINE  AND  FARM  JOURNAL. 

Additional  testimony  to  the  same  effect  was  introduced  at  Lewis' 
second  trial.  For  the  sake  of  perspicuity,  the  testimony  presented 
at  both  trials  will  be  briefly  summarized  at  this  point.  The  witnesses 
introduced  to  establish  the  value  of  the  magazine  property  at  the 
first  trial  were  H.  E.  Lesan  who,  it  will  be  remembered,  had  recently 
conducted  negotiations  looking  to  the  reorganization  of  the  Lewis 
Publishing  Company  under  the  leadership  of  former  Governor 
Francis;  Conrad  Budke,  of  the  Nelson  Chesman  Advertising 
Agency,  by  whom  Lewis  had  formerly  been  employed,  and  William 
C.  Hunter,  a  brother  publisher.  The  witnesses  introduced  for  this 
purpose  at  the  second  trial  were  former  Congressman  Nathan  Frank, 
owner  of  the  St.  Loiiis  Star;  C.  R.  Irwin,  president  of  Lord  & 
Thomas,  one  of  the  foremost  advertising  agencies  of  the  United 


724  THE  SIEGE  OF  UNIVERSITY  CITY 

States,  and  Charles  W.  Knapp,  publisher  of  the  St.  Louis  Republic. 
The  evidence  given  by  these  "witnesses  will  be  digested  briefly.  Mr. 
Lesan  said: 

TESTIMONY  OF  lIAHttY  LESAN. 

I  am  associated  with  the  Lesan-Gould  Company  in  the  advertising  and 
printing  and  publishing  business.  I  have  been  personall}'  engaged  in  that 
business  about  fifteen  years.  I  have  become  familiar  with  the  values  of 
newspaper  and  magazine  properties  and  those  of  a  literary  character  gener- 
ally. We  have  placed  advertisements  for  various  clients  in  the  Woman's 
Magazine  as  advertising  agents.  In  that  capacity  we  stand  in  very  much 
the  relation  of  an  attorney  to  his  client.  We  advise  our  clients  what  me- 
diums to  employ  and  what  amount  of  advertising  to  place  in  each.  We 
give  general  advice  on  all  advertising  subjects.  The  Woman's  Magazine, 
as  of  January,  1905,  was  considered  one  of  the  best  mediums  in  the  coun- 
try for  mail  order  advertising.  Its  advertising  rate  was  then  six  dollars 
a  line.  It  was  very  extensively  patronized  by  advertisers.  Its  price  was 
much  less  than  other  magazines  published  for  the  same  purpose,  but  I  con- 
sidered it  a  very  remarkable  paper  from  a  literary  standpoint  for  the  price. 

The  monetary  value  of  a  publication  is  usually  determined  either  by 
its  circulation  or  its  profit-earning  power.  Assuming  that  the  Woman's 
Magazine  had  a  circulation  throughout  the  United  States  of  one  and  a  half 
million  copies  (and  it  had)  and  considering  the  character  of  its  advertising, 
with  which  I  am  personally  acquainted,  I  should  say  the  good-will  of  the 
property,  exclusive  of  its  tangible  assets,  was  worth  from  one  million  to  one 
and  a  half  million  dollars.  I  am  also  acquainted  with  the  Woman's  Farm 
Journal.  Assuming  a  circulation  of  six  himdred  thousand  copies,  I  should 
say  from  my  knowledge  of  its  character  that  its  value  was  not  more  than 
two  hundred  thousand  dollars.  The  advertising  rate  for  that  paper  was 
lower,  only  two  or  three  dollars  a  line. 

TESTIMONY  OF  CONRAD  BUDKE. 

Mr.  Conrad  Budke  testified  as  follows:  I  am  president  of  the  Nelson 
Chesman  Company,  newspaper  and  magazine  advertising  agents.  I  have 
been  in  that  business  thirty-two  years.  Our  present  business  covers  this 
entire  country.  We  also  do  some  business  in  Canada  and  in  England.  Our 
chief  office  is  in  St.  Louis.  AVe  handle  newspaper  and  magazine  advertis- 
ing for  numerous  clients,  much  in  the  same  relation  as  that  sustained  by  an 
attorney.  The  business  requires  a  pretty  complete  knowledge  of  the  value 
of  publications.  Our  service  consists  in  the  selection  of  the  best  mediums 
for  our  clients. 

I  have  been  acquainted  with  the  Woman's  Magazine  ever  since  its 
birth.  I  was  one  of  the  original  subscribers  to  the  preferred  stock  of  the 
Lewis  Publishing  Company,  and  am  still  a  stockholder.  The  market  value 
of  the  Woman's  Magazine  during  the  years  1904  and  1905,  on  a  circulation 
of  one  and  a  half  million  copies  of  each  month's  issue,  was  from  one  and 
a  quarter  to  two  million  dollars,  in  my  opinion.  That  sum  is  irrespective 
of  its  tangible  assets.  I  was  equally  acquainted  with  the  Woman's  Farm 
Journal  during  the  same  period.  I  would  estimate  its  reasonable  value  as 
a  publication,  irrespective  of  its  tangible  assets,  as  from  three  hundred 
thousand  to  four  hundred  thousand  dollars.  The  advertising  rate  of  the 
magazine  was  six  dollars  a  line;  of  the  Farm  Journal  two  dollars.  Their 
patronage  was  very  extensive. 

In  cross-examination  by  ]\Ir.  Krum,  this  colloquy  took  place: 

Your  valuation  is  based  upon  an  assumed  circulation  of  the  Woman's 
Magazine  of  one  and  a  half  million  copies? 

,  No,  it  is  rather  from  the  reports  that  we  got  from  advertisers  as  to  the 
returns   from   the   Magazine. 

Doesn't  the  circulation  have  anything  to  do  with  it? 

Yes.  That  was  a  potent  factor.  It  was  the  extent  of  the  circulation  that 
brought  the  big  returns. 


THE  DREYFUS  CASE  OF  AMERICA  725 

If  in  point  of  fact  the  genuine  circulation  of  the  Woman's  Magazine  was 
only  about  four  hundred  thousand  copies,  and  the  balance  claimed  was 
bogus,  would  that  fact  have  a  material  influence  in  reducing  your  estimated 
value  of  the  property? 

Bogus?    Do  vou  mean  free  circulation — unpaid? 

Yes. 

AVell,  we  would  consider  that  as  valuable  as  the  paid  circulation. 

TESTIMONY    OF    COLONEL    HUNTER. 

William  C.  Hunter,  on  direct  examination  by  Mr.  Fauntleroy  said:  I  am 
a  publisher  and  ranchman.  I  live  in  Chicago  and  Idaho.  I  have  made  my 
home  in  Chicago  since  1881.  Until  quite  recently  I  have  been  interested 
as  stockholder  and  officer  in  eight  or  nine  publications.  They  are  The  Satur- 
day Blade,  The  Chicago  Ledger,  The  Woman's  World,  Home  Folks,  House- 
hold Guests,  and  a  pure  food  publication,  all  of  Chicago.  My  experience 
in  publications  has  been  through  each  successive  step  from  printer's  devil 
to  proprietor.  I  have  bought  several  publications.  Usually  I  have  bought 
them  below  their  supposed  value.  I  know  their  general  worth  and  the  gen- 
eral basis  on  which  the  price  is  ascertained.  I  believe  from  my  experience 
in  newspaper  lines  I  can  form  an  opinion  of  the  value  of  any  paper  of  a 
given  circulation.  I  may  say  that  it  is  largely  the  good-will  and  the  sub- 
scription list  upon  which  we  fix  the  value  in  buying  a  publication.  I  have 
known  the  Woman's  Magazine  since  its  inception.  I  have  known  the  Woman's 
Farm  Journal  about  ten  years.  I  knew  it  before  Mr.  Lewis  owned  it.  In 
my  opinion  the  Woman's  Magazine,  with  a  circulation  of  one  and  a  half 
million  throughout  the  United  States,  would  be  worth  about  seventy-five 
cents  to  one  dollar  for  each  subscriber.  In  round  figures,  that  would  be 
one  million  to  a  million  and  a  quarter  dollars,  or  somewhere  in  there.  The 
Farm  Journal,  with  a  circulation  of  six  hundred  thousand  would  be  worth 
around  half  a  million. 

TESTIMONY  OF  C.   R.   IRWIN. 

At  the  second  trial,  C.  R.  Irwin  testified  as  follows:  I  am  the  president 
of  Lord  &  Thomas,  newspaper  advertisers  and  magazine  advertising  agency 
of  Chicago.  I  live  in  that  city.  We  do  between  three  and  four  million 
dollars'  worth  of  business  a  year.  We  deal,  in  our  business,  with  all  the 
different  classes  of  publications  in  the  United  States,  daily  papers,  maga- 
zines, agricultural  papers,  religious  papers  and  mail  order  periodicals  gen- 
erally.   The  Woman's  Magazine  is  among  these  publications. 

I  have  known  Mr.  Lewis  for  the  last  twenty  years.  I  have  made  special 
inquiry  about  the  Woman's  Magazine  as  a  publication.  Most  of  the  ad- 
vertisements in  it  were  keyed.  The  object  of  this  is  to  learn  whether  ad- 
vertising in  a  publication  is  profitable  or  not.  Our  clients  send  us  reports 
showing  the  number  of  replies  received  to  each  advertisement,  the  amount 
of  goods  sold,  and  the  money  that  comes  in.  We  then  tabulate  these  re- 
ports. This  gives  us  a  basis  on  which  to  judge  the  value  of  the  different 
publications.  We  have  kept  a  copy  of  those  returns  for  a  period  of  many 
years.  The  Woman's  Magazine  stands  at  the  head  of  the  list.  That  is 
the  actual  experience  from  the  records  of  our  office.  It  was  one  of  the 
best  mediums  in  the  country  to  reach  the  farmer  and  the  inhabitants  of 
small  towns. 

I  remember  the  publisher  of  the  Woman's  Magazine  commenced  back  in 
1903  to  investigate  the  character  of  the  advertisements  carried.  I  am  fa- 
miliar with  their  restrictions  against  advertising  of  a  questionable  charac- 
ter. That  policy  greatly  increased  the  value  of  the  publication  as  a  me- 
dium for  legitimate  advertising.  Many  of  the  advertisements  excluded  by 
the  Woman's  Magazine  in  1905  are  accepted  in  the  daily  newspapers.  I 
recall  that  Mr.  Lewis  once  declined  an  offer  from  us  amountine  to  about 
eighteen  thousand  dollars,  because  his  rule  was  to  sell  at  one  time  not  more 
than  one  page  to  any  advertiser.  This  advertisement  contemplated  several 
pages  in  one  issue.  He  thought  it  would  be  a  detriment  to  the  other  ad- 
vertisers. His  rate  at  that  time  was  six  dollars  a  line.  We  have  paid  the 
Woman's  Magazine  as  high  as  sixty-five  thousand  dollars  a  year. 


726  THE  SIEGE  OF  UNIVERSITY  CITY 

My  judgment  is  that  the  Woman's  Magazine  on  the  first  of  March,  1905, 
entirely  irrespective  of  its  physical  assets,  was  worth  at  least  one  and  a 
half  million  dollars — perhaps  more.  I  would  consider  the  Woman's  Farm 
Journal  at  that  time  worth  two  hundred  thousand  dollars. 

TESTIMOXT  OF  CHARLES  W.    KNAPP. 

Charles  W.  Knapp  testified  at  the  second  trial  as  follows:  I  am  a 
resident  of  St.  Louis,  and  am  the  editor  of  the  St.  Louis  Republic  and  presi- 
dent of  the  corporation  owning  and  publishing  that  newspaper.  I  hate  to 
tell  you  how  long  I  have  been  in  the  newspaper  business.  It  is  now  very 
close  to  half  a  century.  Over  forty  years.  I  have  been  actually  engaged 
in  newspaper  work  in  various  lines  in  both  the  editorial  and  business  de- 
partments, and  in  managerial  capacity  for  forty-one  years.  I  have  been 
intimately  associated  with  editors,  publishers  and  managers  of  newspapers. 
I  suppose  I  have  as  much  general  information  on  that  subject  as  any  one 
person  would  be  likely  to  have.  I  have  been  a  member  of  the  board  of 
directors  and  of  the  executive  committee  of  the  Associated  Press  under 
various  organizations  bearing  the  same  name  for  a  period  of  eighteen 
years.  I  was  at  one  time  the  president  of  that  organization  as  it  was  then 
incorporated  under  the  laws  of  Illinois.  I  was  also  for  a  term  of  years 
president  of  a  national  organization  which  comprises  the  important  daily 
newspapers  of  the  country.  I  am  a  member  of  the  Associated  Press  and 
of  another  organization  known  as  the  American  Newspaper  Publishers* 
Association.  I  am  today,  and  have  been  for  many  years,  a  member  of  the 
executive  committee  of  that  organization.  I  have  necessarily,  in  my  con- 
nection, been  brought  in  frequent  communication  with  managers  of  news- 
papers in  all  portions  of  the  country. 

I  had  a  general  knowledge  of  the  Woman's  Magazine  in  1904  and  1905. 
This  knowledge  was  gathered  by  some  careful  observation  of  the  publica- 
tion itself  by  reason  of  the  competition  which  there  necessarily  was  between 
it  and  publications  conducted  by  the  corporation  of  which  I  was  the 
managing  head.  The  impressions  that  I  gathered  suggested  to  me  that  it 
was  worth  over  a  million  dollars,  outside  of  any  physical  property. 

VALUE    OF   THE    UNIVERSITY    HEIGHTS    PROPERTY. 

Touching  the  values  of  the  real  property  of  the  University 
Heights  and  the  Lewis  Publishing  companies,  the  following  real  es- 
tate experts  were  examined  at  the  first  trial:  W.  J.  Holbrook, 
Henry  L.  Cornet  and  A.  O.  Rule.  Messrs.  Holbrook  and  Rule  were 
re-examined  at  the  second  trial,  at  which  time  Nathan  Frank  and 
James  W.  Black  were  also  called  to  the  witness  stand.  At  the  first 
trial  Mr.  Holbrook  said: 

I  am  president  of  the  Holbrook-Blackwelder  Real  Estate  Trust  Com- 
pany. I  have  been  engaged  in  the  real  estate  business  in  the  vicinity  of 
St.  Louis  for  fifteen  years.  I  am  acquainted  with  the  value  of  real  estate 
in  St.  Louis  county.  I  have  been  especially  acquainted  with  the  values  in 
what  is  generally  known  as  the  University  Heights  tract  in  University  City. 
I  was  well  acquainted  with  those  values  in  1904  and  1905.  My  concern 
sold  about  four  hundred  thousand  dollars'  worth  of  that  property  in  the 
fall  of  1905.  The  values  ranged  from  thirty-five  to  sixty-five  dollars  a 
front  foot.  We  made  a  large  number  of  sales  at  different  prices.  The 
values  in  Section  Two  ranged  from  forty  to  seventy-five  dollars  a  front  foot. 
Section  Three  was  unimproved  property,  but  well  worth  six  thousand  dollars 
an  acre.  I  would  estimate  the  entire  tract,  including  sections  one  and  two, 
taking  in  the  sold  as  well  as  the  unsold  portion,  at  about  one  million,  four 
hundred  thousand  dollars.  The  portions  sold  brought  four  hundred  thou- 
sand dollars.  There  were  left  thirty-two  thousand  front  feet,  which  I  esti- 
mated as  worth  one  million  dollars. 

Henry  L.  Cornet  testified  to  having  been  a  real  estate  agent  in 
St.   Louis   and   vicinity   in   the   neighborhood  of   twenty-five   years. 


THE  DREYFUS  CASE  OF  AMERICA  727 

He  stated  that  he  had  handled  a  number  of  estates  in  University 
City,  and  was  familiar  with  the  original  University  Heights  tract 
of  eighty  acres.  "I  should  consider  that  tract  worth,  in  1905," 
he  said,  "in  the  neighborhood  of  thirty  to  sixty-five  dollars  a  front 
foot.  Reckoning  two  hundred  front  feet  to  the  acre,  at  Mr.  Cor- 
net's acreage  estimate,  the  total  value  would  amount  to  approxi- 
mately one  million  dollars.  This  was  the  estimated  value  of  the 
original  tract  purchased  by  Lewis  in  1903  for  two  hundred  thousand 
dollars. 

A.  O.  Rule,  at  the  first  trial,  testified  to  nineteen  years'  experi- 
ence in  general  real  estate  as  buyer  and  seller.  As  a  member  of 
the  firm  of  Kilgen  &  Rule  he  had  handled  the  Parkview  property. 
He  estimated  the  value  of  the  original  University  Heights  subdi- 
vision in  1905  at  forty  to  forty-five  dollars,  that  is  in  round  figures, 
seven  hundred  thousand  to  eight  hundred  thousand  dollars.  He 
estimated  the  entire  University  Heights  tract  north  of  Delmar  ave- 
nue at  one  million  dollars. 

At  the  second  trial,  Nathan  Frank,  who  as  trustee  for  the*  Metro- 
politan Life  Insurance  Company,  had  advanced  four  hundred  thou- 
sand dollars  upon  the  unsold  portion  of  the  University  Heights  tract 
a  few  months  previously,  stated  that  he  had  made  an  inspection  and 
placed  a  valuation  on  Sections  One,  Two  and  Three.  He  estimated 
the  value  of  twenty-three  thousand  front  feet  at  something  near  a 
million  dollars,  or  at  the  rate  of  approximately  forty-five  dollars  a 
front  foot. 

James  W.  Black  testified,  at  the  second  trial,  to  having  been  the 
contractor  and  builder  who  erected  the  Woman's  Magazine  Build- 
ing. The  construction,  without  embellishments  and  ornamentation, 
cost,  he  stated,  a  quarter  of  a  million  dollars.  Mr.  Black  stated 
that  the  building  was  erected  under  Lewis'  direction,  and  all  obliga- 
tions connected  with  it  were  promptly  discharged.  There  were  no 
liens  of  any  kind  upon  the  building,  to  his  knowledge. 

VALUE  OF  THE  PEOPLe's  BANK. 

Touching  the  third  point  of  the  defense,  the  organization  of  the 
People's  Bank  itself,  Messrs.  Stilwell  and  Dickinson  were  examined 
at  the  first  trial.  James  B.  Wilbur  and  former  Governors  Steph- 
ens and  Francis  were  examined  at  the  second  trial.  Mr.  Stilwell 
stated  that  he  was  engaged  in  building  the  Kansas  City,  Mexico  & 
Orient  Railway,  of  which  company  he  was  president,  from  Kansas 
City  to  Tehuantepec,  Mexico,  1,659  miles.  The  witness  stated  that 
he  was  also  president  of  the  Guardian  Trust  Company  and  the 
Mexican  Trust  Company.  He  was  making  a  study  of  banking  mat- 
ters, and  had  published  an  article  on  the  subject.  Mr.  Stilwell 
stated  that  he  had  read  Mr.  Lewis'  first  article,  on  banking  by  mail, 
in  the  Woman's  Magazine,  with  great  interest.  He  afterwards  had 
a  long  talk  with  Lewis  on  the  subject,  and  read  every  article  that 
the  latter  had  ever  written.  He  had  talked  with  Lewis  four  or  five 
different  times,  half  a  day  at  a  time,  before  the  organization  of  the 


728  THE  SIEGE  OF  UNIVERSITY  CITY 

bank.  He  had  expressed  the  wish  to  subscribe  for  a  good  block  of 
the  stock,  but  had  been  limited  by  Lewis  to  a  subscription  of  five 
hundred  dollars,  which  was  the  limit.  He  had  promised  Lewis  to 
serve  as  a  member  of  his  permanent  board  of  directors. 

Mr.  Dickinson,  vice-president  of  the  same  railroad,  testified  that 
he  was  formerly  general  manager  of  the  Union  Pacific  Railway, 
having  been  connected  with  that  company  altogether  about  thirty- 
three  years.  He  had  first  learned  of  the  People's  Bank  while  visit- 
ing the  plant  of  the  Lewis  Publishing  Company  with  a  party  of 
friends  from  Omaha.  Mr.  Dickinson  later  became  one  of  the  orig- 
inal incorporators.  He  M'as  asked  by  Lewis  to  serve  as  a  member 
of  the  permanent  board  of  directors,  and  had  promised  to  do  so. 
He  subscribed  to  the  stock  of  the  bank  to  the  limit  of  five  hundred 
dollars  for  each  member  of  his  family,  a  total  of  twenty-five  hundred 
dollars. 

James  B.  Wilbur,  of  Chicago,  stated,  at  the  second  trial,  that  he 
had  been  president  of  the  Royal  Trust  Company  of  Chicago  for 
the  last  twelve  years.  The  combined  capital  stock  and  surplus  of 
that  institutiin  was  something  over  a  million  dollars.  Mr.  Wilbur 
stated  that  both  himself  and  the  vice-president  of  the  trust  com- 
pany had  subscribed  to  the  stock  of  the  bank  to  the  limit  of  five 
hundred  dollars,  and  that  he  had  expressed  the  wish  to  make  a 
larger  subscription,  if  allowed  to  do  so.  He  stated  that  the  Royal 
Trust  Company  had  loaned  Mr.  Lewis  one  hundred  thousand  dollars, 
and  that  it  had  advanced  the  Lewis  Publishing  Company  as  high  as 
fifty  thousand  dollars.  The  witness  testified  that  the  paying  banks 
associated  with  the  People's  United  States  Bank  in  its  certified 
check  system  were  among  the  best  in  the  United  States. 

Former  Governor  Lon  V.  Stephens  stated,  at  the  second  trial,  that 
he  had  occupied  the  position  of  governor  of  Missouri  for  four  years 
and  also  that  of  state  treasurer  for  seven  years.  He  had  formerly 
been  vice-president  of  the  Second  Central  National  Bank  of  Boon- 
ville.  Mo.,  and  president  of  the  Central  Missouri  Trust  Company 
at  Jefferson  City,  Mo.  Governor  Stephens  stated  that  he  had  be- 
come a  director  of  the  People's  Bank  at  the  time  the  secretary  of 
state  demanded  a  reorganization,  and  then  became  familiar  with  its 
operations.  The  witness  testified  that  in  his  opinion  the  franchise 
and  good-will  of  the  People's  Bank  prior  to  the  issuance  of  the  fraud 
order  was  worth  up  into  the  millions  of  dollars. 

Former  Governor  David  R.  Francis,  at  the  second  trial,  stated 
that  he  had  served  as  mayor  of  St.  Louis  from  1885  to  1889,  and  as 
governor  of  Missouri  from  1889  to  1893.  He  had  also  acted  as 
secretary  of  the  interior  in  President  Cleveland's  Cabinet  for  about 
six  months.  Later,  he  had  served  as  president  of  the  Louisiana 
Purchase  Exposition  Company.  He  was  vice-president  and  director 
of  the  Merohants-Laolede  National  Bank,  and  director  of  the  Missis- 
sippi Valley  Trust  Company.  Governor  Francis  testified  in  sub- 
stance as  follows: 


THE  DREYFUS  CASE  OF  AMERICA  729 

Mr.  Lewis  asked  me  to  become  a  member  of  his  advisorj  board.  I  told 
him  I  was  otherwise  occupied,  and  that  I  had  banicing  interests  which  might 
conflict  with  his  bank,  so  that  I  couldn't  think  of  doing  so.  I  stated  to  hira 
that  I  thought  tiie  bank  plan  was  good,  but  that  it  would  be  impossible 
for  him  to  put  it  into  practice,  on  account  of  interfering  with  other  inter- 
ests. I  thouglit  I  was  familiar  with  Mr.  Lewis'  general  reputation  for  hon- 
esty and  integrity  in  the  city  of  St.  Louis  during  the  year  1904.  I  was 
very  busy  and  didn't  have  much  time  to  talk  about  the  character  of  the 
people  in  St.  Louis,  but  the  impressions  I  had  of  his  character  were  that 
it  was  good.  I  was  not  doing  much  commercial  business  at  the  time.  I 
was  on  the  fair  grounds,  and  wasn't  down  in  commercial  circles.  But  I 
must  have  heard  Mr.  Lewis'  character  discussed  from  time  to  time.  So  far 
as  I  know  it  was  good. 

THK  MISTRIAL  AND  ITS  EFFECTS. 

The  defense  sprung  a  surprise,  according  to  the  St.  Louis  Times 
of  Wednesday,  November  20,  by  resting  its  ease  at  10:25  a.  m.,  after 
having  called  but  one  witness  at  the  morning's  session.  Judge  Bar- 
clay, of  Lewis'  counsel,  when  asked  why  no  more  witnesses  were 
called,  replied:  "Because  we  think  beyond  a  doubt  we  have  made 
our  case."  "The  consensus  of  opinion  of  those  who  had  followed 
the  examination  and  cross-examination  of  Lewis,"  said  the  Times, 
"was  that  the  defense  for  the  banker-publisher  had  been  mate- 
rially strengthened  by  his  own  testimony.  Predictions  were  freely 
made  about  the  court  room  that  his  acquittal  was  sure  to  follow." 

Lewis  was  bitterly  denounced  by  District  Attorney  Blodgett,  who 
summed  up  the  case  of  the  Government  in  a  two  hours'  address  to 
the  jury. 

Blodgett  was  followed  by  Attorney  O'Brien  for  the  defense 
at  10  a.  m.  on  Thursday,  November  21.  So  great  was  the  throng 
in  attendance  that  the  court  room  door  was  locked  at  1 1  o'clock  to 
prevent  the  attempt  of  persons  in  the  hall  to  force  themselves  in. 
O'Brien,  in  turn,  was  followed  by  Judge  Shepard  Barclay,  senior 
counsel  for  Lewis,  who  closed  the  argument  for  the  defense  with  an 
address  lasting  over  an  hour.  Judge  Chester  H.  Krum,  special  coun- 
sel for  the  Government,  closed  the  argument  for  the  prosecution  at 
4:10  p.  m.  Judge  Carland  at  once  charged  the  jury  and  dis- 
missed them  to  their  deliberations. 

The  jury  was  still  out  when  the  evening  newspapers  of  Friday 
went  to  press  with  their  last  editions.  The  Saturday  morning  issues 
contained  the  news  that  after  being  out  twenty-two  hours,  they  had 
reported  their  inability  to  agree  and  had  been  discharged.  Accord- 
ing to  the  Republic  of  November  23,  the  jurjj^  stood  nine  to  three  for 
acquittal. 

THE    SECOND   TRIAL    OPENS. 

The  St.  Louis  Republic,  of  April  11,  contained  a  brief  item,  stat- 
ing that  John  A.  Riner,  United  States  district  judge,  of  Cheyenne, 
Wyo.,  had  been  assigned  to  preside  at  the  United  States  district  court 
in  St.  Louis,  beginning  May  5,  when  the  Lewis  case  would  be  taken 
up.  The  Republic  of  April  16  chronicled  a  conference  held  the 
preceding  day  by  former  Postoffice  Inspectors  Fulton  and  Stice, 
Truman  Post  Young,  assistant  district  attorney,  and  Judge  Krum,  in 


730  THE  SIEGE  OF  UNIVERSITY  CITY 

preparation  for  the  trial.  The  case  opened  promptly,  according  to 
the  St.  Louis  Times,  on  the  date  stated.  The  same  counsel  entered 
their  appearance  uj^on  both  sides.  A  feature  of  the  examination 
of  talesmen  was  the  inquiry  by  United  States  Attorney  Blodgett  in 
both  cases  as  to  whether  any  of  them  had  read  "The  United  States 
Government's  Shame,"  recently  issued  by  former  Third  Assistant 
Madden.  "A  number  of  copies  of  the  book,"  says  the  Post-Dispatch, 
"•vrere  in  the  court  room.  It  is  bound  in  brilliant  scarlet,  and  each 
copy  makes  a  little  spot  of  color  in  the  otherwise  dark  and  dreary 
setting  of  the  room.  The  book  is  a  defense  of  Lewis  and  a  tirade 
against  the  Postoffice  Department.  The  author,  it  is  said,  resigned 
because  of  the  methods  pursued  by  Postmaster-General  Cortelyou  in 
the  Lewis  case." 

Attorneys  for  Lewis  were  equally  careful  to  inquire  whether  any 
of  the  veniremen  were  personally  acquainted  with  Postmaster  Wy- 
man  or  other  Federal  officials,  or  if  an}'^  relatives  of  the  veniremen 
were  in  the  Government  employ.  The  two  trials  were  in  all  essen- 
tials similar.  For  the  most  part  tlie  same  witnesses  were  examined. 
"A  ripple  of  excitement,"  says  the  Post-Dispatch,  "was  caused  by 
the  arrival  of  tlie  youngest  stockholder  in  Lewis'  Bank,  the  cele- 
brated thirty  dollar  baby."  Tlie  chief  new  witness  for  the  Govern- 
ment was  former  Postoffice  Inspector  Fulton.  The  prosecution  un- 
expectedly rested  its  case  on  INIay  8,  the  fourth  day  of  the  trial. 
The  newspapers,  commenting  on  this,  drew  attention  to  the  fact 
that  the  Government  had  occupied  two  full  weeks  in  presenting  its 
case  at  the  earlj"-  trial,  and  noted  that  the  expediting  of  the  case 
was  due  to  the  attitude  of  Judge  Riner. 

The  drift  of  local  sentiment  favorable  to  Lewis  was  shown  by  the 
willingness  of  bankers  and  business  men  of  St.  Louis  to  take  the 
stand  in  his  behalf  at  the  second  trial.  The  defense  opened  on 
Saturday',  May  9,  and  closed  the  following  Wednesday  afternoon, 
May  13.  It  occupied  less  than  four  da3^s.  The  testimony  of  former 
Governor  David  R.  Francis,  August  Schlafly,  former  president  of 
the  Missouri-Lincoln  Trust  Company,  and  of  the  members  of  the  re- 
organized directorate  of  the  bank,  Messrs.  Stephens,  Carter  and 
Coyle,  Avas  said  by  the  press  to  have  been  very  favorable  to  the  de- 
fense. Dan  Lewis,  the  banker  of  Carlisle,  Ark.,  who  averred  that  he 
had  been  threatened  with  a  fraud  order  by  Postoffice  Inspector  W. 
L.  Jleid,  for  having  written  letters  to  members  of  Congress  in  Lewis' 
behalf,  was  present  as  a  witness.  He  testified  that  it  was  his  pur- 
pose to  buy  ten  thousand  dollars'  worth  of  stock,  but  found  that 
five  hundred  dollars  wis  the  limit  for  one  person.  "I  found  I  had 
only  one  wife  and  five  children  and  subscribed  the  full  amount  al- 
lowed for  them  and  ra3-self,"  he  said. 

The  defendant  was  placed  upon  the  stand  Wednesday  morning, 
May  13.  He  was  advised  bj^  the  court  that  it  was  optional  with 
him  whether  he  was  sworn  or  not,  an  oath  not  being  required  of  a 
defendant  on  a  criminal  case  in  the  Federal  courts.     Lewis  was 


THE  DREYFUS  CASE  OF  AMERICxV  731 

sworn,  at  his  own  request.  His  testimony  was  in  substance  the  same 
as  that  given  at  the  former  trial.  Surprise  was  manifested,  says 
the  Globe-Democrat  of  May  14,  when  the  Government  allowed  Lewis 
to  leave  the  stand  after  a  very  brief  cross-examination,  which 
brought  out  nothing  of  importance.  The  fact  was  recalled  that  the 
cross-examination  of  tlie  defendant  in  the  previous  trial  was  re- 
garded as  having  greatly  strengthened  his  defense.  At  the  close  of 
Lewis'  examination,  the  jury  was  dismissed  pending  argument  by 
counsel  on  the  motion  of  the  defense  that  the  court  direct  the  jury 
to  bring  in  a  verdict  of  acquittal.  This  motion  was  argued  at  length 
on  Wednesday  afternoon.     The  court  reserved  decision. 

THE    ACQUITTAL. 

Thursday  morning  the  streets  were  alive  with  newsboys  shortly 
after  court  convened,  shouting  "Extra  Star,  E.  G.  Lewis  Acquitted !" 
The  headlines  recited  that  Judge  Riner  had  ordered  the  jury  to  bring 
in  a  verdict  of  acquittal!  The  scene  that  followed  this  summary 
dismissal  of  the  case,  whereby  in  effect  the  prosecution  was  thrown 
out  of  court,  is  thus  depicted  in  the  St.  Louis  Star  of  that  date: 

Although  Judge  Riner  stated  from  the  bench  that  demonstrations  of 
approval  or  disapproval  on  the  part  of  the  vast  throng  which  crowded 
the  court  would  not  be  tolerated,  a  most  affecting  scene  followed  his  rul- 
ing. Former  Governor  Lon  V.  Stephens  was  the  first  person  to  reach 
Lewis'  side  and  grasp  his  hand  following  the  verdict  of  acquittal.  The 
defendant's  wife  was  next  at  his  side.  Lewis  kissed  and  embraced  his  wife, 
and  they  felicitated  each  other  on  the  outcome  of  the  trial.  A  strikingly 
peculiar  feature  of  the  scene  was  that  almost  every  member  of  the  jury 
rushed  to  Lewis  aiid  heartily  congratulated  him  on  the  result  of  the  trial. 
Several  jurors  informed  him  that  the  jury  would  have  acquitted  him  with- 
out instructions   from  the  Court. 

The  Post-Dispatch  remarked:  The  jury  seemed  entirely  willing  to  follow 
the  instructions  of  Judge  Riner.  When  the  clerk,  after  reading  the  ver- 
dict, asked  the  formal  question  whether  the  verdict  was  that  of  the  whole 
jurj',  all  the  members  nodded  promptly.  Several  replied  with  emphatic 
affirmatives.  Several  jurymen  crowded  about  Lewis  and  told  him  they 
would  have  acquitted  him  in  any  event.  Says  the  Times:  An  unusual  inci- 
dent was  that  the  jurors  did  not  wait  for  Lewis  to  come  over  and  thank 
them,  but  all  crowded  in  his  direction  the  moment  they  were  dismissed. 
"The  ruling  of  .Judge  Riner,"  says  the  Star,  "comes  as  a  great  surprise  to 
many  of  the  Government  officials  who  have  been  active  in  pushing  the 
charges  against  Lewis.     They  were  unable  to  conceal  their  chagrin." 

Interviewed  by  a  Times  reporter  at  the  close  of  the  trial,  Judge 
Shcpard  Barclay  said:  "This  is  the  end  of  our  fight,  and  we  have 
won."  Even  the  district  attorney,  according  to  the  same  newspaper, 
was  quoted  as  having  said  to  Lewis,  "You  won  fairly."  The  senti- 
ment of  the  community  was  reflected  editorially  by  the  St.  Louis 
newspapers  on  May  15.     The  Republic  said: 

The  acquittal  of  E.  G.  Lewis  yesterday  was  anticipated  by  all  who  had 
any  knowledge  of  the  facts.  Both  the  State  and  Federal  courts  have  now 
put  the  seal  of  condemnation  on  the  extraordinary  proceedings  by  which 
liis  banking  enterprise  was  wrecked.  Two  courts  have  formally  ruled  that, 
however  visionary  his  project  may  have  seemed,  there  is  absolutely  no  evi- 
dence that  he  devised  his  banking  scheme  with  intent  to  defraud.  There 
was,  therefore,  no  justification  for  the  harassing  prosecution  to  which  he 
has  been  subjected.    When  the  half-dozen  or  more  cases  involving  the  al- 


732  THE  SIEGE  OF  UNIVERSITY  CITY 

leged  violations  of  the  postal  laws  come  to  trial,  if  they  ever  do,  it  will  be 
found  that  they  rest  on  the  same  sort  of  unsubstantial  foundation. 

Lewis'  acquittal  and  complete  vindication  had  a  two-fold  effect. 
It  crystallized  public  sentiment  in  his  favor,  and  it  set  free  his 
energies  to  attack,  with  zest,  the  many  new  projects,  the  seeds  of 
which  were  germinating  in  his  fertile  mind.  Lewis'  return  to  Uni- 
versity City  after  tlie  impromptu  reception  accorded  him  in  the 
court  room,  was  a  triumphal  procession.  Friends  hailed  him  from 
the  streets  and  greeted  him  as  he  passed,  shouting  congratulations. 
On  his  arrival  at  University  City  all  the  employees  of  his  enter- 
prises were  grouped  en  masse  on  the  front  steps  of  the  octagon  tower 
to  give  him  a  welcome.  The  word  passed  among  his  neighbors  like 
wild  iire,  and  plans  for  a  public  reception  and  testimonial  were 
immediately  set  on  foot.  The  following  handbill  was  printed  and 
distributed  throughout  St.  Louis  county:  "E.  G.  Lewis  acquitted. 
Victory  over  oppression  and  persecution  to  be  celebrated.  Citizens 
of  St.  Louis  county  are  requested  to  assemble  at  the  court  house 
this  evening  at  7:30,  to  arrange  for  a  demonstration  in  honor  of  the 
final  triumph  of  Mr.  Lewis  and  to  show  how  he  is  appreciated  in 
the  count}-." 

Says  the  Republic  of  May  16:  Residents  of  Clayton  and  University 
City  united  last  night  in  a  demonstration  celebrating  the  victory  of  E.  G. 
Lewis  on  his  acquittal  of  the  charge  of  misusing  the  mails  in  promoting  the 
People's  United  States  Bank.  A  crowd  estimated  at  1,200  persons  congre- 
gated on  the  lawn  in  front  of  the  Woman's  National  Daily  Building  to 
greet  the  man  who  had  signally  defeated  the  United  States  Government 
in  a  three  years'  legal  battle.  Scores  of  people  from  St.  Louis  joined  in 
the  ovation.  Joseph  C.  McAtee  read  a  testimonial  which  had  beefi  en- 
grossed on  parchment  and  signed  by  residents  of  the  county,  pledging 
their  moral  support  to  Mr.  Lewis  in  all  of  his  present  and  prospective  enter- 
prises. The  signers  expressed  their  unqualified  confidence  in  Lewis. 
Lewis,  deeply  affected,  made  a  response  in  which  he  thanked  his  auditors 
for  their  staunch  friendship  and  support.  Without  this,  he  said,  he  could 
never»have  been  victorious  in  his  fight  against  such  odds.  Continuing,  Lewis 
promised  that  within  a  short  while  the  People's  United  States  Bank  would 
be  reorganized.  There  would  also  be  at  University  City,  he  said,  a  library, 
a  correspondence  school  and  many  other  notable  improvements.  He  de- 
clared his  purpose  to  improve  University  City  with  many  miles  of  paved 
streets,  park,  water,  gas,  electric  lights,  and  sewers,  and  to  make  Uni- 
versity City  an  ideal  residence  district. 

The  fact  that  a  Federal  grand  jury  had  been  summoned  to  bring 
in  additional  indictments  against  Lewis  was  noted  in  the  St. 
Louis  press  of  October  6,  1908.  The  refusal  of  the  grand  jury  to 
indict  was  clircmiclcd  three  days  later.  In  an  effort  to  get  a  new 
indictment,  the  attorney-general  of  the  United  States  took  the  case 
out  of  the  hands  of  the  local  Federal  officials  and  brought  on  Robert 
P.  Whitehouse,  formerly  United  States  district  attorney  of  Port- 
land, Me.,  as  a  special  assistant  to  Attorney-General  Bonaparte. 
For  three  days  Whitehouse  brought  witnesses  before  the  grand  jury. 
The  jurors  then  intimated  that  they  did  not  care  to  hear  further  evi- 
dence. According  to  reports  at  the  Federal  Building,  one  of  the 
grand  jurors,  a  widely  known  St.  Louis  business  man,  delivered  a 


THE  DREYFUS  CASE  OF  AMERICA  783 

speech  to  the  jury  declaring  that  Lewis  was  being  persecuted  by  the 
Government.  This  juror  said  that  Lewis  had  brought  hundreds  of 
thousands  of  dollars  to  St.  Louis,  and  that  he  should  be  welcomed 
and  protected  by  business  interests,  rather  than  prosecuted.  When 
the  vote  was  taken  there  was  not  a  sufficient  number  to  return  a 
true  bill.  Six  additional  indictments  were,  however,  kept  hanging 
over  Lewis'  head  for  twelve  months  more.  Then,  on  October  23^ 
1909,  the  district  attorney  came  into  court  of  his  own  motion  and 
caused  all  of  these  indictments  to  be  dismissed.  Following  is  the 
language  of  the  official  record: 

And  thereupon  the  district  attorney  says  that  he  will  not  further  prose- 
cute the  said  defendants  upon  the  indictments  herein  against  them,  and  asks 
that  the  said  indictments  be  now  dismissed. 

JUDGE    RINEr's    opinion. 

The  opinion  of  Judge  Riner  in  directing  the  verdict  of  acquittal 
on  May  14,  1908,  may  therefore  be  taken  as  the  close  of  the  first 
joint  campaign  of  the  Postoffice  Department  and  the  Department 
of  Justice  to  bring  about  the  conviction  of  Lewis  on  a  criminal 
charge.  This  decision  marks  perhaps  the  greatest  victory  of  the 
Siege.  So  significant  is  its  language  that  the  full  text  is  here 
given.  With  this  judicial  finding  that  the  evidence  of  the  defend- 
ant's (Lewis')  good  faith  was  "overwhelming"  this  chapter  may  fitly 
be  brought  to  a  close.     The  Court  said: 

At  the  conclusion  the  defendant's  counsel  moved  the  Court  to  instruct 
the  jury  to  return  a  verdict  of  not  guilty.  Upon  this  motion  the  Court 
invited  argument.  The  argument  of  counsel,  together  with  the  evidence 
given  upon  the  trial,  has  been  intently  and  deliberately  considered,  and  we 
now  proceed  in  a  brief  way  to  a  disposition  of  it.  If  this  motion  is  well 
taken,  the  trial  ends.  It  becomes  important  and  necessary,  therefore,  to 
determine  this  question  before  proceeding  further  in  the  case,  and  where 
counsel  rely  upon  it,  the  practice  is,  as  was  done  in  this  case,  to  present 
this  question  for  the  consideration  of  the  Court  at  the  conclusion  of  the 
testimony. 

The  indictment  charges  the  defendant  in  proper  form  with  having  de- 
vised a  banking  scheme  to  defraud  certain  persons  therein  named  and  oth- 
ers, and  as  a  part  of  that  scheme  that  he  intended  to,  and  did,  use  the  mails 
of  the  United  States,  for  the  purpose  of  putting  it  into  effect,  in  violation 
of  Section  5480  of  the  Revised  Statutes  of  the  United  States  as  amended. 

Much  testimony  has  been  taken  by  both  sides  along  the  same  general 
line.  Indeed,  there  is  really  no  conflict  as  to  the  principal  facts.  The 
evidence  shows  conclusively  that  the  defendant  did  devise  a  scheme  to  estab- 
lish this  bank  and  that  as  a  part  of  the  scheme  he  intended  to,  and  that  he 
did,  use  the  United  States  mails  for  the  purpose  of  carrying  the  scheme 
into  effect.  The  fact  of  the  existence  of  the  scheme,  and  the  method  of  cnr- 
rying  it  into  effect  being  established,  we  pass  to  a  consideration  of  the 
other  and  all-important  question,  was  the  scheme  devised  by  the  defendant 
with  the  purpose  and  intent  to  defraud?  This  question  we  are  to  deter- 
mine from  the  facts  surrounding  the  transactions  disclosed  by  the  evidence. 
This,  and  kindred  questions,  are  ordinarily,  and  in  all  cases  where  the  Court 
entertains  a  doubt,  left  to  the  determination  of  a  jury.  It  is  quite  true  that 
the  Court  should  be  very  careful,  in  all  cases,  not  to  exercise  or  assume 
powers  which  do  not  properly  belong  to  it.  But  it  is  equally  true  that 
it  should  never  hesitate  to  perform  its  full  duty  regardless  of  the  question 
whether  the  result  of  its  judgment  may  please  or  subject  it  to  criticism. 

When  a  question  like  this  is  presented,  and  the  only  alternative  is  a 


734  THE  SIEGE  OF  UNIVERSITY  CITY 

dereliction  of  dutj,  or  the  possible  criticism  of  the  public,  the  man  has  no 
business  on  this  bench  who  would  hesitate  one  moment  which  to  adopt.  The 
Government,  as  suggested  during  the  trial,  is  interested  in  this  prosecu- 
tion; interested  in  two  ways:  First,  to  see  to  it  if  this  defendant  has  vio- 
lated the  laws  of  this  country  that  he  is  fairly  tried  and  punished  for  his 
crime;  and,  second,  if  his  guilt  is  not  established,  then  to  see  to  it  that  he  is 
promptly  acquitted  of  the  charges  against  him. 

Counsel  for  the  Government  have  performed  their  duty  in  this  respect 
and  have  presented  the  case  fully,  and,  the  Court  thinks,  fairly.  But  in  this, 
as  in  every  other  case,  there  is  a  preliminary  question  to  be  determined  by 
the  Court  at  this  stage  of  the  proceedings,  and,  it  is  this:  Giving  to  the 
jury  the  broadest  latitude  to  draw  every  inference  which  twelve  men  could 
reasonably  and  properly  draw  from  the  evidence,  would  the  Court  be 
willing  to  accept  a  verdict  of  guilty  as  a  basis  of  judgment  for  conviction? 
While  I  do  not  anticipate  that  such  a  verdict  would  be  reached  by  the  jury 
if  the  Court  should  see  proper  to  submit  the  case  to  them,  yet  I  am  free 
to  say,  that  the  Court,  leaving  out  of  consideration  the  testimony  of  the 
defendant,  could  not,  under  the  evidence,  permit  such  a  verdict  to  stand 
and  would  feel  bound  to  set  it  aside.  I  say  this  without  reference  to  the 
defendant's  testimony.  It  is  but  fair  to  add,  however,  that  his  testimony, 
his  demeanor  upon  the  stand,  his  full  disclosure  of  all  the  facts  surround- 
ing the  case,  tends  to  strengthen  the  views  here  expressed. 

I  shall  not  take  the  time  to  review  the  evidence  at  length,  but  consider  it 
all  sufficient  for  our  purpose  in  disposing  of  the  case  to  say  that  the 
scheme,  devised  and  carried  into  effect  by  the  defendant,  appealed  not  only 
to  persons  unfamiliar  with  the  banking  business,  but  also  to  bankers,  offi- 
cers of  trust  companies,  vice-presidents  and  general  managers  of  railroads, 
and  others  whose  life  work  is  to  deal  with  such  questions. 

That  the  defendant  was  a  man  whose  character  among  business  men 
was  above  reproach,  has  been  repeatedly  testified  to  by  reliable  men  upon 
the  witness  stand.  They  had  faith  in  his  scheme  and  subscribed  for  the 
stock  of  the  bank,  and  they  have  faith  in  it  yet.  Certain  it  is  that  the  de- 
fendant did  not  personally  profit  by  it.  The  course  taken  by  him  to  fully 
reimburse  all  of  those  who  had  joined  in  the  enterprise  and  his  success  in 
that  respect,  under  very  trying  circumstances,  is,  to  my  mind,  the  best  evi- 
dence of  the  lawful  purpose  of  his  scheme. 

While  I  am  free  to  say  that  upon  its  face  the  scheme  seems  to  some  of 
us,  who  are  accustomed  to  more  conservative  methods  of  transacting 
business,  rather  visionary,  yet,  as  stated  by  the  Supreme  Court  in  the  case 
of  Durland  vs.  United  States,  161  U.  S.  30«,  if  the  defendant  "entered  in 
good  faith  upon  that  business,  believing  that  out  of  the  money  received 
he  could  by  investment  or  otherwise  make  enough  to  justify  the  promised 
return,  no  conviction  could  be  sustained,  no  matter  how  visionary  might 
seem  the  scheme."  , 

It  is  all  sufficient  for  me  to  say  in  conclusion  that,  after  carefully  review- 
ing the  evidence,  the  Court  is  of  the  opinion  that  the  evidence  of  the  good 
faith  of  the  defendant  is  overwhelming,  and  that  the  charge  of  a  fraudu- 
lent purpose  in  devising  and  carrying  the  scheme  into  effect  is  not  sustained. 

Under  such  circumstances  it  is  the  plain  and  bounden  duty  of  the  Court 
to  direct  a  verdict  and  to  end  the  trial.  *  *  *  Indeed,  I  think  it  is  the 
well  established  rule,  it  is  not  only  the  privilege  but  the  bounden  duty  of 
the  Court  to  so  dispose  of  the  case  when  satisfied  that  no  other  verdict 
could  be  permitted  to  stand.  I  desire  to  express  to  counsel  upon  both 
sides  of  this  case  my  appreciation  of  the  fairness  and  evidence  of  a  can- 
did purpose  on  their  part  to  present  to  the  Court  the  whole  case,  which 
has  characterized  this  trial.  Gentlemen  of  the  jury,  for  the  reasons  stated, 
with  the  request  made  by  this  defendant,  you  are  directed  to  return  a 
verdict  of  not  guilty  in  this  case,  and  the  motion  of  the  defendant  is 
sustained. 


CHAPTER  XXIX. 

DELENDA  EST  CARTHAGO. 

The  Fall  of  University  City — The  Eleventh  Indictment — 
Enters,  Inspector  Swenson — Swenson  on  the  Grill — 
The  Receivership  Proceedings — -The  Twelfth  Indict- 
ment— The  Third  Trial — The  Court's  Charge  and 
Argument  for  the  Prosecution — Theory  of  the  League 
— The  Real  E.  G.  Lewis — The  People's  University — 
The  Last  Assault — The  Congressional  Inquiry — The 
Ravages  of  War — Victory  in  Defeat — The  American 
Woman's  Republic. 

They  have  not  tried  Mr.  E.  G.  Lewis  for  some  little  time,  and  we  were 
beginning  to  wonder  whether  they  had  got  out  of  the  habit.  We  note  with 
interest  that  another  Lewis  case  is  about  due.  It  is  probably  a  good  thing 
to  try  him  every  so  often,  just  to  keep  their  hand  in.  Whatever  else  has 
been  said  about  his  faults  as  a  business  man,  nobody  can  say  he  has  not 
contributed  handsomely  to  the  business  of  the  courts  around  here.  It 
would  be  an  awful  thing  if  they  ever  let  him  get  away  from  them  for  good. 
And  how  stupid  it  would  be  for  the  public!  Our  Lewis  trials  have  become 
quite  as  much  of  an  institution,  dear  to  home  pride,  as  the   free  bridge. 

Thus  observes  the  St.  Louis  Republic,  commenting  editorially 
upon  the  apparent  determination  of  the  Federal  clique  to  keep 
Lewis  on  the  rack.  This  delicious  little  skit  was  entitled  "A  Con- 
tinuous Performance."  It  was  printed  upon  the  occasion  of  Lewis' 
latest  indictment  in  December,  191 L  For  the  fifth  anniversary 
of  Lewis'  second  trial  before  Judge  Riner  found  him,  for  the 
eleventh  time,  under  indictment.  For  the  third  time  he  was  upon 
trial,  in  the  United  States  District  Court  at  St.  Louis.  He  was 
again  to  defend  himself  against  charges  of  having  used  the  United 
States  mails  with  intent  to  defraud.  Once  more  he  sat  at  the  counsel 
table  for  the  defense,  suported  on  either  hand  by  his  attorneys, 
Judge  Shepard  Barclay  and  Patrick  H.  Cullen.  For  the  latter, 
meantime,  had  become  a  law  partner  of  Lewis'  senior  counsel. 

The  counsel  table  for  the  prosecution  was  once  more  encircled 
by  Federal  officials.  The  present  United  States  district  attorney, 
Charles  A.  Houts,  and  his  assistant.  Homer  Hall,  headed  the  list. 
Some  half  dozen  postoffice  inspectors,  including  the  chief  inspector 
from  Washington,  were  in  continuous  attendance.  Conspicuous 
among  these  was  James  L.  Stice,  former  complainant  against  the 
People's  Bank  and  chief  witness  on  behalf  of  the  Government  at 
the  congressional  inquiry.  Prominent  also  was  Inspector  J.  S. 
Swenson,  specially  commissioned  by  the  Postoffice  Department,  in 
1911,  to  put  Lewis  in  the  penitentiary. 


736  THE  SIEGE  OF  UNIVERSITY  CITY 

A  new  Federal  judge,  Charles  F.  Amidon,  of  North  Dakota,  is 
on  the  bench.  This  name  is  not,  however,  unfamiliar  to  the  reader. 
Amidon,  though  a  district  judge,  sat  with  Circuit  Judges  Sanborn 
and  Hook  in  the  United  States  Circuit  Court  of  Appeals  during 
the  May  term  of  1910.  He  then  concurred  in  the  final  decree 
handed  down  by  Hook  in  the  case  of  the  Lewis  Publishing  Company 
versus  Wyman.  This  was  the  suit  to  enjoin  the  withdrawal  of 
second-class  entry  from  the  Woman's  Magazine.  It  was  the  case 
in  Mhich  Judge  Sanborn  (now  presiding  judge  of  the  United  States 
Court  of  Appeals  for  the  eighth  circuit),  gave  a  dissenting  opinion. 
Had  Amidon  concurred  with  Sanborn,  rather  than  with  Hook,  on 
that  occasion,  the  wounds  of  the  Lewis  Publishing  Company  could 
have  been  healed  by  judicial  process.  There  need  have  been  no 
appeal  to  Congress,  or  tedious  recourse  to  the  United  States  Court 
of  Claims.  Amidon  thus  liad  personal  knowledge  of  the  contro- 
versy between  Lewis  and  the  Postoffice  Department.  He  had,  in- 
deed, already  cast  one  decisively  adverse  vote  therein. 

THE    FALL    OF    UNIVERSITY    CITY. 

A  full  account  of  Lewis'  activities  during  the  five  years  from 
1907  to  1912,  would  require  a  companion  volume  equal  in  size  to 
this  present  story.  A  complete  history  of  the  American  Woman's 
League  alone  is  well  worthy  of  being  recorded,  and  may  some  day 
be  undertaken  by  the  present  writer.  It  would  not  be  possible  to 
clarify  the  issues  of  the  last  indictment  and  trial  of  Lewis,  with- 
out first  reviewing  the  history  of  the  municipality  of  University 
City,  the  University  City  Improvement  Plan,  the  People's  Savings 
Trust  Company,  the  purchase  of  the  St.  I/Ouis  Star,  the  American 
Woman's  League,  and  the  Builders'  Fund  Debentures,  as  fully 
as  we  have  dwelt  in  the  foregoing  chapters  upon  the  story  of 
Lewis'  earlier  enterprises.  No  attempt  will  be  made,  therefore, 
in  this  place,  to  report  fully  the  recent  trial,  or  to  place  the  reader 
in  a  position  to  entertain  a  positive  conviction  as  to  the  issues. 
The  only  conclusion  we  can  feel  justified  in  drawing  with  relation 
to  this  third  trial  of  I>ewis,  is  that  neither  the  Administration 
itself,  nor  the  Federal  agencies  through  whom  it  is  compelled  to 
operate,  can  come  to  the  trial  of  this  defendant  with  open  minds 
or  with  clean  hands. 

Lewis'  condition  at  his  latest  trial  and  his  estate  when  he  was 
placed  upon  his  defense  for  the  first  time  in  the  matter  of  the 
People's  Bank,  are  in  marked  contrast.  Even  at  the  former  trial 
he  sat  amidst  tlie  wreck  and  ruin  of  his  past  prosperity.  But  then 
according  to  his  belief,  he  had  power  and  resources,  to  resurrect 
and  rehabilitate  them.  In  1912  he  was  penniless.  In  the  six  years 
from  1899  to  1905  he  had  built  up  his  enterprises  to  a  point  such 
that  his  equities  alone  amounted  to  something  like  two  millions  of 
dollars.  Within  the  two  years  from  1905  to  1907,  those  enterprises 
had  been  destroyed.  Then,  for  five  years,  from  1907  to  1912, 
Lewis  had  labored  with  tireless  industry,  working  night  after  night 


THE  DREYFUS  CASE  OF  AMERICA  737 

until  the  small  hours  of  the  morning,  to  retrieve  his  losses  and  re- 
establish his  own  fortunes  and  those  of  his  investors  and  depend- 
ents. To  that  end  he  had  stripped  himself  of  all  his  holdings  in 
his  various  corporations.  He  had  mortgaged  their  every  asset. 
By  this  means  he  had  secured  loans  aggregating  some  three  mil- 
lions of  dollars.  Every  dollar  of  this  vast  sum  had  been  staked 
in  his  strenuous  endeavor  to  stem  the  ever  rising  tide  of  adversity. 
All  had  been  swept  away.  Finally,  in  an  effort  to  protect  the  in- 
terests of  his  investors,  he  had  mortgaged  his  own  home  for  thirty- 
five  thousand  dollars.  He  had  realized  upon  the  surrender  value 
of  his  life  insurance  policies  and  had  employed  the  proceeds  in 
like  manner.  He  had  even  withdrawn  from  the  savings  bank  a  little 
nest-egg  of  two  thousand  dollars  which  he  had  been  accumulating 
for  two  young  nieces  who  are  members  of  his  immediate  family.  He 
had  withheld  no  sacrifice.  Finally,  he  had  cheerfully  acquiesced 
in  a  plan  for  the  reorganization  of  his  enterprises  proposed  by 
certain  Eastern  publishers  associated  with  the  American  Woman's 
League.  This  plan  embraced  the  assignment  by  Lewis  of  all  his 
equities  in  his  various  companies,  and  all  his  personal  property. 
It  demanded  his  relinquishment  of  all  the  offices  he  formerly  had 
occupied,  save  only  that  of  president  of  the  American  Woman's 
League.  It  required  his  voluntary  retirement  from  the  active  man- 
agement of  these  various  institutions.  This  was  a  creditors'  move- 
ment. It  was  proposed  solely  in  the  interest  of  the  investors. 
It  contemplated  the  liquidation  of  such  of  the  companies  as  were 
found  to  be  in  a  hopelessly  bankrupt  condition.  It  anticipated, 
however,  the  reorganization  and  revival  of  others,  the  resources 
of  which  seemed  sufficiently  tangible.  Lewis  sought  only  to  as- 
sure himself  that  the  offices  of  his  brother  publishers  were  ten- 
dered in  good  faith,  that  the  proposed  plan  was  in  capable  hands, 
and  that  it  gave  promise  of  successful  issue.  He  then,  on  April 
11,  1911,  unhesitatingly  attached  his  signature  to  the  mass  of  legal 
documents  which  stripped  him  of  the  last  vestige  of  his  earthly 
possessions.  But  even  this  did  not  relieve  him  of  personal  obli- 
gations in  the  form  of  his  debenture  notes  in  excess  of  one  and  a 
half  million  dollars. 

Eugene  H.  Angert,  attorney  for  the  Reorganization  and,  later, 
for  the  receiver  of  the  Lewis  enterprises,  told  the  congressional 
committee  of  his  part  in  preparing  and  having  executed  the  power 
of  attorney  under  which  Lewis  thus  transferred  to  others,  without 
reserve,  the  control  of  all  his  properties.     Mr.  Angert  said: 

I  spent  a  month  investigating  the  different  legal  phases  of  these  insti- 
tutions, but  without  meeting  Mr.  Lewis.  It  was  thought,  if  I  talked  with 
him,  that  he  might  influence  me  by  making  some  suggestion  as  to  how  the 
reorganization  should  be  brought  about.  Much  to  my  surprise,  when  the 
papers  were  finally  drawn,  Mr.  Lewis  signed  everything.  In  justice  to  him 
it  should  also  be  stated  that  for  a  period  of  three  months,  while  the  Re- 
organization was  in  control,  he  never  interfered  in  any  way  with  the 
operation  of  these  properties. 


738  THE  SIEGE  OF  UNIVERSITY  CITY 

After  this  act  of  self-abnegation,  Lewis  arranged  to  leave  Uni- 
versity City  for  a  time,  in  order  to  draw  away  from  his  enterprises, 
if  possible,  the  fires  of  the  Siege,  which  had  been  renewed  by  the 
Federal  forces.  He  hoped  to  conceT)trate  them  upon  his  personal 
activities.  He  therefore  appealed  to  the  little  group  of  staunch 
friends  and  backers  who  had  stood  by  him  from  the  very  beginning 
of  his  spectacular  career,  for  the  money  necessary  to  make  a  trip 
to  the  Pacific  Coast  in  the  interests  of  the  American  Woman's 
League.  A  half  dozen  of  these  old  friends  raised  two  thousand 
dollars  by  voluntary  subscription  among  themselves,  and  loaned  that 
amount  to  Lewis  for  the  purposes  of  this  journey.  He  took  his 
departure  in  May,  1911,  upon  the  eve  of  the  inquiry  which  had 
been  directed  by  vote  of  Congress  into  the  conduct  of  the  Post- 
office  Department  in  these  affairs.  His  departure  was  the  signal  for 
the  fall  of  University  City.  For,  during  Lewis'  absence  on  the 
Pacific  Coast,  University  City  was  at  last  invested  and  taken  by 
the  Federal  forces  and  their  allies.  All  of  his  enterprises  were 
thrown  into  tlie  hands  of  receivers,  under  circumstances  next  to  be 
described.  His  absence  alone  spared  him  the  humiliation  of  per- 
sonally surrendering  the  keys   of  his   stronghold  to  the  victors. 

THE    ELEVENTH   INDICTMENT. 

Lewis'  books  and  papers  having  thus  fallen  into  possession  of 
the  enemy.  Government  expert  accountants  and  postotfice  inspec- 
tors were  free  to  investigate  to  their  hearts'  content.  The  news 
of  the  receivership  proceedings  was  speedily  followed  by  tidings 
of  Lewis'  eleventh  indictment,  upon  renewed  charges  of  having 
used  the  United  States  mails  with  intent  to  defraud.  The  entire 
proceeding  whereby  the  receivership  and  indictments  were  pro- 
cured, was  evidently  engineered  by  the  Administration  through 
postoffice  inspectors  and  the  Department  of  Justice,  in  an  effort 
to  checkmate,  if  possible,  the  pending  congressional  investigation. 
In  this  the  allies  were  unsuccessful.  Despite  all  speed  by  the  in- 
spectors in  the  investigation  of  Lewis'  books  and  papers,  the  sum- 
moning of  a  grand  jury  and  the  subpoenaing  of  witnesses,  an  in- 
dictment could  not  be  procured  until  the  very  day  the  Ashbrook 
Committee  began  its  hearings.  It  was  a  neck  and  neck  race,  so 
to  say,  with  Lewis  winning  by  a  nose.  The  congressional  com- 
mittee, having  opened  its  inquiry  before  news  of  the  indictment 
came  to  hand,  refused  to  allow  the  manifest  subterfuge  of  the 
Department  to  interfere  with  the  progress  of  its  investigation.  For 
it  should  be  clearly  borne  in  mind  tliat  the  inquiry  of  the  Ashbrook 
Committee  is  not  an  investigation  of  Lewis,  but  of  the  Postoffice 
Department  itself.  Lewis  was  recalled  from  the  Pacific  Coast  to 
appear  as  a  witness  before  the  committee  some  weeks  afterwards. 
The  only  immediate  benefit  of  the  indictment  to  the  Federal  au- 
thorieties,  was  to  compel  Lewis  to  absent  himself  from  Washington 
long  enough  to  make  a  trip  to  St.  Louis  for  his  formal  arraign- 
ment.     The   congressional   committee,   unmoved    by   political   con- 


THE  DREYFUS  CASE  OF  AMERICA  739 

siderations,   refused   to    allow   the   pendency   of   the   indictment   to 
interfere  with  the  progress  of  its  investigation. 

ENTERS,     INSPECTOR     SWENSON. 

A  few  words  touching  the  manner  in  which  this  last  indictment 
was  secured,  and  a  brief  sketch  of  the  impressions  conveyed  to 
the  writer's  mind  by  the  scenes  in  the  court  room,  will  reveal  the 
atmosphere  surrounding  the  entire  case.  The  story  of  the  Siege 
must  then  be  drawn  to  a  close.  The  keynote  to  these  proceedings 
is  to  be  found  in  the  personality  of  the  man  selected  by  the  De- 
partment at  Washington  to  devote  his  entire  time  and  attention  to 
the  Lewis  case.  The  personage  who  thus  assumes  a  position  of 
commanding  importance  in  the  closing  campaign  of  the  Siege,  com- 
parable to  that  of  Inspector  Fulton  in  earlier  days,  is  one  J.  S. 
Swenson,  a  postoffice  inspector  from  the  State  of  Iowa  and  reputed 
to  be  a  protege  of  Judge  Smith  McPherson.  Swenson  is  re- 
ported to  have  boasted  to  David  L.  Grey,  St.  Louis  representative 
of  Price,  Waterhouse  &  Co.,  that  he  was  assigned  to  St.  Louis  to 
"put  E.  G.  Lewis  in  the  penitentiary."  Swenson  sought  to  qualify 
for  the  task  by  alluding  to  his  success  in  running  down  the  May- 
bray  gang  of  confidence  men  and  fake  foot  racers.  This,  he  avers, 
was  the  basis  upon  which  he  was  chosen  as  a  suitable  person  to 
carry  the  policies  of  the  Department  touching  Lewis  into  effect. 
H.  T.  Westerraan,  of  Westerman,  Trader  &  Co.,  also  testified 
that  Swenson  boasted  he  would  "get"  Lewis.  He  is  said  to  have 
remarked:  "Lewis  has  accused  us  in  his  paper,  and  we  are  going 
to  'get'  him."  Swenson,  by  his  own  admission,  worked  hand  in 
hand  with  Claude  D.  Hall,  one  of  the  attorneys  who  forced  the 
receivership.  He  also  admitted  sending  circular  letters  to  the  Class 
A  publishers  connected  with  the  League,  the  manifest  purpose  of 
which  was  to  intimidate  those  publishers  by  veiled  threats  of  the 
displeasure  of  the  Postoffice  Department,  and  thus  cause  them 
to  withdraw  from  Lewis  their  co-operation  and  support. 

Swenson,  it  also  appears,  was  instrumental  in  forcing  District 
Attorney  Houts  to  hasten  the  reindictment  of  Lewis.  Houts,  him- 
self, testified  before  the  Ashbrook  Committee  that  when  he  as- 
sumed office  in  February,  1910,  he  made  a  mental  reservation  to 
conduct  any  investigation  against  Lewis  with  an  open  mind  and  not 
to  allow  himself  to  be  hurried  into  a  prosecution  unless  it  appeared 
that  there  were  reasonable  grounds  for  such  action.  But  it  was 
developed  by  testimony  before  the  Ashbrook  Committee  that  Swen- 
son had  forced  Houts'  hand.  It  became  necessary  for  the  latter, 
in  order  to  head  off  a  movement  which  threatened  to  discredit  and 
even  to  oust  him  from  control  of  the  case,  as  United  States  district 
attorney,  to  take  steps  to  secure  the  return  by  the  grand  jury  of 
the  indictment  which  was  later  quashed  on  demurrer.  Mr.  Houts 
said:  "It  came  to  my  knowledge  that  a  plan  was  on  foot  to  appoint 
Henry  Rosskopf  special  prosecutor  to  take  charge  of  the  Lewis 
ease.     I  at  once   went  to  Washington   for   a  conference  with  At- 


740  THE  SIEGE  OF  UNIVERSITY  CITY 

lorney-General  Wickersham.  This  programme  was  called  off.  I 
took  Swenson  to  Washington  with  me.  It  was  thought  the  case 
had  not  moved  fast  enough." 

SWENSON    ON   THE    GRILL. 

While  Swenson  was  on  the  stand  before  the  Ashbrook  Committee, 
Congressman  Redfield  introduced  and  read  into  the  record  a  cir- 
cular letter  signed  by  the  former,  under  date  of  February  17,  1911. 
This  circular  invited  the  recipients  to  state  what  financial  trans- 
actions they  had  had  with  the  Lewis  concerns.  One  of  these  was 
sent  to  Rev.  J.  L.  Holtzman  of  Sherrard,  111.  It  elicited  from  Mr. 
Holtzman  the  following  response:  "I  have  no  complaint  to  make 
against  Mr.  E.  G.  Lewis.  I  am  reading  the  'Corruption  of  our 
Postal  System/  and  I  think  it  is  a  disgrace  to  our  Government  to 
allow  such  a  'spy  system'  to  exist."  Swenson  identified  his  reply 
to  Holtzman,  which  was  read  into  the  record.     In  it  Swenson  says: 

It  is  not  the  policy  of  the  Government  (sic)  to  reply  to  ordinary  letters 
of  abuse,  but  inasmuch  as  you  are  a  public  man,  an  exception  is  made  in 
this  instance.  It  would  be  improper  to  go  into  a  discussion  of  the  causes 
which  have  compelled  two  departments  to  again  order  an  investigation  of 
Mr.  Lewis,  and  I  will  only  say  that  you  are  misled  in  your  attitude.  You 
are,  of  course,  readiug  but  one  side,  and  it  seems  a  little  strange  that  a 
man  of  intelligence  should  permit  himself  to  be  carried  away  by  the  abuse 
and  insolent  methods  adopted  for  his  own  purposes  by  the  party  under 
investigation.  If  you  were  here  it  would  not  take  long  to  show  you  such 
facts  as  would  quickly  convince  you  that  the  course  of  the  Government  has 
been  made  necessary.  When  the  Government  has  a  duty  to  perform,  it, 
of  course,  will  be  done  regardless  of  abuse  of  officers  of  the  law,  either  by 
crooks  or  their  sympathizers. 

The  Chairman:     Mr.  Swenson,  you  wrote  this  letter? 

Mr.  Swenson:    Yes,  sir;  I  did. 

The  Chairman:  Will  you  tell  the  committee  whom  you  referred  to  when 
you  said  "either  by  crooks"? 

Mr.  Swenson:     That  is  a  general  expression. 

The  Chairman:     A  general  expression? 

Mr.  Swenson:    I  had  not  meant  that  to  specifically  apply  to  Mr,  Lewis. 

The  Chairman:  Did  you,  or  did  you  not,  intend  to  convey  that  im- 
pression to  Mr.  Holtzman? 

Mr.  Swenson:  No,  sir;  I  never!  I  meant  to  convey  the  general  idea 
that  oilicers  of  the  law  are  bound  to  do  their  duty,  no  matter  whether  they 
are  abused  or  opposed,  no  matter  what  result. 

The  Chairman:  I  then  understand  you  do  not  consider  Mr.  Lewis 
a  crook? 

Mr.  Swenson:     I  didn't  say  that. 

The  Chairman:  Well,  have  you  changed  your  mind  about  it  since  you 
wrote  this  letter? 

Mr.  Swenson:  I  don't  know  as  I  have.  I  don't  think  I  have.  I  say, 
so  far  as  that  expression  is  concerned,  that  is  my  idea  of  a  public  officer. 
He  is  bound  to  do  what  he  thinks  is  right — to  do  his  duty — whether  abused 
or  not.    That  is  what  I  expected  to  do  to  the  best  of  my  ability. 

Mr.  Alexander:  I  don't  think,  from  the  reading  of  that  letter,  there  is 
anybody  of  ordinary  sense  but  would  understand  that  reference  was  to 
Mr.  Lewis  as  a  crook.  Even  if  Mr.  Swenson  were  to  deny  it  until  he 
was  white-headed,  I   wouldn't  believe  him. 

Mr.  McCoy:  I  would  like  to  call  the  attention  of  the  district  attorney 
of  this  district  to  this  testimony  here,  and  let  him  take  that  before  the 
grand  jury  in  St.  Louis  and  see  what  will  happen. 


THE  DREYFUS  CASE  OF  AMERICA  741 

Mr.  Austin:  What  are  you  going  to  do  with  a  postofBce  inspector  for 
an   expression   of   that   kind? 

The  CiiAiaMAN:  He  has  no  right  to  brand  anj  man  as  a  crook  until  he 
is  proved  a  crook,  and  the  Postoffice  Department  has  not  yet  been  able  to 
prove  Mr.  Lewis  is  a  crook,  although  he  has  been  indicted  a  dozen  times. 

Mr.  Britt,  the  third  assistant  postmaster-general,  later  asked 
the  privilege  of  making  a  statement  in  defense  of  Swenson,  and 
to  register  an  exception  to  the  language  used  by  members  of  the 
committee  in  thus  branding  Swenson  as  a  perjurer.  Mr.  Britt 
explained  that  while  he  would  admit  Swenson  had  been  guilty 
of  many  indiscretions,  and  had  resorted  to  methods  in  the  investi- 
gation of  the  Lewis  case  which  he  (Britt)  as  the  representative 
of  the  Department,  could  not  api^rove,  he  had  it  from  Judge  Smith 
McPherson  that  Swenson  is  an  energetic  and  conscientious  official. 
He  admitted  that  Judge  McPherson  had  told  him,  however,  of 
some  of  Swenson's  indiscretions.  He  said:  "The  remarks  that 
have,  in  effect,  branded  Mr.  Swenson  as  a  perjurer  are,  of  course, 
very  severe  and  indicate  turpitude  of  the  very  highest  degree." 
Various  members  of  the  committee  then  defined  their  precise  atti- 
tude as  follows: 

Chairmak  Asiibrook:  Mr.  Britt  has  stated  that  this  inspector,  Swen- 
son, is  indiscreet  and  has  done  things  which  he  cannot  commend  or  approve. 
It  is  those  things  which  I  criticise.  I  do  not  wish  at  this  time  to  offer  any 
further  criticism  of  Mr.  Swenson,  but  I  cannot,  as  an  honest  man— and  I 
believe  I  am — withdraw  anything  that  I  have  said.  Two  days  ago  I  stated 
that,  if  the  charges  made  against  Mr.  Swenson  were  true,  he  ought  to  be 
removed.     I  believe  so  now. 

Mr.  Alexaxder:  I  heard  Mr.  Swenson's  testimony.  I  heard  his  answers 
to  questions  propounded  by  the  chairman,  relating  to  threats  alleged  to 
have  been  made  by  him  against  individuals  from  whom  he  sought  to  get 
statements.  I  noted  the  evasiveness  of  his  answers  and,  of  course,  I  re- 
membered his  answers  and  the  chairman's  questions.  They  were  put  in  a 
frank,  straightforward  way  and  were  entitled  to  a  frank,  straightforward 
answer.  I  said  that  when  Swenson  referred  to  "crooks  and  their  sympa- 
thizers" he  had  in  mind  and  meant  Lewis,  and  meant  to  charge  that,  in 
his  opinion,  Lewis  was  a  crook.  I  said  that,  although  Swenson  might  dis- 
claim that  he  had  Lewis  in  mind,  I  would  not  believe  him  if  he  were  to 
swear  it  until  he  was  gray-headed.     That  is  my  opinion  now. 

Mr.  McCoy:  Swenson  was  asked  the  plain  and  straightforward  ques- 
tion whether  or  not  he  intended  the  word  "crook"  to  refer  to  Lewis. 
After  repeated  questioning  and  after  he  was  given  every  opportunity  to 
answer  it,  he  still  persisted  in  saying  he  did  not  have  in  mind  any  inten- 
tion of  branding  Lewis  as  a  "crook."  I  say  now,  as  I  said  then,  that  I 
believe  when  he  denied  any  such  intention  he  committed  willful  and  de- 
liberate perjury.  I  said,  and  I  repeat,  that  the  matter  ought  to  be 
called  to  the  attention  of  the  district  attorney  of  this  district,  for  such 
action  as  he  may  see  fit  to  take  when  people  are  accused  of  perjury.  I 
repeat,  with  emphasis,  that  I  believe  the  witness  committed  deliberate  and 
willful  perjury.  I  have  nothing  to  retract.  I  do  not  believe  Mr.  Britt 
ought  to  have  put  into  the  record  a  certificate  of  character  of  this  man 
Swenson  from  Judge  McPherson. 

The  contents  and  history  of  the  eleventh  indictment,  in  securing 
which  Inspector  Swonson  was  chiefly  instrumental,  are  both  inter- 
esting and  instructive.  It  was  first  brought  by  the  Federal  grand 
jury  as   above  noted,  by  still   another  suggestive  eoincidence,  on 


742  THE  SIEGE  OF  UNIVERSITY  CITY 

July  12,  1911,  the  very  day  of  the  opening  of  the  congressional 
inquiry  at  Washington.  That  evening,  the  St.  Louis  newspapers 
scare-headed  the  amazing  fact  that  a  United  States  grand  juror 
had  sprung  to  his  feet  and  requested  permission  of  the  court  to 
enter  formal  protest  against  the  methods  by  wliich  the  indictment 
had  been  procured.  This  juror,  Eugene  B.  Stinde,  was  afterwards 
summoned  before  the  Ashbrook  Committee  during  its  hearings  at 
St.  Louis.  He  was  tlien  questioned  toucliing  the  newspaper  report 
that  when  he  came  out  of  the  grand  jury  room  he  had  asked  per- 
mission of  the  judge  to  speak.  The  judge  had  told  him,  it  was 
said,  if  he  really  wanted  to  make  a  speech  he  would  better  hire 
a  hall.  It  was  reported  that  he  did  make  a  speech,  nevertheless, 
stating  that  the  grand  jury  was  practically  coerced  into  bringing 
the  indictment. 

Mr.  Stinde  testified  that  in  July,  1911,  on  the  very  day  the 
Ashbrook  Committee  began  its  investigation  of  the  conduct  of 
the  Postoffice  Department  in  the  Lewis  case,  the  grand  jury  of 
which  he  was  a  member  found  an  indictment  against  Lewis.  "We 
were  asked,"  he  said,  "to  bring  in  the  indictment  on  that  day.  I 
would  like  to  tell  all  that  happened.  I  never  have.  I  don't  suppose 
I  ever  will  be  able  to.  I  would  like  to  tell  the  whole  world  about 
it.  I  have  been  compelled  to  keep  silent,  because  my  oath  bound 
me.  If  the  jiidge  had  not  interrupted  me,  I  would  have  told  it 
all  in  the  court  room."  The  haste  of  the  prosecuting  officials  to  pro- 
cure this  first  indictment  is  further  evidenced  by  the  fact  that  it 
was  afterwards  quashed  by  Judge  Trieber,  upon  demurrer  of  de- 
fendant's counsel,  on  the  ground  that  the  law  governing  the  sum- 
moning of  veniremen  by  the  United  States  marshal  had  not  been 
observed. 

DILLON,    HALL,    KING,    SWENSON    AND    COMPANY. 

The  second  indictment  upon  similar  grounds  was  procured  on 
February  12,  1912.  An  expert  accountant  had  been  engaged  upon 
the  books  of  the  Lewis  enterprises  since  the  reorganization  of 
April  11,  1911.  He  had  been  assisted  from  time  to  time  by  post- 
office  inspectors.  The  names  and  addresses  of  purchasers  of  the 
seven  per  cent  notes  and  preferred  stock  of  the  Lewis  Publishing 
Company,  and  the  six  per  cent  notes,  both  secured  and  unsecured, 
of  the  University  Heights  company,  had  been  obtained  and  cir- 
cularized. Letters  from  investors  had  been  removed  from  the  files 
of  both  companies,  for  use  as  evidence,  and  for  otlier  purposes.  A 
great  drag  net  had  been  thrown  out  over  the  country  by  the  in- 
spectors, in  an  effort  to  procure  witnesses  willing  to  testify  that 
they  had  been  defrauded.  The  publisher  of  the  Rural  New  Yorker, 
Mr.  John  J.  Dillon,  had  been,  (at  least  tacitly),  encouraged  to 
advertise  for  claims  and  complaints  against  the  Lewis  enterprises, 
and  to  submit  these  for  the  use  of  the  prosecution.  Two  St.  Louis 
attorneys,  one  of  extremely  dubious  reputation,  the  other  of  no  espe- 
cial prominence,  had  been  supported  in  bringing  receivership  pro- 


THE  DREYFUS  CASE  OF  AMERICA  743 

ceedings  against  all  of  the  Lewis  enterprises.  Meantime,  the  re- 
organization had  been  brought  about.  The  bona  fides  of  this  effort 
was  jointly  attacked  by  the  Rural  New  Yorker,  Messrs.  Hall  and 
King,  attorneys  for  the  receivership,  and  the  inspectors.  Investors 
were  told  that  the  reorganization  was  a  scheme,  devised  by  Lewis 
in  bad  faith,  to  recover  from  the  public  the  evidences  of  his  in- 
debtedness, and  thus  avoid  criminal  prosecution.  They  were  ad- 
vised, both  by  the  Rural  New  Yorker  and  the  inspectors,  to  place 
their  claims  in  the  hands  of  Attorneys  Hall  and  King.  Evidence 
of  collusion  between  these  avowed  opponents  of  Lewis  and  the 
Federal  authorities  is  ovcrwlielming.  INIr.  Angert,  in  the  course 
of  his  testimony  before  the  Ashbrook  Committee,  referred  to  what 
he  termed  the  interference  of  Inspector  Swenson  with  the  plans  of 
reorganization.  Swenson,  according  to  Angert,  worked  in  conjimc- 
tion  with  Attorney  Hall  in  an  effort  to  induce  the  co-operation  of 
a  sufficient  number  of  Lewis'  creditors  to  force  a  Federal  receiver- 
ship.    He  said: 

As  further  corroborative  evidence  that  the  information  on  which  these 
receivership  suits  were  based,  was  furnished  by  the  inspectors,  and  that 
the  Postoffice  Department  was  in  touch  with  Mr.  Hall,  who  brought  the 
suits,  I  have  a  letter  that  was  given  me  by  Cyrus  Bucher  of  Astoria,  111. 
This  letter  was  written  by  j\Ir.  Hall.  An  inspector  had  been  sent  to 
Astoria  to  inquire  of  Bucher  regarding  the  secured  notes  he  held  for  an 
investment  of  eleven  thousand  dollars  in  the  University  Heights  mortgage 
on  section  five.  Bucher  said  that  the  notes  were  in  the  bank.  The 
inspector  wanted  to  see  them,  Bucher  took  them  from  the  bank  and  the 
inspector  took  one  of  them  and  asked  permission  to  take  it  to  St,  Louis 
to  show  it  to  Mr,  Swenson.  This  was  done.  The  result  was  that  Bucher 
followed  the  note  to  St.  Louis  and  called  on  Swenson,  who,  to  Bucher, 
thoroughly  condemned  the  reorganization  and  induced  him  to  believe  that 
the  only  way  he  could  get  his  money  as  to  join  with  Hall,  and  not  with 
the  reorganization.  Swenson  took  Bucher  to  the  Missouri  Trust  building, 
where  Hall's  office  is  located,  and  left  him  at  the  door  of  the  building, 
saying  it  would  not  be  advisable  for  him  to  be  seen  going  into  Hall's 
office. 

The  letter  written  by  Hall  to  Bucher  shows  the  connection  between 
Hall  and  Swenson,  In  this  letter  Hall  says:  "Everybody  knows  that  it 
is  better  to  have  these  claims  in  the  hands  of  a  court  of  equity,  a  court 
of  conscience  of  the  United  States,  than  to  trust  them  to  E.  G.  Lewis 
and  his  agent,  Mr.  Williams,  who  is  acting  under  a  power  of  attorney. 
This  poirer  of  attorney  we  have  seen,  although  the  other  side  does  itot 
krioto  that  anyone  has  seen  it."  That  power  of  attorney  was  executed  in 
duplicate.  There  are  only  two  copies.  It  has  never  been  out  of  my  pos- 
session, except  a  copy  I  gave  to  United  States  Attorney  Houts.  When 
this  letter  came  into  my  possession  I  charged  Mr.  Houts  with  the  fact 
that  this  power  of  attorney  had  been  furnished  to  Mr.  Hall,  He  told  me 
he  had  given  it  to  Mr,  Swenson.  V/hether  Swenson  had  given  it  to  Hall, 
he  said  he  did  not  know.  But  he  didn't  feel  at  all  doubtful  of  the  propo- 
sition that  he  had  given  it  to  him,  and  that  they  had  been  co-operating. 

Chair JCAN  Ashbkook:  I  would  like  to  ask  Mr,  Britt,  for  information, 
whether  Mr.  Swenson,  who  sits  behind  him,  is  the  inspector-in-charge  in 
St.  Louis? 

Mr.  Britt:     No,  sir;  he  is  an  inspector. 

The  Chairman:  This  witness  has  impressed  me  as  giving  faithful, 
reliable  evidence,  and  I  want  to  say  just  a  word  to  Mr.  Britt,  in  whom 
I   have  the  highest  confidence.     I   believe   if  there  is  a  man  in  the  Post- 


744  THE  SIEGE  OF  UNIVERSITY  CITY 

office  Department,  or  the  Government,  who  intends  to  be  honest  and 
conscientious  and  to  do  the  right  thing  by  everybodj,  it  is  Mr.  Britt. 
With  that  faith  in  j'ou,  I  want  to  say  that  I  believe  it  is  your  duty  to 
investigate  tlie  charges  this  witness  has  made  against  this  man  Swenson, 
and  if  you  find  tlicy  are  true,  to  use  your  influence  to  have  him  removed 
from  the  service;  because,  if  they  are  true,  he  is  a  dangerous  man  and 
isn't  lit  to  be  in  tiie  Government's  employ. 

THE  RECEIVERSHIP  PROCEEDINGS. 

The  bill  of  Attorneys  Hall  and  King  asking  a  receivership  against 
all  the  Lewis  enterprises,  LeAvis  himself,  his  wife,  his  brother,  the 
American  Woman's  League,  the  Art  Museum  Society,  the  St.  Louis 
County  Land  and  Title  Company  (in  which  Lewis  happened  to  own 
a  few  shares  of  stock)  and  John  H.  Williams,  controller  for  the 
reorganization,  is  a  curiosity  in  the  history  of  Federal  jurisprudence. 
This  unique  document  consists  of  one  hundred  and  thirty-four  type- 
written pages,  believed  to  be  unparalleled  for  inanity  and  mendacity 
out  of  Bedlam. 

The  distress  of  the  Lewis  enterprises  had  thrown  into  the  hands 
of  reputable  St.  Louis  attorneys  considerable  amounts  of  matured 
evidences  of  indebtedness.  These  attorneys,  after  conference  with 
counsel  for  Lewis  and  the  conti'oller  for  the  reorganization  touch- 
ing the  existing  status  of  aifairs,  had  signified  their  willingness 
to  allow  the  reorganization  to  take  its  course,  in  hope  and  belief 
that  certain  of  the  enterprises  could  be  rehabilitated.  Not  so  the 
authors  of  this  remarkable  bill  in  equity.  Encouraged  by  the 
covert  support  of  the  Federal  authorities,  unmindful  of  the  conse- 
quences to  thousands  of  investors  not  represented  by  them,  and 
to  the  prejudice  of  the  true  interests  of  their  own  clients  (repre- 
senting about  two  per  cent  of  the  total  liabilities),  these  attorneys 
labored  diligently  to  defeat  the  objects  for  which  the  reorganiza- 
tion was  constituted.  Their  bill  in  equity  purports  to  recite  the 
history  covered  in  the  foregoing  pages.  It  conveys  a  total  misap- 
prehension of  nearly  every  essential  issue.  Misstatements  and 
inaccuracies  abound.  It  is  even,  in  part,  ungrammatical,  almost 
to  the  point  of  illiteracy.  From  the  standpoint  of  Federal  juris- 
diction, it  is  hopelessly  vicious  and   faulty. 

This  unique  pleading  was  presented  in  the  United  States  district 
court  to  Judge  David  P.  Dyer,  who  was  elevated  to  the  Federal 
bench  by  President  Roosevelt  shortly  after  bringing  the  second 
batch  of  indictments  against  Lewis  and  his  associates  while  United 
States  district  attorney  in  1907.  A  few  weeks  later  appeared  the 
following  editorial  in  Collier's  Weekly: 

A  judge  in  New  York  recently  endeavored  to  let  off,  without  punish- 
ment, a  man  convicted  of  rohl)ery,  although  the  prisoner  had  been  found 
guilty  several  times  before.  The  reason  for  the  judge's  sympathy  was 
that  a  Tammany  district  leader  had  stepped  into  court  at  the  psychological 
moment  and  made  known  his  wishes  to  the  gentleman  who  occupied  the 
sacred  seat  of  judgment.  Take  a  long  stride,  now,  muse,  and  descend 
upon  a  flourishing  city  near  wlierc  the  muddy  Missouri  adds  its  waters 
to  its  mighty  brother,  whereujjon,  together,  as  Father  of  Waters,  they 
continue  their  majestic  progress  to  the  gulf.    St.  Louis  has  not  yet  ceased 


THE  DREYFUS  CASE  OF  AMERICA  746 

to  blush  with  shame  and  disappointment,  since,  a  few  weeks  gone,  Theodore 
Roosevelt,  faithful  Republican,  with  eager  eye  to  retaining  Missouri  for 
the  sacred  party,  appointed  to  the  Federal  bench  a  lawyer  whose  greatest 
reputation  is  for  the  non-payment  of  his  debts.  Too  old  for  a  judicial 
appointment,  with  no  legal  standing  that  could  suggest  such  elevation, 
this  imfortunate  needed  the  place;  Senator  Warner  recommended  him. 
The  President,  ever  ready  to  make  political  chess-men  of  the  judiciary, 
took  one  more  step  to  increase  the  number  of  imworthy  judges  in  America. 
When  Mr.  Roosevelt's  place  in  history  is  finally  recorded,  no  glory  will 
be  added  by  the  chapters  which  shall  narrate  the  ruthless  consistency  with 
which  he  played  his  party  game,  to  the  greater  degradation  of  a  bench, 
his  respect  for  which  is  Benjamin  Harrison's  worthiest  memorial. 

The  character  of  counsel  who  brought  suit  for  receivership 
against  the  LeAvis  enterprises  may  be  inferred  from  the  following 
facts.  Attorney  Claude  D.  Hall,  leader  in  these  proceedings,  asso- 
ciated with  himself  one  Judge  S.  H.  King,  whom  he  brought  on 
from  Oklahoma  City,  alleging  that  King  had  special  knowledge 
of  receivership  matters.  The  court  records  of  St.  Louis  county 
disclose  in  what  this  special  knowledge  of  receivershiiD  questions 
consists.  King  first  brought  a  suit  in  the  United  States  court  at 
St.  Louis  to  throw  a  certain  company  into  the  hands  of  a  receiver. 
His  bill  was  dismissed  two  or  three  times.  He  then  brought  another 
suit  in  the  State  courts  of  St.  Louis  county.  A  receiver  was  ap- 
pointed. King  afterwards  asked  for  an  allowance  of  twenty-five 
thousand  dollars  for  bringing  this  suit.  An  investigation  of  the 
case  showed  that  the  total  assets  of  the  company  were  only  forty- 
four  thousand  dollars.  The  court,  in  its  opinion,  recited  that 
because  King's  entire  appearance  in  the  case  was  fraudulent  and  a 
deception  upon  the  court,  no  allowance  should  be  made. 

Judge  Dyer,  on  receipt  of  the  petition  in  the  Lewis  matter, 
averred  his  unwillingness  to  act  indiA'idually,  by  reason  of  his 
previous  activity  in  the  Lewis  cases  while  district  attorney.  So  he 
summoned  to  sit  jointly  with  him  in  this  proceeding,  Judge  Smith 
McPherson,  whose  opinion  denouncing  the  People's  Bank  has 
been,  since  1905,  a  conspicuous  feature  of  the  literary  campaign  of 
the  Postoffice  Department  throughout  the  Siege.  It  may  be  further 
observed  that  Judge  McPherson  then  had  pending,  under  advise- 
ment, a  question  of  jurisdiction  touching  the  libel  suits  of  the  Peo- 
ple's Bank  against  Fulton  and  Goodwin,  on  the  appeal  of  the  bank 
to  have  the  same  remanded  for  trial  in  the  State  courts.  This 
appeal  had  been  taken  in  the  fall  of  1907.  It  had,  therefore,  been 
under  advisement  by  the  learned  jurist  more  than  three  years. 
During  this  period,  the  defendants  had,  in  consequence,  been  effect- 
ually shielded  from  prosecution. 

On  the  arrival  of  Judge  McPherson  from  his  home  in  Red  Oak, 
la.,  these  two  unprejudiced  and  disinterested  jurists  sustained  the 
motion  of  Attorneys  Hall  and  King,  over  protests  of  attorneys 
for  the  reorganization.  They  thus  threw  the  properties  of  all  the 
Lewis  enterprises  and  the  individuals  mentioned  in  the  bill,  into 
the  hands  of  a  receiver.     The  sole  exceptions  were  the  American 


746  THE  SIEGE  OF  UNIVERSITY  CITY 

Woman's  League  and  the  Art  Museum  Society,  owner  of  the  Art 
Institute  of  the  League.  The  St.  Louis  Union  Trust  Company,  one 
of  the  M^ealthiest  and  most  responsible  financial  institutions  of  the 
entire  Southwest,  was  appointed  receiver.  Upon  inquiry  by  counsel 
for  the  trust  company,  it  develojDed  that  the  court  liad  acted  without 
jurisdiction,  and  that  its  order  was  unwarranted  and  illegal.  The 
court,  however,  not  only  granted  the  receivership,  but  indulged 
through  Judge  McPherson,  in  a  sweeping  denunciation  of  Lewis 
and  his  enterprises.  This  took  the  form  of  further  inajiposite 
allusion  to  the  Mississippi  Bubble,  in  language  similar  to  that  em- 
ployed in  his  previous  characterization  of  the  People's  Bank. 

The  refusal  of  the  St.  Louis  Union  Trust  Company  to  act  as 
receiver,  upon  the  ground  that  the  court  was  without  jurisdiction, 
placed  their  Honors  in  somewhat  of  a  quandary.  A  temporary  solu- 
tion was  arrived  at  by  the  appointment  of  Judge  Matthew  G. 
Reynolds,  of  counsel  for  the  reorganization,  as  receiver.  Since 
it  is  hoped  that  the  entire  relations  of  certain  of  the  Federal 
judiciary  to  the  Lewis  enterprises  (and  especially  the  recent  re- 
ceivership proceedings)  will  be  investigated  at  no  distant  date  by 
the  Judiciary  Committee  of  the  House  of  Representatives,  with  a 
view  to  such  further  action  as  may  be  deemed  proper,  comment  as 
to  this  appointment  is  reserved.  The  controller  for  the  reorganiza- 
tion, on  advice  of  his  attorneys,  recognizing  a  receivership  to  be 
inevitable  under  the  circumstances,  came  into  court  by  agreement 
of  counsel  and  presented  new  bills  in  such  form  as  to  make  the 
receivership  valid.  The  bill  of  attorneys  Hall  and  King  was  then 
vacated.  As  a  net  result,  all  the  Lewis  enterprises  are  now  in 
process  of  summary  liquidation. 

THE    TWELFTH    INDICTMENT. 

The  last  indictment  against  Lewis  was  drawn  upon  the  basis 
of  evidence  obtained  by  expert  accountants  from  his  books  and 
papers  and  by  the  inspectors,  under  authority  of  the  court,  after 
the  records  were  impounded  by  the  receiver.  The  indictment  was 
prepared  by  an  expert  from  the  office  of  the  attorney-general  at 
Washington,  Oliver  E.  Pagin,  who  compiled  the  charges  upon  which 
the  beef  packers  at  Chicago,  after  a  legal  battle  lasting  many 
years,  were  eventually  brought  to  trial.  Pagin  came  on  from  Wash- 
ington for  this  purpose  and,  presumably,  to  assist  the  district  at- 
torney and  Inspector  Swenson  to  force  the  voting  of  this  "true  bill" 
by  the  Federal  grand  jury.  A  large  number  of  investors  in  the 
Lewis  enterprises,  from  all  over  the  United  States,  were  subpoenaed 
as  witnesses.  A  woman  in  Oregon,  who  advised  the  inspectors  that 
she  had  no  complaint  to  off'er,  and  who  declined  to  obey  the  sum- 
mons, was  arrested  by  the  United  States  marslial  in  her  district  and 
compelled  to  appear  at  St.  Louis.  Persisting  that  she  had  never 
been  defrauded,  she  was  dismissed  (after  being  detained  several 
days  in  St.  Louis)  without  having  been  accorded  an  opportunity  to 
testify.     Only  those  willing  to  accept  the  interpretation  placed  upon 


THE  DREYFUS  CASE  OF  AMERICA  747 

Lewis*  conduct  by  the  inspectors  were  allowed  to  appear  before 
the  grand  jury.  Other  witnesses  were  former  employees  of  the 
Lewis  enterprises,  themselves  concerned  in  the  affairs  under  investi- 
gation, and  aware  that  they  would  have  been  equally  liable  to  in- 
dictment had  they  refused  to  turn  State's  evidence. 

The  manner  in  which  the  jury  to  try  this  indictment  was  im- 
paneled has  rarely,  if  ever,  been  paralleled.  The  United  States 
attorney  filed  a  formal  motion  asking  that  a  jury  be  drawn  from 
those  portions  of  the  eastern  division  of  the  Eastern  District  of  Mis- 
souri, outside  of  St.  Louis  city  and  county.  The  motion  that  "the 
fifty  good  and  lawful  men  who  shall  be  drawn  to  serve  as  petit 
jurors  in  the  trial  of  the  case  of  the  United  States  of  America  vs. 
Edward  G.  Lewis,  be  ordered  selected  from  among  those  residing 
outside  of  the  city  of  St.  Louis  and  county  of  St.  Louis,"  was 
based  upon  the  confessed  belief  of  the  United  States  attorney  that 
all  men  in  St.  Louis  city  and  St.  Louis  county  are  prejudiced  in 
favor  of  Lewis  and  against  the  Government  and  postal  officials. 
Mr.  Houts  sets  forth  the  claim  in  this  most  unique  document  that 
the  hearings  before  the  Ashbrook  Committee  in  St.  Louis  and  the 
reports  of  those  hearings  in  the  daily  newspapers  of  St.  Louis,  to- 
gether with  the  publications  in  which  Lewis  is  interested,  have 
"created  among  the  citizens  of  St.  Louis  county  and  the  city  of 
St.  Louis  a  prejudice  in  favor  of  the  defendant  (Lewis)  and 
against  the  officers  representing  the  United  States."  This  prayer 
for  protection  of  the  sovereign  power  of  the  guardians  of  the  Union 
against  an  irresponsible  and  "prejudiced"  citizenship,  was  duly 
granted  by  the  court.  An  order  was  issued  summoning  the  fifty 
jurors  from  a  section  outside  the  pale  of  the  alleged  baleful  influence. 

The  contents  of  the  indictment  itself  have  been  reserved  for  final 
consideration,  because  they  embrace  a  summary  and  review  of  prac- 
tically all  the  financial  transactions  whereby  Lewis  sought  to  re- 
habilitate his  ruined  enterprises.  All  these  are  charged  to  have 
been  designed  with  the  criminal  intent  of  procuring  the  money  and 
property  of  investors  by  false  and  fraudulent  misrepresentations 
sent  through  the  United  States  mails.  The  indictment  comprises 
four  groups,  of  Miree  counts  each.  Each  of  these  groups  would  have 
constituted  a  separate  bill  under  the  old  law.  It  therefore  repre- 
sents, in  effect,  four  indictments  in  one. 

One  of  these  groups  relates  to  the  sale  of  the  ten-months  seven 
per  cent  mortgage  notes  of  the  Lewis  Publishing  Company,  be- 
ginning on  March  10,  1908,  to  the  aggregate  of  six  hundred 
thousand  dollars.  These  purported  to  have  been  based  on  a  mort- 
gage of  one  hundred  and  fifty  thousand  dollars  against  the  Woman's 
National  Daily  Building  and  a  mortgage  of  four  hundred  and  fifty 
thousand  dollars  against  the  Woman's  Magazine  Building.  These 
counts  also  embrace  the  sale  of  additional  unsecured  notes  of  the 
Lewis  Publishing  Company,  alleged  to  have  been  falsely  misrep- 
resented as  having  been  secured.    Another  group  of  counts  concerns 


748  THE  SIEGE  OF  UNIVERSITY  CITY 

the  sale  of  certain  preferred  stock  of  the  Lewis  Publishing  Com- 
pany in  the  fall  and  winter  of  1908  and  1909.  These  allege  the 
misrepresentations  of  the  then  existing  status  of  the  company's  af- 
fairs. A  third  group  has  to  do  with  the  sale  of  certain  six  per  cent 
notes  of  the  University  Heights  Company.  These  counts  allege 
misrepresentations  touching  the  security  for  these  notes.  Some  of 
these  are  alleged  to  have  been  falsely  offered  as  being  mortgage 
notes,  though  actually  not  th\is  secur(>d.  Other  misrepresentations 
are  alleged  as  to  the  purposes  for  which  the  funds  thus  obtained 
were  intended.  The  fourth  group  touches  upon  the  so-called  Build- 
ers' Fund  debentures,  first  offered  for  sale  in  an  article  called 
"The  Solution,"  in  the  Woman's  National  Daily  of  July  27,  1910. 
The  whole  design  of  the  debentures  is  charged  in  the  indictment  as 
having  been  criminally  fraudulent  from  its  inception. 

THE    THIRD    TRIAL. 

The  session  of  Congress  was  drawing  raj^idly  to  a  close.  A 
presidential  campaign  was  impending.  An  early  report  from  the 
investigating  committee  was  anticipated.  The  desirability,  from 
.the  standi^oint  of  the  prosecution,  of  an  early  trial  and  a  prompt 
conviction  was  only  too  apparent.  Acordingly,  every  resource  of 
the  PostofP.ce  Department  and  the  Department  of  Justice  was  mar- 
shaled and  brought  to  bear  against  the  accused.  A  large  number  of 
the  witnesses  summoned  before  the  grand  jury  were  again  sub- 
poenaed, with  the  addition  of  numerous  others.  A  small  group  of 
Lewis'  most  virulent  critics  among  the  women  summoned  were  in- 
formally emjiloyed  by  the  prosecuting  attorneys  and  inspectors  to 
assist  in  the  preliminary  weeding  out  and  coaching  of  Govern- 
ment witnesses.  All  those  unwilling,  after  argument  by  the  prose- 
cuting attorney,  the  inspectors  and  their  aides  among  the  witnesses 
themselves,  to  accept  the  interpretation  placed  upon  Lewis'  conduct 
by  the   indictment,   were  excluded   from  the   stand. 

The  prosecution,  having  bronght  to  St.  Louis,  out  of  the  many 
thousands  of  investors  in  the  Lewis  enterprises,  some  fifty  or  sixty 
persons,  thinking  that  they  could  be  persuaded  to  accept  tlie  theory 
that  Lewis  is  a  criminal,  culled  from  that  number  a  handful  of 
pitiful  instances  of  distress  due,  in  part,  to  loss  of  money  invested 
in  Lewis'  enterprises.  A  deliberate  effort  to  work  upon  the  sym- 
]>athies  of  the  jury  was  manifest.  The  aged,  the  crippled,  the 
widowed,  the  retired  clergyman,  in  short,  the  special  types  of  suf- 
ferers deemed  best  calculated  to  appeal  to  the  emotions  and  preju- 
dices of  the  jurors,  were  selected.  All  were  carefully  picked  out  with 
a  view  to  the  testimony  that  was  required  of  them.  The  purport 
of  their  version  of  the  facts  was  that  they  believed  themselves  to 
have  been  deceived  and  defrauded  by  Lewis'  representations.  A 
Government  expert  accountant  was  placed  upon  the  stand,  to  show 
what  purported  to  be  the  facts  of  record  exhibited  by  the  books 
of  account  of  the  Lewis  enterprises.  The  former  treasurer  and 
secretary  of  the  company,  and  also  the  former  chairman  of  the  board 


THE  DREYFUS  CASE  OF  AMERICA  749 

of  directors  of  tlie  People's  Savings  Trust  Company  and  chairman 
of  the  trustees  of  the  American  Woman's  League,  were  likewise 
examined. 

The  theory  of  the  prosecution  was  that  Lewis  had  deliberately 
misrepresented  the  actual  condition  of  his  various  enterprises  for 
the  purpose  of  borrowing  money  with  which  to  forestall  or  post- 
pone his  inevitable  ruin.  More  than  an  entire  month  was  con- 
sumed by  the  prosecution.  Somewhat  less  than  half  that  length 
of  time  was  taken  by  the  defense.  This  is  not  the  place  in  which 
to  review  the  trial  in  its  entirety.  Suffice  it  to  say  that  Lewis' 
defense  consisted  chiefly  in  his  belief  that  his  project  for  the 
building  of  a  subway  at  St,  Louis,  and  for  the  development  of  his 
University  Heiglits  properties  as  an  ideal  city  beautiful,  justified 
his  representations  touching  the  notes  of  the  University  Heights 
Company,  and  that  the  project  of  the  American  Woman's  League 
similarly  justified  his  representations  touching  the  notes  and  pre- 
ferred stock  of  the  Lewis  Publishing  Company. 

Other  witnesses  for  the  defense  testified  to  the  values  of  his  real 
estate  holdings  and  publications,  and  especially  to  the  value  of  the 
American  Woman's  League  as  a  magazine  subscription  agency.  The 
whole  story  of  the  League,  embracing  all  the  activities  of  the  Peo- 
ple's University,  was  presented  by  many  witnesses.  The  eifects 
of  the  attacks  of  the  Rural  New  Yorker  were  described  by  Lewis, 
by  members  of  the  headquarters  organization,  and  by  State  Regents 
called  in  from  the  field.  The  jury  was  thus  definitely  advised  of 
the  nature  of  Lewis'  activities  and  of  the  attacks  made  upon  them. 
The  last  two  days  of  the  trial  were  devoted  to  the  usual  closing 
arguments  of  counsel.  Eight  hours  were  alloted  to  this  purpose. 
The  opening  argument  for  the  Government  was  made  by  Assistant 
United  States  Attorney  Homer  Hall.  He  was  followed  by  Judge 
Shepard  Barclay.  Patrick  H.  Cullen  then  summed  up  for  the  de- 
fense. United  States  Attorney  Charles  A.  Houts  made  the  final 
plea  for  the  Government. 

THE    court's    charge    AND    ARGUMENT    FOR   THE    PROSECUTION. 

Judge  Amidon  then  arose  from  the  bench  and  made  his  way 
down  from  his  rostrum,  past  the  press  table  and  jury  box,  and  up 
into  the  witness  stand.  The  chairs  of  the  jurors,  meantime,  had 
been  grouped  before  the  witness  stand  at  a  more  comfortable  angle. 
The  court  then  delivered  a  charge  practically  demanding  the  con- 
viction of  the  defendant  upon  every  count  in  the  indictment.  His 
Honor  consumed  two  and  three-quarters  hours  in  his  charge  and 
argument  for  the  prosecution.  He  analyzed  in  complete  detail 
the  entire  indictment.  He  reviewed  the  testimony,  drawing  the 
attention  of  the  jury  to  his  recollection  of  what,  in  his  opinion, 
constituted  evidence  pointing  logically  toward  conviction.  His  Honor 
completely  distanced  the  relatively  feeble  efforts  of  the  United 
States  attorney  in  his  presentation  of  what  he  seemed  to  regard 
as   the   most   damaging   aspects   of   the    Government's   case.      His 


750  THE  SIEGE  OF  UNIVERSITY  CITY 

effort  was  masterly  in  the  acumen  of  its  logic  and  in  the  perspicuity 
of  its  comment  and  deduction.  His  Honor  evidently  had  pre-de- 
termined  the  case  and  now  strenuously  sought  to  impress  upon  the 
jury  the  duty  of  finding  a  verdict  corroborative  of  the  court's 
opinion. 

During  the  delivery  of  Judge  Amidon's  charge,  one  of  the  spec- 
tators was  observed  to  catch  the  eye  of  a  friend  in  the  court  room 
and  then  draw  his  finger  significantly  across  his  throat  from  ear  to 
ear.  This  bit  of  pantomine  symbolizes  more  eloquently  than  could 
any  form  of  language,  the  impression  produced  by  the  court's  re- 
marks upon  the  minds  of  all  present.  A  newspaper  man  was  heard 
to  remark  as  the  jury  was  filing  out  of  the  courtroom  at  the  close 
of  the  trial:  "If  a  man  had  not  heard  Judge  Amidon's  argument 
for  the  prosecution  he  might  not  have  known  which  side  of  the 
case  he  was  really  on." 

The  jury  retired  at  the  close  of  the  judge's  charge  on  the  evening 
of  Friday,  April  12,  at  six  o'clock.  The  general  opinion  about 
the  court  room  was  that  it  would  either  bring  in  promptly  a  verdict 
for  conviction,  in  obedience  to  the  judge's  charge,  or  that  there 
would  be  a  mistrial.  In  view  of  the  court's  instructions  to  the  jury, 
an  acquittal  was  regarded  as  impossible.  At  6:30,  the  jury,  having 
found  that  an  immediate  verdict  was  out  of  the  question,  was  taken 
to  dinner.  It  then  resumed  its  deliberations.  At  10  o'clock,  the 
jury  was  locked  up  for  the  night.  All  during  Saturday,  Sunday 
and  Monday  following,  the  deadlock  continued.  There  was  no 
word  from  the  jury  room.  Finally,  at  three  o'clock  on  ]\Ionday 
afternoon,  the  court  sent  for  the  jury.  Accosting  the  foreman.  His 
Honor  desired  to  know  if  he  could  be  of  any  further  assistance  to 
the  jury  in  its  deliberations.  The  foreman  plainly  responded  in 
the  negative.     The  official  record  of  this  incident  is  as  follows: 

The  Court:  Gentlemen,  have  you  agreed  upon  a  verdict.'  You  may 
answer  by  your   foreman. 

Tjie   Foreman:     We  have  not. 

The  CorRT:  Is  there  anything  further  that  I  can  do  for  you  to  aid 
you  in  arriving  at  a  verdict? 

The   Foreman:     No,  sir. 

The  Court:     Gentlemen  of  the  jury 

Mr.  Barclay:  Pardon  me,  your  Honor,  I  didn't  hear  the  answer  of 
the   foreman  to  your   question. 

The  Court:     He  said,  "No,  sir." 

Notwithstanding  the  attitude  of  the  jury  as  voiced  by  its  fore- 
man, His  Honor  resumed  his  former  position  in  the  witness  stand 
and  devoted  an  additional  hour  and  a  half  to  a  further  review  of 
the  evidence  and  argument  for  a  verdict  of  conviction.  Thus,  in 
all,  the  court  consumed  more  time  than  counsel  for  either  the  de- 
fense or  prosecution.  His  Honor's  combined  charge  and  argument 
fearfully  weighted  the  scales  of  justice  against  the  accused. 

When  the  jury  retired,  conviction  was  gcneralh'^  deemed  inevit- 
able. At  four  o'clock,  however,  when,  after  notice  to  the  court, 
the  jury  filed  into  the  court  room  to  make  its  final  report,  it  was  ap- 


THE  DREYFUS  CASE  OF  AMERICA  751 

parent  to  all  present  that  no  verdict  of  conviction  had  been  reached. 
The  solemnity  which  such  a  finding  is  wont  to  impress  upon  the 
countenances  of  jurymen,  was  wholly  lacking.  On  the  contrary,  as 
the  defendant  intently  scanned  the  faces  of  the  men  in  whose  hands 
la}"-  an  issue  so  momentous,  members  of  tlie  jury  were  observed  to 
catch  his  eye  and  smile.  With  this  the  defendant  settled  back  in 
his  chair  with  a  long  sigh  of  evident  relief.  The  issue  M'as  not 
long  in  doubt.  Asked  by  the  court  if  the  jury  had  agreed  upon  a 
verdict,  the  foreman  responded  that  it  had  not.  Asked  if  in  his 
opinion,  it  was  possible  for  the  jurors  to  so  agree,  he  replied,  "No!" 
Asked  if  they  concurred  in  their  foreman's  opinion,  members  of  the 
jury  assented  vigorously.  The  court  thercuijon  dismissed  the  jury. 
The  trial  was  at  an  end. 

The  St.  Louis  Star,  on  the  day  following  the  delivery  of  Judge 
Amidon's  second  charge  to  the  jury,  commented  editorially  upon 
the  court's  apparent  determination  to  force  the  jury  to  bring  in 
a  verdict  of  guilty.     It  said: 

Such  scenes  as  were  witnessed  in  the  Lewis  trial  have  never  before  been 
enacted  in  a  courtroom  in  St.  Louis.  Federal  employees,  anxious  to  please 
their  superiors  and  hold  their  jobs,  or  get  better  ones,  have  resorted  to 
every  scandalous  method  to  brow-beat  witnesses,  to  exclude  testimony, 
and  to  bring  about  a  conviction.  Nor  was  this  eagerness  less  plain  on  the 
bench  than  on  the  part  of  the  prosecuting  officers  and  the  machievellian 
manipulators  behind  the  scenes.  Attornejs  of  repute  at  the  bar  say  they 
have  never  before  witnessed  such  conduct  or  such  unfairness  in  a  United 
States  court  as  was  shown  by  Judge  Amidon.  With  all  the  titanic  forces 
of  the  Government  wielded  so  desperately  by  vindictive  and  unfair  officials, 
the  fact  that  it  was  impossible  to  convict  Mr.  Lewis  is  the  strongest  pos- 
sible testimony  to  his  innocence  of  the  charges  brought  against  him. 

Not  content  with  showing  animosity  and  prejudice  during  the  entire 
course  of  tlie  trial.  Judge  Amidon  practically  made  an  argument  for  the 
prosecution  wlien  he  deHvered  his  charge  to  the  jury.  This  is  not  so 
apparent  in  a  calm  reading  of  the  text  of  his  charge,  though  that  shows 
a  strong  leaning  towards  conviction.  His  manner  was  most  significant. 
It  was  intended  to  impress  the  jury  with  the  judge's  own  conviction  of  Mr. 
Lewis'  guilt.  Then,  on  Monday  morning,  after  the  jury  had  been  out  two 
days,  and  in  spite  of  the  fact  that  the  foreman  said  no  further  advice 
was  desired,  he  argued  to  the  jury  for  more  than  an  hour  that  it  was  its 
duty  to  bring  in  a  verdict,  and  that  such  a  verdict  could  be  nothing  else 
than  a  conviction.  That  this  argument  had  no  effect  upon  the  final  action 
of  the  jury  does  not  lessen  the  gravity  of  this  departure  from  strict 
judicial  fairness. 

There  are  enough  men  of  high  purpose,  great  legal  attainments  and 
strength  of  character  to  fill  the  Federal  and  State  benches.  It  is  not 
necessary  to  retain  on  them  men  who  do  not  measure  up  to  these  standards. 
When  a  mistake  is  made  in  putting  prejudiced  men  upon  the  bench,  some 
other  method  than  that  of  impeachment  would  at  times  be  desirable  for 
rectification  of  the  error.  Mr.  Lewis  has  no  interest  in  or  control  of  this 
newspaper.  What  The  Star  has  to  say  about  the  way  this  case  has  been 
handled  by  the  prosecuting  forces  is  dictated  by  a  love  of  justice,  and  by 
knowledge  of  the  details  of  the  long  persecution  to  which  he  has  been 
subjected.  This  enables  us  to  realize  and  understand  its  animus,  vindic- 
tiveness  and  unscrupulous  nature  more  fully,  perhaps,  than  others  have 
been  able  to  do. 


762  THE  SIEGE  OF  UNIVERSITY  CITY 

The  close  of  Lewis'  third  trial  brings  the  history  of  the  Siege 
of  University  City  down  to  the  present.  The  last  assault  upon 
Lewis  and  his  enterprises,  embracing  the  receivership  proceedings; 
the  last  indictment  and  the  conduct  of  Federal  Judge  Amidon 
throughout  the  trial — especially  his  closing  charge  and  argument 
for  the  prosecution — sets  the  capsheaf  on  that  seven  years'  war 
by  two  Federal  Administrations  against  a  private  citizen.  There 
can  be  no  impropriety  in  thus  characterizing  the  Siege.  The  term 
"war"  has  repeatedly  been  applied  to  these  proceedings  upon  the 
floor  of  the  United  States  Senate.  Senator  William  J.  Stone  of 
Missouri,  has  responded  on  more  than  one  occasion,  to  Lewis'  ap- 
peals for  aid  in  his  defense  against  the  allied  forces  of 
State  and  Nation.  On  one  occasion,  in  an  address  to  the  Senate. 
Mr.  Stone  said:  "There  is  a  citizen  of  my  State,  a  publisher,  a 
Mr.  Lewis,  whose  case  has  become  a  celebrated  one.  For  some 
reason  the  Postoffice  Department  has  waged  war  upon  him."  We 
are  now  to  sum  up  briefly,  in  concluding  our  story,  the  events  of 
the  five  years  since  the  exclusion  of  Lewis'  publications  from  tlie 
mails,  as  told  by  him  on  the  witness  stand  at  his  recent  trial. 

DELENDA    EST    CARTHAGO. 

There  is  an  old  Roman  story  to  the  effect  that  the  elder  Cato, 
for  many  years,  concluded  every  speech  made  by  him  in  the  Roman 
Senate  with  the  phrase,  "Delenda  est  Carthago;"  Carthage  must 
be  blotted  out!  Says  the  Historian  Florus:  "Cato,  with  inex- 
piable hatred,  was  accustomed  to  declare,  even  when  another  sub- 
ject was  the  one  under  discussion,  that  Carthage  must  be  de- 
stroyed."* Such  appears  to  have  been  the  policy  of  Cortelyou  and 
his  aides,  especially  Goodwin  and  P'ulton.  Such  appears  to  have 
become  the  fixed  policy  of  the  Postoffice  Department  concerning 
Lewis  and  his  enterprises.  University  City  must  be  blotted  out ! 
The  sequel  of  the  old  Roman  story  is  summed  up  in  a  phrase 
which  has  become  a  byword,  eloquent  of  desolation,  "Scipio  mourned 
over  the  ruins  of  Carthage."  The  story  goes  on  to  relate  how  the 
ancient  metropolis  of  northern  Africa,  mistress  of  the  seas,  proud, 
rich  and  populous,  at  the  close  of  the  third  Punic  War,  was  at  last 
conquered  by  Rome.  The  inhabitants,  by  the  hundreds  of  thous- 
ands, were  put  to  the  sword  or  sold  into  slavery.  The  city  was 
razed.  The  very  site  was  sown  with  salt  in  order  that  no  green 
thing  might  spring  up  on  the  detested  spot.  The  stern  Roman 
conquerer,  Scipio,  gazing  upon  the  smouldering  ruins,  seemed  to 
read  in  them  the  fate  of  Rome,  and,  bursting  into  tears,  sadly 
repeated  the  lines  of  Homer: 

"The  day  shall  come  in  which  our  sacred  Troy 
And  Priam,  and  the  people  over  whom 
Spear-bearing  Priam  rules,  shall  perish  all." 


*"Cato,   inexpiabili   odio,  ilelenJam  esse   Carthaginem,  et  cum   de  alio  consuleretur, 
pronun  tiabat." 


THE  DREYFUS  CASE  OF  AMERICA  753 

One  might  hope  that  even  Cortelyou  himself,  who,  like  Cato  of 
old,  first  espoused  the  policy  "Delenda  est  Carthago"  and  his  aides 
or  their  successors,  in  the  execution  of  that  policy,  might  be  touched 
by  a  close  view  of  the  desolation  they  have  caused.  One  could 
even  imagine  that  Swenson,  the  postoffice  inspector,  who,  like 
Scipio,  bore  the  commission  of  leader  iu  the  final  campaign  which 
has  resulted  in  the  destruction  of  University  City,  might  mourn 
over  the  ruin  which  his  own  hand  has  wrought. 

Lewis  at  the  conclusion  of  his  recital  to  the  congressional  inquis- 
itors of  the  story  of  the  People's  Bank,  made  this  impassioned 
declaration:  "I  am  not  today  convinced,  nor  has  the  power  of  two 
Federal  administrations, — backed  by  the  power  of  the  secret  service 
of  the  Nation,  the  misrepresentations  of  a  subsidized  press,  and  the 
ex  parte  statements  of  judges  and  Department  heads — convinced  the 
people  of  the  United  States,  that  the  People's  United  States  Bank 
was  a  fraud.  The  blood  of  that  bank  will  cry  out  to  Heaven  until 
this  wrong  is  righted."  The  officials  of  the  two  past  Republican 
Administrations  by  whom  the  destruction  of  University  City  has 
been  encompassed,  may  well  see  in  its  ruin  the  image  of  their  own 
fate,  when  the  blood  of  the  People's  Bank  and  the  Woman's  Maga- 
zine shall  be  required  of  them,  as  Scipio  saw,  in  the  ruins  of  Car- 
thage, a  symbol  of  the  fate  of  Rome. 

We  have  seen,  in  the  bright  picture  of  World's  Fair  days,  the 
Woman's  Magazine,  the  People's  Bank,  the  University  Heights  com- 
pany, and  all  the  other  enterprises  of  University  City,  in  the  hey- 
day of  their  great  prosperity.  We  have  witnessed  the  ravages  of 
the  first  two  years'  campaign  of  bitter  warfare.  We  have  traced 
the  story  of  the  criminal  prosecution,  or  persecution,  of  Lewis 
which  ensued.  In  order  that  we  may  appreciate  the  full  extent  of 
the  damage  which  the  Siege  has  wrought,  it  now  becomes  neces- 
sary to  review  briefly  the  story  of  Lewis'  last  brilliant  rally.  We 
shall  see  that  for  a  moment  it  seemed  he  would  be  successful.  Came 
then  the  last  assault  of  the  Federal  forces  and  their  allies.  Fol- 
lowed swiftly  the  final  catastrophe  and  complete  disaster. 

The  newspaper  men,  who  commented  upon  the  arraignment  of 
Lewis  by  Judge  Krum  following  the  latter 's  unsuccessful  cross-ex- 
amination of  Lewis  at  his  first  trial,  remarked  that  the  defendant 
was  seemingly  taking  notes  of  the  great  prosecutor's  argument. 
They  observed,  however,  that  he  looked  up  and  smiled 
strangely,  now  and  again,  when  the  denunciation  of  counsel  for  the 
Government  became  especially  noisy.  The  expression  of  Lewis' 
countenance  which  puzzled  newspaper  men  was  due,  he  avers,  to 
the  circumstance  that  he  was  not,  in  fact,  intent  upon  the  argu- 
ment of  counsel,  but  was  engaged  in  writing  the  initial  prospectus 
of  the  American  Woman's  League.  With  characteristic  optimism, 
Lewis  was  already  anticipating  his  acquittal.  No  sooner  had  the 
evidence  touching  the  destruction  of  his   former  enterprises  been 


754  THE  SIEGE  OF  UNIVERSITY  CITY 

submitted  to  the  jury  than  ]iis  back  was  turned  to  the  dead  past  and 
his  mind  became  busy  with  problems  of  the  living  present  and  an- 
ticipated future.  The  nervous  tension  and  mental  exaltation  gen- 
erated in  him  during  the  great  trial  by  the  attrition  of  wits  in  the 
sword  play  of  court,  counsel  and  witnesses,  had  again  brought  him 
to  a  white  heat  of  constructive  imagination,  similar  to  that  in 
which  he  devised  the  People's  Bank.  This  had  resulted  in  one  of 
those  rare  flashes  of  intuition,  penetrating  deeply  into  the  heart 
of  complex  social  and  economic  problems,  which,  like  the  ten-cent 
price  of  the  Woman's  Magazine,  the  purchase  of  the  site  of  Uni- 
versity City,  and  the  recognition  of  the  possibilities  of  the  fibre 
stopper,  are  so  characteristic  of  Lewis'  genius. 

THEORY  OF  THE  LEAGUE. 

Lewis  unquestionably  believed  the  American  Woman's  League 
would  be  the  instrumentality  which  would  work  a  solution  of  his 
financial  and  business  problems  and  enable  him  to  rehabilitate  all 
his  enterprises.  But  no  man  could  then  have  been  found  in  the 
United  States  to  share  with  him  this  optimistic  forecast.  The 
greatest  changes  inimical  to  Lewis'  interests  had  taken  place  in  the 
publishing  industry.  The  general  tendency  toward  higher  prices 
for  all  commodities,  made  notorious  by  the  phrase  "the  increased 
cost  of  living,"  then  began  to  be  felt  by  the  publishers  of  magazines. 
The  cost  of  everything  that  entered  into  the  making  of  a  periodical 
began  to  increase.  Prices  were  gradually  raised  by  all  publishers. 
Competition  took  on  a  keener  edge.  The  periodicals  sought  to 
justify  their  increase  in  prices  by  attracting  the  best  in  mechanical, 
art  and  editorial  values.  The  day  of  the  cheap  magazine  had 
passed.  The  ten-cent-a-year  subscription  price  of  the  Woman's 
Magazine,  which  had  been  in  its  time  one  of  Lewis'  most  brilliant 
intuitions,  was  now  a  thing  all  but  impossible.  Lewis  was  called 
upon  to  face  a  new  era  in  the  publishing  industry.  The  exclusive 
field  which  the  Woman's  Magazine  had  dominated  as  a  leader  of 
the  mail  order  publications  in  the  United  States,  was  his  no  longer. 
What,  then,  was  the  course  of  reasoning  by  which  he  persuaded 
himself  that  he  could  overcome  all  these  adverse  conditions  and 
resume  his  former  ])lace  among  the  leading  publishers  of  the  world? 

Lewis  has  told  the  story  of  the  American  Woman's  League  upon 
many  occasions,  but  never  more  effectively  than  while  on  the  wit- 
ness stand  during  his  latest,  and,  it  is  to  be  hoped,  his  final  trial. 
Limitations  of  space  forbid  the  reproduction  of  his  testimony,  but 
it  may  here  be  briefly  summarized.  Those  who  deny  Lewis  the 
tribute  of  admiration  due  his  genius,  should  ponder  thoughtfully 
the  story  of  the  American  Woman's  Leagme.  For  here,  once  more, 
Lewis  has  projected  one  of  his  rare  and  penetrating  glances  of  in- 
sight into  the  heart  of  an  infinitely  complex  ])roblem.  He  has  per- 
ceived herein  a  true  solution  comparable  to  his  former  insights,  the 
ten-cent-a-year  price  on  the  Woman's  Magazine  and  the  computa- 


THE  DREYFUS  CASE  OF  AMERICA  755 

tion  that  six  times  one  makes  six,  wliich  led  to  the  founding  of  Uni- 
versity City. 

The  American  Woman's  League,  in  theory,  solves  two  most  com- 
plex and  far-reaching  problems ;  one  economic,  the  other  social  and 
political.  To  American  periodical  publishers  the  League  proposes 
an  adequate  solution  of  the  problem  of  organizing  a  national  sub- 
scription-gathering and  subscription-renewing  organization.  To 
the  vast  mass  of  American  wom.en,  now  profoundl}'  stirred  by  the 
vital  touch  of  a  new  birth  of  freedom,  it  proposes  an  adequate 
means  of  securing  the  kind  of  education  and  training  which  alone 
can  insure  to  them  the  proper  use  of  their  new-found  liberties.  All 
this  it  proposes  to  accomplish  by  a  very  simple  process  of  co-opera- 
tion, which  rests  upon  a  thorouglily  sound  and  self-supporting 
economic  basis.  The  evidence  of  the  need  of  some  such  plan  upon 
the  part  of  botli  publishers  and  progressive  women,  respectively,  is 
found  in  their  immediate  and  eager  response.*  No  phenomenon  in 
recent  American  social  history  is  of  greater  interest  than  the  as- 
tonishingly rapid  rise  and  development  of  the  American  Woman's 
League.  It  is  improbable  that  any  other  voluntary  social  organiza- 
tion has  ever  enrolled  an  equal  number  of  members  within  so  brief 
a  time.  Certain  it  is  that  no  secular  organization  of  men  or  women 
ever  entertained  higher  ideals,  developed  a  spirit  of  devotion  more 
loyal,  or  within  the  first  few  j'ears  of  its  existence  accomplished  a 
greater  measure  of  social  uplift.  The  achievements  of  the  Amer- 
ican Woman's  League  in  membership,  in  revenue,  in  the  creation  of 
the  People's  University  and  the  Art  Institute  at  University  City, 
and,  above  all,  in  its  first  convention  of  June  10-11,  1910,  are  be- 
lieved to  be  unparalleled  in  the  entire  history  of  voluntary  social 
orffanizations. 


*The  first  group  of  publications  to  be  associated  with  the  American  Woman's 
League  consisted  of  the  following  well-known  magazines,  viz:  EVIJRVBODY'S, 
COLUKR'S  WEEKLY,  DELINEATOR,  SUCCESS  MAGAZINE,  FARM  JOUR- 
NAL, AMERICAN  BOY.  Following  are  the  Class  "A"  publishers  subsequently  asso- 
ciated with  the  League:  Atlanta,  Ga.,  Journal-Record  of  Medicine,  Motor  Era; 
Boston,  Mass.,  Everyday  Housekeeping,  Modern  Priscilla;  Bai^timore,  Md.,  National 
Contractor  and  Builder,  Progressive  Stenographer;  Chicago,  American  Educational 
Review,  American  Food  Journal,  Health  and  Happiness,  Fine  Arts  Journal,  Opportu- 
nity, Popular  Electricity,  Real  Estate  News,  Technical  World  Magazine.  Vegetarian 
Magazine,  Western  Review,  Music  News,  Live  Stock  Journal,  Modern  Painter; 
Cleveland,  Inland  Grocer;  Cincinnati,  Lancet  Clinic;  Columbus,  Ohio,  Advertising 
World,  Columbus  Medical  Journal;  Cooperstown,  N.  Y.,  American  Motherhood,  Table 
Talk;  Dallas,  Texas,  American  Home  Journal;  Denver,  Daily  Mining  Record,  Motor 
Field,  Western  World;  Detroit,  American  Boy,  Beach's  Magazine  of  Business,  Gate- 
way, Stellar  Ray;  Elgin,  III.,  Mothers'  Magazine;  Florence,  Mass.,  Home  Necdle^ 
work  Magazine;  Holyoke,  Mass.,  Nautilus;  JacksOnvilt.e,  Fla.,  Florida  Review; 
Libertvville,  III.,  Sheldon's  Business  Philosopher  and  Salesmanship;  Lincoln,  Neb, 
Campbell's  Scientific  Farmer;  Lisbon,  N.  D.,  North  Dakota  Farmer,  Rotary,  West- 
land  Educator;  Memphis,  Tenn.,  Men  and  Women;  Minneapolis,  Farm  Stock  and 
Home;  Morgantown,  W.  Va.,  West  Virginia  Farmer;  Nashville,  Tenn.,  Progressive 
Teacher,  Taylor-Trotwood  Magazine;  New  York,  Amateur  Sportsman,  American 
City,  House  Beautiful,  Housewife,  International  Studio,  Illustrated  Milliner,  L'Art  de 
la  Mode,  Metropolitan  Magazine,  Pearson's  Magazine,  Pictorial  Review.  Putnam'i 
Magazine,  Simmons  Magazine,  Success  Masazine,  Review  of  Reviews,  Smart  Set, 
Travel  Magazine,  Young's  Magazine,  Health  Magazine;  Niagara  Falls,  N.  Y., 
Aquarius;  Oklahoma  City,  Okla.,  Sturm's  Oklahoma  Magazine;  Passaic,  N.  J., 
Health  Culture;  Peotone,  III.,  Poultry  Magazine,  Pigeons;  Philadelphia,  Business 
America,  Lippincott's  Magazine,  National  League  Barber,  Stenographer;  Portland, 
Ore.,  Pacific  Monthly;  St.  Louis,  American  Paint  and  Oil  Dealer;  Salem,  Mass., 
Little  Folks'  Magazine;  San  Francisco,  Orchard  and  Farm,  Sunset  Magazine;  Smeth- 
PORT,  Pa.,  Boys'  Magazine;  Time,  Pa.,  Paris  Modes;  Wilmington,  Dei,.,  New  Amstel 
Magazine. 


756  THE  SIEGE  OF  UNIVERSITY  CITY 

The  essential  basis  of  tlic  American  Woman's  League  is  most 
simple.  There  are,  throughout  the  United  States,  perhaps  a  half 
million  clubs  and  other  local  voluntary  organizations  of  women 
which  have  for  their  object  individual  and  social  betterment.  The 
keynote  of  all  their  activities  is  co-operation.  Their  common  ideal 
is  advancement  in  culture  for  themselves  and  their  communities. 
By  way  of  contrast,  it  may  be  observed  that  the  aggregate  num- 
ber of  men's  clubs  of  all  descriptions  is  enormously  greater,  and 
that  with  some  notable  exceptions, — such  as  the  Young  Men's  Chris- 
tion  Association,  sundry  religious  organizations,  and  the  like, — the 
principal  purpose  of  these  clubs  is  social  recreation.  Their  ac- 
cepted ideal  is  good  fellowship.  The  presumption  is  very  strong 
that  if  they  were  not  convenient  devices  for  evading  or  counter- 
acting the  rajDidly  increasing  public  sentiment  against  the  sale  and 
use  of  spirituous  beverages,  a  majority  of  all  the  men's  social  clubs 
in  existence  would  be  disbanded.  Tlie  contrast  between  the  ideals 
of  women's  clubs  in  general  and  the  lack  of  any  such  spiritual  and 
moral  quality  in  kindred  organizations  for  men,  serves  to  accen- 
tuate the  disparity  of  their  equipment.  For  the  entire  women's 
club  movement  of  the  United  States  has  produced  only  a  score  or  so 
of  club  houses,  whereas  the  number  of  costly  and  elegant  build- 
ings devoted  to  men's  social  organizations  throughout  the  United 
States  is  legion.  In  no  respect  is  the  injustice  of  the  economic 
dependence  of  women  more  forcibly  illustrated. 

In  projecting  the  American  Woman's  League,  Lewis  proposed 
that  the  members  of  women's  organizations,  and  others,  should 
unite  for  the  purpose  of  acting  as  a  subscription-gathering  and  re- 
newing organization  for  a  group  of  co-operating  publishers  of 
popular  periodicals.  .  Women  are  the  principal  readers  of  current 
literature.  Most  annual  subscriptions  to  periodicals  are  made  by 
women,  rather  than  by  the  male  members  of  their  families.  Most 
publishers  operate  through  the  mails  upon  a  national  scale.  Each 
must  organize  some  form  of  national  subscription-getting  machin- 
ery. The  cost  of  circularization,  already  excessive,  tends  to  be- 
come greater  as  tlie  returns  diminish  through  increase  of  competi- 
tion. The  process  of  advertising  one  periodical  in  the  columns  of 
another  most  often  results  in  an  exchange  of  subscribers  among  the 
periodicals  concerned,  rather  than  enlarges  the  actual  number 
of  readers.  The  only  remaining  method  of  collecting  and  renew- 
ing periodical  subscriptions,  namely  the  organization  of  a  force  of 
local  representatives,  is  likewise  limited,  by  the  law  of  diminishing 
returns,  to  a  small  number  of  the  largest  and  most  profitable  per- 
iodicals. In  the  absence  of  some  such  co-operative  agency  as  that 
suggested  by  Lewis,  the  logical  tendency  of  the  periodical  pub- 
lishing business  is  thus  toward  monopoly.  A  very  wealthy  publisher 
can  organize  a  national  sales  force  of  his  own.  One  or  more  of  his 
most  prosperous  competitors  may  be  able  to  imitate  his  example. 
But  the  cfFect  of  this  process  obviously  must  be  internecine  com- 


THE  DREYFUS  CASE  OF  xVMERICA  767 

petition  among  the  leading  half-dozen  publishers.  The  result  must 
be  that  inducements,  absolutely  prohibitive  to  the  owners  of  less 
prosperous  periodicals,  will  soon  be  oifered  to  agents  for  their 
services. 

Lewis  was  the  first  to  propose  an  arrangement  whereby  the 
women  readers  of  periodicals  in  every  locality  should  organize  into 
a  co-operative  group  and  make  themselves  responsible  for  the  sub- 
scription business  of  a  corresponding  co-operative  group  of  pub- 
lishers. He  further  proposed  the  principle  of  collective  rewards  as 
a  substitute  for  that  of  individual  compensation.  This,  indeed,  is 
the  essentia]  principle  of  the  American  Woman's  League.  At  pres- 
ent, publishers  are  accustomed  to  compensate  their  subscribers 
and  agents  by  means  of  premiums,  or  by  cash  commissions.  The 
expense  varies  from  twenty-five  to  fifty  per  cent  of  the  subscrip- 
tion price.  The  cost  of  maintaining  the  subscription-getting  de- 
partment of  the  periodical  at  headquarters  is  also  considerable. 
The  expense  of  circularization,  clerk  hire  and  supervision  is  great. 
INIany  losses  result  from  ineffective  circulation  efforts.  The  total 
often  equals  or  exceeds  the  publisher's  entire  subscription  revenue. 
The  statements  of  publishers  as  to  the  amount  of  their  net  sub- 
scription revenue  varies  widely.  They  are  largely  a  matter  of  book- 
keeping. But  it  is  generally  conceded  that  the  subscription  depart- 
ment of  a  periodical  is  an  actual  expense  rather  than  a  source  of 
profit.  The  principal,  if  not  the  only,  source  of  net  income,  in 
most  cases,  is  the  advertising  revenue. 

Lewis  proposed  that  the  American  Woman's  League  should  gath- 
er the  subscription  revenue  of  the  co-operative  publishers  on  a  fifty 
per  cent  net  cash  basis.  The  effect  of  the  plan,  if  carried  to  its 
logical  consummation — if,  in  other  words,  the  League  could  collect 
for  any  publisher  an  adequate  number  of  subscribers  without  other 
effort  on  his  part — would  be  to  furnish  him  a  substantial  subscrip- 
tion revenue  upon  a  most  acceptable  basis  of  profit.  Lewis  pointed 
out  to  the  members  of  the  League,  upon  the  other  hand,  that  the 
gross  subscription  revenue  of  publishers  in  the  United  States  is 
aproximately  one  dollar  per  capita,  per  annum,  or  in  excess  of  fifty 
millions  of  dollars.  Under  the  League  plan,  one-half  of  this  rev- 
enue, or  of  such  part  of  it  as  the  members  of  the  League  could  col- 
lectively gather  up,  would  be  available  as  gross  revenue  for  the 
purposes  of  that  organization.  He  proposed  to  the  publishers  and 
members  jointly  that  the  total  of  the  subscription  revenue  collected 
by  members  should  be  remitted  to  League  headquarters.  Thereupon 
the  publishers'  half  was  to  be  remitted  to  them  with  the  subscrip- 
tion orders.  The  remainder  was  to  be  placed  in  a  general  fund 
as  a  collective  reward  to  the  organization  for  the  service  of  its 
members.     Such  was  the  plan  eventually  agreed  upon  and  adopted. 

The  profits  of  the  I-eague  were  then  to  be  placed  at  the  disposal 
of  its  members  for  such  purposes  as  they  might,  through  their  own 
elective  representatives,  approve.    He  accordingly  caused  the  mem- 


758  THE  SIEGE  OF  UNIVERSITY  CITY 

bers  to  be  organized  into  local  chapters.  Each  chapter  had  the 
right  to  elect  officials  who  could  be  consulted  touching  the  sentiment 
in  their  respective  communities.  Subsequently,  he  caused  the  elec- 
tion of  State  representatives,  known  as  Regents.  These  could  be 
consulted  by  mail  as  to  the  desires  of  their  constituencies.  They 
could  also  be  called  into  consultation  at  University  City.  Finally, 
a  convention  of  delegates  was  called  at  University  City  on  June 
10-11,  1910.  This  M'as  attended  by  approximately  one  thousand 
delegates,  representing  an  equal  number  of  organized  chapters. 
Nearly  three  times  that  number  of  individual  members  also  gath- 
ered at  University  City  on  that  occasion  from  all  parts  of  the 
United  States.  These  came  at  their  own  expense.  The  assemblage 
of  delegates  and  members  at  the  two  principal  sessions  of  the  con- 
vention in  the  great  theatre  at  Delmar  Garden,  photographs  of 
which  will  be  found  elsewhere  in  this  volume,  is  perhaps  the  most 
remarkable  demonstration  of  the  power  of  organized  womanhood 
of  which  there  is  any  record.  This  is  the  gathering  contemptuously 
alluded  to  in  a  lengthy  news  article  doctored  up  by  a  local  news- 
paper and  widely  distributed  throughout  America  as  an  "Hurrah 
for  Lewis  meeting  recently  held  in  this  city."  It  was,  in  fact,  a 
splendid  tribute  to  Lewis'  genius  as  an  organizer,  and  to  his  per- 
sonality as  a  man  and  leader.  But  it  was  far  more  than  that.  The 
attentive  reader  will  not  have  lost  sight  of  the  fact  that  Lewis  at 
this  time  had  not  only  been  branded  with  a  fraud  order,  but  had 
been  indicted  no  fewer  than  ten  times  at  the  behest  of  the  Fed- 
eral authorities.  Yet  Joseph  W.  Folk,  who  was  governor  of  Mis- 
souri when  the  fraud  order  against  Lewis  and  the  People's  Bank 
was  issued,  speaking  on  this  occasion,  remarked: 

I  welcome  you  to  this  State  that  has  within  its  borders  such  a  city  as 
the  metropolis  of  St.  Louis.  I  welcome  you  to  a  commonwealth  that  has 
within  its  boundaries  the  dream  city,  the  city  ideal — University  City.  I 
believe  if  this  convention  had  its  way  the  name  of  this  city  ideal  would  be 
changed  to  "Saint  Lewis."  This  city  is  founded,  some  say,  upon  a  dream. 
Yet  you  see  around  you,  as  the  result  of  that  dream,  these  beautiful 
buildings.  It  is  not  so'  far  to  a  realization  of  the  hopes  Mr.  Lewis  has  for 
the  future  as  he  has  already  progressed.  Founded  upon  a  dream!  Yes, 
this  Republic  itself  was  founded  upon  a  dream — the  dream  of  liberty  in 
the  hearts  of  the  people — the  ideals  and  dreams  of  the  life  of  a  free 
people ! 

Mayor  Kreismann  of  St.  Louis  welcomed  the  visiting  mem- 
bers with  appropriate  words.  Governor  Hadley,  of  Missouri,  who 
was  unable  to  be  present,  sent  the  address  which  he  had  prepared, 
to  be  read  by  one  of  his  associates.  Representatives  of  Lewis' 
brother  publishers  associated  with  the  American  Woman's  League 
occupied  the  platform.  They  joined  with  him  in  the  addresses  and 
ceremonies  befitting  the  occasion.  A  copy  of  the  testimonial  ten- 
dered by  these  publishers  to  Lewis,  and  photographs  of  sundry 
trophies  presented  to  him  at  this  convention,  appear  among  the  illus- 
trations of  this  volume.  The  whole  substance  and  spirit  of  this 
occasion  testified  to  the  appreciation  in  which  Lewis  is  held  by  all 


THE  DREYFUS  CASE  OF  AMERICA  769 

who  have  a  true  comprehension  of  the  tendency  of  his  ideals  and 
labors. 

THE    REAL   E.    G.   LEWIS. 

No  such  body  of  representative  women  as  the  first  convention  of 
the  American  Woman's  League  was  ever  assembled  in  any  other 
place  at  any  time  in  the  world's  history.  In  numbers,  in  the  in- 
telligence and  ethical  standards  of  its  personnel,  and  in  the  loyalty 
of  their  common  devotion  to  a  great  ideal,  this  gathering  is  be- 
lieved to  be  a  unique  phenomenon.  The  leadership  of  Lewis  in 
these  activities  is  indeed  a  tribute  to  his  genius,  but  the  movement, 
which  thus  rallied  under  his  leadership,  transcends  his  personality 
or  that  of  any  individual.  It  embraces  the  noblest  ideals  and  as- 
pirations of  the  womanhood  of  America.  In  his  lecture  on  Shakes- 
peare, in  "Representative  Men,"  Emerson  remarks: 

Great  men  are  more  distinguished  by  range  and  extent  than  by  origi- 
nality. If  we  require  the  originality  which  consists  in  weaving,  like  a 
spider,  their  web  from  their  own  bowels;  in  finding  clay  and  making 
bricks  and  building  the  house;  no  great  man  is  original.  Nor  does  val- 
uable originality  consist  In  unlikeness  to  other  men.  The  hero  is  in  the 
press  of  Knights  and  the  thick  of  events;  and  seeing  what  men  want  and 
sharing  their  desire,  he  adds  the  needful  length  of  sight  and  of  arm,  to 
come  at  the  desired  point.  The  greatest  genius  is  the  most  indebted 
man.  .  .  . 

The  Genius  of  our  life  is  jealous  of  individuals,  and  will  not  have 
any  individual  great,  except  through  the  general.  There  is  no  choice 
to  genius.  A  great  man  does  not  wake  up  on  some  fine  morning  and 
say,  "I  am  full  of  life,  I  will  go  to  sea  and  find  an  Antartic  continent; 
today  I  will  square  the  circle:  I  will  ransack  botany  and  find  a  new 
food  for  man:  I  have  a  new  architect  in  my  mind:  I  foresee  a  new 
mechanic  power;"  no,  but  he  finds  himself  in  the  river  of  the  thoughts 
and  events,  forced  onward  by  the  ideas  and  necessities  of  his  contem- 
poraries. He  stands  where  all  the  eyes  of  men  look  one  way,  and  their 
hands  all  point  in  the  direction  in  which  he  should  go.  The  Church  has 
reared  him  amidst  rites  and  pomps,  and  he  carries  out  the  advice  which 
her  music  gave  him,  and  builds  a  cathedral  needed  by  her  chants  and 
processions.  He  finds  a  war  raging;  it  educates  hlra,  by  trumpets,  in  bar- 
racks, and  he  betters  the  instruction 

Every  master  has  found  his  materials  collected,  and  his  power  lay  in 
his  sympathy  with  his  people  and  in  his  love  for  the  materials  he  wrought 
in.  What  an  economy  of  power!  and  what  a  compensation  for  the  short- 
ness of  life!  All  is  done  to  his  hand.  The  world  has  brought  him  thus 
far  on  his  way.  The  human  race  has  gone  out  before  him,  sunk  the 
drills,  filled  the  hollows  and  bridged  the  rivers.  Men,  nations,  poets, 
artisans,  women,  all  have  worked  for  him,  and  he  enters  into  their 
labors.  Choose  any  other  thing,  out  of  the  line  of  tendency,  out  of  the 
national  feeling  and  history,  and  he  would  have  all  to  do  for  himself: 
his  powers  would  be  expended  in  the  first  preparations. 

By  this  reckoning  Lewis  is  a  true  genius,  and  deserves  to  rank 
among  the  most  heroic  figures  of  the  present  day.  The  conditions 
in  the  publishing  industry,  growing  out  of  the  passage  of  the  law  of 
1879,  made  it  possible  for  Lewis  to  supply  two  millions  of  families 
with  the  clean,  wholesome,  little  Woman's  ISIagazine  at  ten  cents  a 
year.    Yet  these  conditions  were  not  of  Lewis'  creation.    His  genius 


760  THE  SIEGE  OF  UNIVERSITY  CITY 

was  manifested  in  the  insight  needful  to  avail  himself  of  the  state 
of  affairs  which  made  this  achievement  possible.  The  ridge  along 
either  side  of  the  old  Bonhomrae  Road  was  doubtless  as  sightly, 
and  as  beautiful,  wlien  the  first  French  settlers  blazed  their  trail 
upon  it,  as  when  Lewis  selected  it  as  the  site  of  University  City. 
It  was  his  genius  which  foresaw  that  tlie  city  of  St.  Louis  must 
shortly  gather  these  open  fields  within  her  extended  arms  and  em- 
brace them  as  the  site  of  her  choicest  homes.  Lewis  alone  fore- 
saw that  he  had  only  to  plant  a  city  upon  this  special  hill,  near  St. 
Louis,  and  that  the  travail  of  every  woman  within  her  borders 
would  infallibly  work  to  enrich  all  who  were  associated  therein. 
The  necessity  of  some  better  means  of  forwarding  small  remit- 
tances, growing  out  of  the  great  mail  order  industry,  and  other 
conditions  which  gave  rise  to  the  People's  Bank,  were  not  of  Lewis* 
creation.  Yet,  by  the  insight  of  true  genius,  he  added  the  "needful 
length  of  sight  and  of  arm"  to  accomplish  that  on  which  the  eyes 
of  multitudes  rested  impotently.  Emerson  has  also  said  that  if  a 
man  will  but  build  a  better  mouse  trap  than  his  neighbors,  men  will 
find  him  out,  although  they  must  beat  a  path  through  the  woods  to 
his  door.  The  fact  that  Lewis  brought  to  the  west  bank  of  the 
Mississippi  River  the  publishers  of  more  than  one  hundred  repre- 
sentative American  periodicals,  great  numbers  of  educators,  artists 
and  special  writers,  and  more  than  four  thousand  representative 
American  women  upon  a  single  occasion — besides  countless  multi- 
tudes of  individual  visitors  and  groups  of  delegates, — is  probative, 
unless  humanity  has  suddenly  gone  mad,  of  a  personality  far  dif- 
ferent to  that  of  the  get-rich-quick  schemer  depicted  by  his  op- 
ponents. 

There  is  still  a  little  greup  of  Government  officials  and  post- 
office  inspectors  and  informers  who  cherish  the  delusion  that  Lewis 
i*?  a  sort  of  hypnotist.  They  profess  the  belief  that,  bj'  his  plausi- 
ble words  and  adroit  arts  of  corruption,  he  has  beguiled  and  de- 
ceived the  scores  of  fellow  publishers,  educators,  artists,  writers, 
bankers,  lawyers  and  business  men  with  whom  he  has  transacted 
business.  They  aver  that  the  hundreds  of  bright,  capable  men  and 
women  associated  with  him  as  employees  have  never  found  him  out. 
They  declare  that  thousands  of  American  men  and  women  who 
have  followed  him  loyally  tlirougli  disaster  as  well  as  through  pros- 
perity, have  been  cruelly  deluded.  Lewis,  in  their  opinion,  has 
successfully  concealed  from  all  the  world  but  themselves  his  es- 
sential crookedness.  Such  a  theory,  it  must  be  frankl}''  said,  is  ut- 
terly untenable. 

Upon  the  one  side  stand  the  informers,  Nichols  and  Parshall; 
the  irresponsible  editor.  Reedy;  the  postoffice  inspectors  and  their 
superiors  at  Washington,  who  have  sustained  them,  largely  "for  the 
good  of  the  service,"  right  or  wrong,  in  whatever  measures  they 
deemed  best  to  take.  On  that  side  are  the  political  spoilsmen  of 
the    Republican    Administration   of    Missouri    who    sought,    in   the 


THE  DREYFUS  CASE  OF  AMERICA  761 

opinion  of  the  St.  Louis  press,  to  loot  the  People's  Bank  to  pay 
their  political  debts.  On  that  side,  it  must  be  admitted  to  their 
everlasting  shame,  are  found,  in  the  words  of  Secretary  of  State 
Swanger,  the  Republican  Administration  of  State  and  Nation,  from 
the  President  down.  Upon  the  other,  are  the  citizens  of  the  city  of 
St.  Louis  and  of  St.  Louis  county  who,  on  the  admission  of  the 
present  United  States  attorney  at  St.  Louis,  indorsed  by  the  Fed- 
eral court,  are  prejudiced  in  favor  of  Lewis  and  against  the  of- 
ficials of  the  Government  itself.  In  solid  array  behind  Lewis' 
neighbors  and  fellow  citizens  stand  the  masses,  numbered  by  the 
hundreds  of  thousands  and  millions,  whom  neither  the  Adminis- 
tration nor  the  hostile  newspapers  have  been  able  to  convince  that 
Lewis  ever  entertained  the  conscious  purpose  of  defrauding  any- 
body. On  the  contrary,  these  regard  him  as  a  genius  of  high  order, 
and  the  victim  of  an  unrighteous  and  intolerable  persecution.  With 
exceptions  here  and  there, — due  to  misapprehension  of  the  true 
facts  brought  about  through  prejudiced  and  interested  channels, — 
the  women  of  America,  and  to  a  very  great  exent  their  husbands, 
sons  and  brothers,  regard  the  Woman's  Magazine,  the  American 
Woman's  League,  the  People's  Bank  and  University  City,  itself,  as 
sufficient  evidence  that  the  real  E.  G.  Lewis  is  a  man  far  removed 
from  the  get-rich-quick  schemer  the  Administration  would  fain  have 
them  believe  him.  The  story  of  the  last  five  years,  in  which  the 
American  Woman's  League  stands  out  as  the  central  feature,  when 
fully  told,  will  dissipate  forever  the  prejudice  which  attaches  to 
Lewis'  name.  The  final  record  will  cause  him  to  take  high  rank 
among  the  benefactors  of  mankind. 

THE    people's    university. 

The  growth  and  development  of  the  American  Woman's  League 
was  truly  phenomenal.  It  was  first  launched,  as  we  know,  im- 
mediately after  Lewis'  first  trial  in  November,  1907.  Its  revenues 
for  the  year  1908  were  seventy-five  thousand  dollars;  for  1909, 
six  hundred  thousand  dollars  and  for  1910,  one  million,  two  hun- 
dred and  fifty  thousand  dollars.  The  convention  marked  the  height 
of  the  League's  prosperity.  Came  then  the  last  assault  of  the  Fed- 
eral forces  and  their  allies,  directed,  not  against  Lewis  himself, 
but  against  the  People's  University  and  the  American  Woman's 
League. 

Early  in  the  history  of  the  League  the  members  made  known 
their  preference  for  educational  opportunities  for  themselves  and 
their  children  over  any  other  form  of  rewards  that  could  be  of- 
fered. Lewis  accordingly  devoted  the  net  revenues  of  the  League 
primarily  to  the  founding  and  development  of  the  People's  Uni- 
versity. Next  after  the  educational  advantages  the  members  ex- 
pressed their  preference  for  local  club  houses.  Provision  was  there- 
fore made  for  the  erection  of  the  attractive  little  buildings  known 
as  chapter  houses,  upon  conditions  varying  with  the  size  of  the  com- 
munities and  the  activity  of  the  local  membership.     Approximately 


762  THE  SIEGE  OF  UNIVERSITY  CITY 

forty  such  club  houses  were  constructed,  a  total  far  in  excess  of  the 
number  of  club  houses  previously  erected  by  the  entire  women's 
club  movement  of  the  United  States. 

The  People's  University,  after  nearly  two  years  of  preliminary 
organization,  opened  its  classes  in  October,  1910.  Prior  to  the 
reorganization  of  April  11,  1911,  a  total  enrollment  in  excess  of 
fifty  thousand  applications  for  individual  courses  of  study  had  been 
recorded.  By  the  terms  of  the  League  plan,  all  members  and  their 
minor  children  were  entitled  to  instruction  in  any  course  or  courses 
of  study  offered  by  the  People's  University,  without  charges  for 
tuition.  All  instruction  was  given  by  corresiDondence,  with  one  ex- 
ception. Students  of  especial  talent  in  certain  courses  were  in- 
vited to  University  City  for  a  period  of  attendance  as  honor  stu- 
dents, under  the  personal  instruction  of  the  masters.  All  the  ex- 
penses of  such  students  were  a  charge  upon  the  League  fund. 

Instruction  by  correspondence  demands  text  matter  expressly 
adapted  to  that  purpose.  To  avoid  the  delay  that  would  have  been 
caused  by  the  preparation  of  such  texts,  and  to  escape  the  invest- 
ment of  too  large  a  portion  of  the  League's  funds  in  the  needful 
manuscripts  and  plates,  the  management  of  the  League  early 
adopted  the  principle  of  inviting  recognized  institutions  of  learn- 
ing to  join  in  its  work  by  affiliation  with  the  People's  University. 
Such  arrangements  were  consummated,  in  the  fall  and  winter  of 
1910,  with  several  well  known  institutions.  Among  these  were  the 
Home  Correspondence  School  of  Springfield,  Mass. ;  The  Quinn- 
Campbell  Conservatory  of  Music,  Chicago;  The  American  School 
of  Home  Economics,  Chicago ;  The  New  York  School  of  Automobile 
Engineering;  The  Women's  College  of  Scientific  Dressmaking,  La 
Crosse,  Wis.;  The  Root  School  of  Apiculture,  Medina,  Ohio;  and 
subsequently  the  Chicago  Kindergarten  College.  The  effect  of 
these  affiliations  was  to  make  immediately  available  to  the  members 
of  the  League  and  their  minor  cliildren  a  large  number  of  the  best 
and  most  practical  correspondence  courses  of  instruction  now  of- 
fered in  the  United  States.  The  commercial  value  of  these  courses, 
at  their  regular  cash  rates,  such  as  are  required  of  all  persons  not 
members  of  the  League,  would  aggregate  over  one  thousand  dol- 
lars. Of  course  not  every  member  of  the  League  would  wish  to 
avail  herself  of  all  these  various  branches  of  instruction,  nor  could 
she  do  so  successfully.  Yet  all  were  free  to  enroll  for  as  many 
courses  of  study  as  they  saw  fit. 

In  addition  to  its  contracts  of  affiliation,  the  People's  University 
organized  and  operated  its  own  correspondence  courses  in  the  fine 
arts  and  crafts  through  the  faculty  of  the  Art  Institute  at  Univer- 
sity City.  These  courses  embraced  a  complete  School  of  Ceramic 
Art,  besides  instruction  in  Sculpture,  in  Drawing  and  Painting,  and 
in  many  other  branches.  The  faculty  of  the  Art  Institute  was  of 
exceptional  strength.  George  Julian  Zolnay,  Dean  and  Director, 
is   a   sculptor   of  international   reputation.     John   H.   Vanderpoel, 


THE  DREYFUS  CASE  OF  AMERICA  763 

Director  of  the  School  of  Painting,  now  deceased,  was  formerly 
for  thirty  years  the  foremost  instructor  in  the  Art  Institute  at 
Chicago.  His  great  book,  "The  Fainting  of  the  Human  Figure" 
is  recognized  as  the  standard  authority  of  the  world  on  that  sub- 
ject. His  reputation  as  instructor  was  second  to  none.  Taxile 
Doat,  Director  of  the  School  of  Ceramic  Art,  was  formerly  chief 
ceramic  decorator  in  the  Government  Pottery  at  Sevres,  France. 
Doat's  reputation  is  world-wide.  Associated  with  Doat  was  Mrs. 
Adelaide  AIsop-Robineau,  the  foremost  living  American  ceramic 
artist.  Other  members  of  the  faculty  of  the  School  of  Ceramic  Art 
were  Frederick  H.  Rhead,  Instructor  in  Pottery,  and  Mrs.  Kath- 
ryn  E.  Cherry,  Instructor  in  China  Decoration.  The  last  men- 
tioned course  was  especially  popular  among  League  members.  Ex- 
traordinarily excellent  results  were  secured  by  the  correspondence 
method.  Examples  both  of  the  grand  feu  ceramics  and  of  the 
overglaze  decoration  from  the  kilns  of  the  Art  Institute  at  Univer- 
sity City  appear  in  half-tone  elsewhere  in  these  pages.  The  Peo- 
ple's University  also  had  in  process  of  organization  complete 
Schools  of  Education,  of  Languages,  of  Commerce  and  Administra- 
tion, of  Journalism,  of  Photography,  and  others. 

The  commercial  activities  of  the  League  in  gathering  the  mag- 
azine subscription  business  of  the  various  communities  were  in 
themselves  an  extremely  interesting  and  profitable  experience  to 
members.  The  educational  and  cultural  advantages,  thus  carried 
by  the  mails  into  the  remotest  rural  neighborhoods,  and  there  placed 
at  the  disposal  of  persons  who  could  by  no  other  means  have  availed 
themselves  of  such  privileges,  were  eagerly,  almost  greedily,  wel- 
comed. The  appreciation  of  these  advantages  shown  by  League 
members  and  their  children  was  truly  pathetic.  Only  those  who 
came  into  close  touch  with  the  students  of  the  People's  University 
can  realize  the  essential  altruism  of  the  entire  League  movement, 
or  the  extremely  valuable  nature  of  its  contribution  to  the  cause  of 
popular  education. 

THE     LAST    ASSAULT. 

The  first  attack  in  the  last  assault  upon  the  Lewis  enterprises  was 
made  in  the  columns  of  the  Rural  New  Yorker.  This  was  directed 
against  the  People's  University.  It  took  the  form  of  an  article  as- 
serting, in  substance,  that  the  members  of  the  faculties  of  certain 
schools  affiliated  with  the  People's  University  were  not,  in  fact,  giv- 
ing instruction  to  members  of  the  American  Woman's  League,  as 
represented.  The  inference  was  suggested  that  the  People's  Uni- 
versity was,  in  effect,  a  blind  to  conceal  the  alleged  nefarious  char- 
acter of  Lewis'  undertakings.  In  May,  1911,  the  publishers  of  the 
Rural  New  Yorker  were  brought  to  book  in  the  Circuit  Court  of 
St.  Louis  county  at  Clayton,  Missouri,  and  aggregate  damages  of 
thirty  thousand  dollars  were  assessed  against  them.  This  attack 
was  thus  branded  as  a  malicious  and  totally  unfounded  libel.  Mean- 
time,  its   effects   had   been   far-reaching   and    disastrous.      Marked 


764  THE  SIEGE  OF  UNIVERSITY  CITY 

copies  of  the  Rural  New  Yorker,  containing  tliis  libelous  matter, 
were  forwarded  by  the  publishers  to  the  officers  of  all  the  local 
chapters  of  the  League.  Many  others  whose  names  appeared  in 
the  columns  of  the  Woman's  National  Daily  as  being  in  attendance 
at  the  convention,  were  similarly  favored.  Copies  afso  were  mailed 
to  members  of  the  faculty  of  the  People's  University.  Still  others 
went  to  advertisers  in  the  Lewis  publications.  Copies,  in  short, 
were  dispatched  on  their  mission  of  devastation  to  every  quarter 
where  tlie  publishers  believed  that  injury  to  Lewis  and  his  enter- 
prises would  result. 

Complaints  against  the  Lewis  enterprises  were  solicited  by  this 
periodical.  Its  columns  were  thrown  open  to  disgruntled  persons 
as  a  medium  of  publicity.  No  voluntary  association  ever  existed 
which  did  not  number  among  its  members  individuals  who,  from 
motives  of  thwarted  ambition,  love  of  notoriety,  envy,  jealousy,  or 
what  not,  found  themselves  out  of  sympathy  with  the  desires 
and  wishes  of  the  controlling  majority.  A  half  dozen  such  mem- 
bers of  the  American  Woman's  League  eagerly  seized  upon  the 
opportunity  aft'orded  by  the  Rural  New  Yorker  to  air  their  griev- 
ances and  arrayed  themselves  with  that  publication  in  an  effort  to 
disrupt  the  organization.  A  small  number  of  claims  of  dissatis- 
fied investors  in  the  Lewis  enterprises  were  received  by  the  Rural 
New  Yorker.  These  the  publishers  referred  to  the  Postoffice  De- 
partment at  Washington.  Next  they  were  placed  in  the  hands  of 
Attorney  Claude  D.  Hall,  of  St.  Louis.  Notwithstanding  the  fact 
that  these  claims  aggregated  less  than  two  per  cent  of  the  out- 
standing indebtedness  of  the  Lewis  enterprises,  Attorney  Hall,  as 
we  have  seen,  proceeded, — largely  upon  the  basis  of  information 
furnished  by  the  Rural  New  Yorker  and  tlie  group  of  disgruntled 
League  members,  acting  with  and  through  that  periodical, — to  draft 
the  unique  bill  in  equity  by  means  of  which  all  the  Lewis  enter- 
prises were  eventually  thrown  into  a  receivership. 

Meantime,  appeared  at  St.  Louis  Postoffice  Inspector  Swenson. 
Followed  the  unique  and  amazing  spectacle  of  a  branch  of  the 
Government  service  placed,  in  effect,  at  the  disposal  of  a  local 
attorney  in  private  practice  for  the  purpose  of  co-operating  in 
securing  claims  for  collection  at  the  usual  rate  of  ten  per  cent  by 
means  of  receivership  proceedings  in  a  Federal  court.  Swenson 
testified  that  the  entire  postoffice  inspection  service  was  at  his  dis- 
posal for  the  investigation  of  the  Lewis  enterprises.  The  evidence 
of  collusion  between  Swenson  and  Hall  is  overwhelming.  It  is 
only  too  apparent  that  the  allied  forces  of  the  Rural  New  Yorker, 
Attorney  Hall  and  the  postoffice  inspectors  co-operated  in  a  joint 
campaign  to  discredit  the  proposed  reorganization  of  the  Lewis 
enterprises.  By  this  reorganization  it  was  believed  substantial 
equities  could  have  been  realized  to  the  investors  and  some  of  the 
enterprises  themselves  rehabilitated  and  placed  upon  a  sound 
financial  footing. 


THE  DREYFUS  CASE  OF  AMERICA  766 

The  effect  of  tliis  adverse  publicity  and  agitation  was  to  revive 
public  interest  in  the  charges  formerly  bruited  abroad  by  the  De- 
partment in  connection  with  the  People's  Bank  and  the  alleged 
fraudulent  mailings  of  the  Woman's  Magazine.  The  whole  story, 
which  had  reposed  for  years  in  the  morgues  of  newspapers  through- 
out the  United  States,  was  again  hashed  over  and  reprinted.  New 
stories,  involving  Lewis'  entire  history  according  to  the  biography 
of  Nichols,  were  concocted  by  hostile  newspapers  in  St.  Louis,  and 
spread  abroad.  National  publicity  was  given  to  the  latest  indict- 
ment of  Lewis,  and  to  the  receivership  proceedings.  Finally,  since 
there  seemed  to  be  no  grounds  on  which  the  Postoffice  Department 
could  issue  a  third  memorandum  by  the  postmaster-general,  the 
entire  case  of  the  Department  against  Lewis  and  his  enterprises 
was  prej^ared  from  the  official  sources  with  which  the  reader  is  now 
familiar,  including  the  columns  of  the  Rural  New  Yorker.  The 
whole  was  embodied  in  a  speech  delivered  by  Senator  Theodore  E. 
Burton  of  Ohio  upon  the  floor  of  the  United  States  Senate.  This 
speech  was  promptly  printed,  ostensibly  as  a  public  document,  and 
sent,  under  the  senator's  frank,  broadcast  throughout  the  United 
States,  to  substantially  the  same  list  of  persons  who  had  received 
marked  coj^ies  of  the  Rural  New  Yorker.  A  more  gross  and  glaring 
instance  of  collusion  between  the  officials  of  Government  and  private 
individuals,  actuated  by  sordid  and  mercenary  motives  in  the  de- 
struction of  a  meritorious  enterprise,  could  hardly  be  imagined.  The 
policy,  "Delenda  est  Carthago,"  evidently  was  in  full  force  and 
effect. 

THE   CONGRESSIONAL  INQUIRY. 

Meantime,  the  seven  years  agitation  of  Lewis  and  his  friends  for 
a  congressional  inquiry  at  last  bore  fruit.  The  Sixty-second  Con- 
gress, by  a  change  of  the  political  complexion  of  the  United  States, 
was  decisively  Democratic.  On  June  13,  1910,  Congressman  Rich- 
ard Bartholdt  of  Missouri  had  introduced  House  Bill  No.  26,799, 
providing  for  the  indemnification  of  the  Lewis  Publishing  Com- 
pany for  its  losses  throughout  the  Siege.  In  support  of  this  measure 
former  Third  Assistant  Madden,  who  had,  meantime,  been  re- 
tained by  Lewis  as  attorney-in-fact  to  present  the  case  of  the  Lewis 
Publishing  Company  to  Congress  and  to  the  Court  of  Claims, 
memorialized  Congress  with  a  document  reciting  in  full  the  com- 
pany's grievances.  Action  upon  this  bill  was  thwarted  by  the  re- 
sponse to  Congress  of  Postmaster-General  Hitchcock.  This  took 
the  form  of  a  lengthy  document,  the  effect  of  which  was  to  becloud 
the  issue. 

Again,  General  Madden  memorialized  Congress,  on  April  12, 
1911,  with  a  pamphlet  entitled,  "A  Chapter  From  the  United  States 
Government's  Shame."  This  revealed  certain  facts  touching  the 
efforts  of  the  company  to  recover  about  thirty-two  thousand  dollars, 
alleged  to  have  been  unlawfully  extorted  as  so-called  excess  postage. 
The  attention  of  Congress  thus  having  been  pointedly  drawn  to  the 


766  THE  SIEGE  OF  UNIVERSITY  CITY 

Lewis  case,  a  resolution  was  passed  by  the  House  of  Representatives 
authorizing  its  Committee  on  Postoffice  Expenditures  to  make  an 
investigation  of  the  conduct  of  the  PostofBce  Department.  The 
purport  of  this  resolution  was  sufficiently  broad  to  embrace,  among 
others,  the  case  of  the  Lewis  Publishing  Company.  Lewis  was 
accordingly  invited  by  Chairman  Ashbrook  of  that  committee  to 
submit  a  formal  bill  of  complaint.  This  was  done  through  General 
Madden.  Almost  continuous  sessions  of  the  committee  were  held 
at  Washington  from  July  12  to  August  21,  1911.  The  committee 
resumed  its  sessions  on  November  9,  1911,  at  the  Hotel  Jefferson, 
St.  Louis,  for  the  convenience  of  residents  of  that  city.  An  ad- 
journment was  taken  on  November  17  and  the  sessions  were  re- 
sumed at  Washington  on  April  29,  1912,  where  they  w^ere  again 
continued  until  May  4.  In  all,  more  than  two  months  of  working 
time  have  been  devoted  to  investigation  of  the  complaints  of  the 
Lewis  Publishing  Company  and  the  People's  Bank.  Upwards  of 
one  hundred  witnesses  have  been  examined.  More  than  four  thou- 
sand pages  of  printed  testimony  have  been  recorded.  It  is  be- 
lieved that  practically  the  entire  history  of  the  conduct  of  the 
Postoffice  Department  in  these  matters  has  now  been  spread  upon 
the  pages  of  the  official  record.  The  frequent  reference  to  the 
Ashbrook  Hearings,  and  occasional  excerpts  already  quoted,  will 
have  given  the  reader  a  considerable  insight  into  the  character  and 
scope  of  this  inquiry. 

The  hearings  were  suspended  during  Lewis'  recent  trial  at  St. 
Louis.  Shortly  thereafter  they  were  brought  to  a  close  by  the 
agreement  of  counsel  to  complete  the  record  by  the  insertion  of  the 
entire  testimony  recently  taken  in  the  Federal  court  at  St.  Louis. 
Thus  the  congressional  inquiry  has  now  been  concluded,  except 
for  Lewis'  rebuttal  and  the  arguments  of  opposing  counsel.  The 
committee  has  announced  the  intention  of  deferring  its  final  report 
until  the  second  session  of  the  Sixty-second  Congress.  This  action 
is  presumed  to  have  been  taken  upon  the  ground  that  the  pendency 
of  a  presidential  election  might  cast  upon  a  report  submitted  at  this 
time  the  suspicion  of  political  bias.  Such  a  handicap  might  detract 
from  the  force  of  the  recommendations  touching  the  fraud  order 
process,  and  otlier  remedial  postal  legislation  wliich  it  is  commonly 
believed  the  report  will  recommend.  The  committee  is  thought  to  be 
unanimous  in  recognizing  the  need  of  reform.  The  views  of  indi- 
vidual members  ;ks  to  the  equities  of  the  case,  and  as  to  Lewis' 
personality,  cannot  of  course  be  definitely  ascertained  until  its  report 
is  made  public.  It  is  assumed  to  be  the  intention  of  the  committee 
to  refer  the  claims  of  the  People's  Bank  and  I>cwis  Publishing 
Company  for  final  adjudication  to  the  Court  of  Claims.  Its  general 
sentiment  is  believed  to  be  expressed,  and  that  of  a  majority  cer- 
tainly may  be  inferred,  from  the  following  statement  of  the  chair- 
man, Hon.  William  A.  Ashbrook  of  Ohio.  At  the  close  of  the  final 
hearing  at  Washington  on  May  4,  1912,  Mr.  Ashbrook  said: 


THE  DREYFUS  CASE  OF  AMERICA  767 

We  will  close  this  hearing  with  some  feeling  of  regret,  because  it  means 
a  separation  of  those  with  whom  we  have  been  associated  and  of  whom, 
personally,  I  have  grown  very  fond.  I  have  learned  to  know  Mr.  Britt  and 
to  admire  and  respect  him.  As  one  member  of  this  committee,  I  want  to 
express  the  belief  that  he  has  at  no  time  done  anything  except  that  which 
he  regarded  as  his  duty.  Mr.  Lewis  is  one  of  the  most  remarkable  men  I 
have  ever  known.  I  believe  the  result  of  the  hearings  will  be  beneficial  to 
him,  to  the  PostofRce  Department,  and  to  all  concerned. 

We  all  appreciate  the  fact  that  these  differences  have  grown  up  during 
a  long  controversy.  I  might  suggest  to  Mr.  Lewis  that,  in  my  opinion,  it 
will  serve  no  useful  purpose  to  further  continue  the  attack  upon  the 
Postoffice  Department,  Whether  certain  officials  have  done  things  that 
were  not  proper  for  them  to  do,  or  not,  I  do  not  want  to  discuss  at  this 
time.  At  any  rate,  you,  Mr.  Lewis,  now  want  to  go  forward  and  rebuild 
your  businesses.  I  hope  you  may  succeed.  I  want  to  say,  personally  and 
for  the  record,  that  while  you  may  have  done,  and  doubtless  have  done, 
many  indiscreet  things,  I  do  not  know  wherein  you  have  done  anything 
with  intent  to  do  wrong  or  to  defraud.  I  hope  you  will  now  have  the 
opportunity  to  show  the  Postoffice  Department  and  the  many  thousands  of 
people  who  have  confidence  in  you,  that  you  have  but  one  intent,  and  that 
is  to  do  right.  I  hope  that  you  will  be  able  to  restore  to  these  investors, 
at  least  in  part,  the  money  they  have  entrusted  to  you.  I  assure  you  that 
this  committee  has  intended  at  all  times  to  be  fair  and  impartial.  We 
have  had  no  partisan  purpose.  We  shall  reach  our  final  conclusion  with- 
out bias. 

THE    RAVAGES   OF   -SVAR. 

In  fine,  the  reader  is  invited  to  ponder  well  the  contrast  between 
the  status  of  alFairs  at  University  City  on  the  occasion  of  the  con- 
vention of  the  American  Woman's  League  in  June,  1910,  and  the 
present  time.  Especial  attention  is  drawn  to  the  fact  that  Lewis* 
eiforts  for  the  rehabilitation  of  his  enterprises,  and  also  the  efforts 
to  that  end  of  his  brother-publishers  through  the  Reorganization 
of  April  11,  1911,  have  been  thwarted  by  the  receivership  proceed- 
ings in  the  Federal  courts.  At  the  time  of  the  convention  the 
League  was  in  the  heyday  of  its  prosperity.  Prior  to  the  publication 
of  the  first  attack  upon  the  People's  University  in  the  Rural  New 
Yorker,  there  appeared  every  reason  to  suppose  that  the  subscrip- 
tion season  beginning  in  September,  1910,  would  produce  a  volume 
of  revenue  for  the  Lewis  publications  which  would  enable  them  to 
overcome  the  financial  distress  suffered  continuously  since  the  with- 
drawal of  second-class  entry  in  1907.  The  League  was  the  key- 
stone in  the  arch  of  Lewis'  efforts  to  rehabilitate  his  enterprises. 
The  assets  of  his  various  companies  were  thought  by  him  adequate 
to  meet  all  his  liabilities.  He  was  convinced  this  would  be  possible 
if  the  element  of  time  could  be  projected  into  his  affairs.  To  this 
end  he  devised,  in  the  summer  of  1911,  a  plan  for  refunding  his 
indebtedness.  He  proposed  to  issue,  in  exchange  for  his  outstandina: 
liabilities,  his  personal  debenture  notes,  running  for  a  term  of 
years.  This  plan  was  accepted  by  the  investors  as  being  in  good 
faith.  It  seemed  destined  to  accomplish  the  intended  result.  It 
was  thwarted  by  the  loss  of  confidence  resulting  from  the  last  assault 
of  the  Federal  authorities   and  their  allies. 

The  effect  of  that  assault  was  to  virtually  paralyze  the  League. 


768  THE  SIEGE  OF  UNIVERSITY  CITY 

It  become  evident  early  in  the  fall  of  1910,  that  the  subscription 
revenues  of  the  Lewis  Publishing  Company  from  that  organization 
would  be  inadequate.  The  last  prop  having  thus  been  struck  from 
under  the  company,  its  four  monthly  periodicals — the  Woman's 
Magazine,  the  Woman's  Farm  Journal,  Beautiful  Homes,  and 
Palette  and  Bench,  a  newly  acquired  art  journal — susj^ended  publi- 
cation and  were  combined  with  the  Woman's  National  Daily.  Still 
later  it  became  necessary  to  reduce  the  frequency  of  issue  of  that 
periodical.  It  thus  gave  place  to  the  Woman's  National  Weekly, 
as  now  published.  Then  came  the  decree  of  the  Federal  courts 
throwing  the  company  into  bankruptcy  and  the  affiliated  institutions 
into  the  hands  of  a  receiver. 

The  sacrifice  of  values  to  investors  resulting  from  these  ill- 
advised  and  injurious  proceedings  has  been,  and  is  destined  to  be, 
most  pitiful.  The  remaining  portions  in  sections  one,  two  and 
three,  constituting  the  original  eighty-five  acres,  have  already  been 
forced  upon  the  market.  They  realized  at  the  receiver's  sale  a 
mere  fraction  of  their  value.  The  holders  of  first  mortgage  notes 
on  these  sections  will  receive  less  than  twenty-five  per  cent  on  their 
investment.  Other  sections  are  likely  to  suffer  a  still  greater  sacri- 
fice. The  esi^ecially  designed  buildings  of  the  Lewis  Publishing 
Company  are  nearly  as  valueless  for  other  uses  as  a  great  cathedral 
might  be  if  condemned  to  be  sold  for  other  than  devotional  purposes. 
They  are  worth  hardly  as  much  as  the  ground  upon  which  they 
stand,  since  the  cost  of  their  removal  would  be  a  tax  upon  a  pur- 
chaser of  the  site.  The  same  rule  applies  to  their  special  equip- 
ment of  printing  machinery.  The  two  plants  of  the  Lewis  Publish- 
ing Company  are  among  the  most  notable  of  their  kind  in  the  world. 
Yet  they  are  of  little  value  except  to  the  company  itself  as  a  going 
concern  at  its  former  location.  The  whole  seems  likely  to  be 
sacrificed  under  the  hammer,  at  the  behest  of  the  Federal  court, 
for  a  tithe  of  its  cost  and  value.  The  usual  wastes  attendant  upon 
receivership  proceedings  is  apparent  upon  every  hand.  The  con- 
trast between  this  plight  and  the  hapjjy,  prosperous  World's  Fair 
days  before  the  postoffice  inspectors,  unhappily,  set  foot  in  Univer- 
sity City,  is  most  striking.  Hardly  less  marked  is  the  contrast  be- 
tween the  effect  of  winding  up  these  institutions  by  receivership 
proceedings  and  the  plans  whereby  the  Publishers'  Committee  of 
Reorganization  had  contemplated  their  refinancing  and  rehabili- 
tation. ^ 

The  Siege  of  University  City  has  lasted  seven  years.  It  has 
consisted  of  an  almost  constant  campaign  of  investigations,  fraud 
orders,  indictments,  criminal  and  civil  suits  and  receivership  pro- 
ceedings. The  whole  has  been  given  Nation-wide  notoriety,  both  in 
the  public  press  and  in  official  documents  distributed  broadcast  at 
public  expense.  The  constituted  authorities  have  been  aided  and 
abetted  at  every  step  by  Lewis'  business  rivals  and  allied  interests. 
Yet  less  than  two  per  cent  of  those  associated  with  him  in  his  en- 


THE  DREYFUS  CASE  OF  AMERICA  769 

terprises,  either  as  creditors  or  as  investors,  could  be  induced  to  join 
in  the  last  assault.  The  history  of  the  Siege  must  stand  out,  for  all 
time,  as  a  monument  to  the  menace  of  arbitrary  power.  The  officials 
whose  pernicious  activity  has  caused  this  appalling  loss  are  finan- 
cially irresponsible.  The  attitude  of  Judge  Smith  McPherson  in 
holding  under  advisement,  over  a  period  of  three  years,  a  libel  suit 
against  two  of  them,  shows  that  it  is  practically  impossible  to  bring 
them  to  book  through  the  machinery  of  the  courts  of  justice.  More- 
over, damages,  if  assessed  against  them,  could  not  be  collected. 
Their  entire  personal  resources  would  be  the  merest  fraction  of  the 
losses  which  they  have  caused.  It  is  assuredly  high  time  that  the 
power  of  petty  officials  to  wreck  and  ruin  business  enterprises  by 
arbitrary  rulings,  which  no  American  court  can  review,  should  be 
curbed  by  suitable  legislation. 

A  brief  summary  of  the  total  losses  incurred  during  the  Siege 
will  demonstrate  conclusively  this  point.  The  People's  United 
States  Bank,  according  to  the  statement  of  Receiver  Essen  to  the 
court,  had  in  round  figures,  one  and  a  quarter  millions  of  dollars 
cash  on  deposit  with  other  banks,  and  one  million  dollars  in  first 
mortgage  loans,  Government  bonds  and  similar  assets.  Its  total 
liabilities,  exclusive  of  capital  stock,  were  about  three  hundred  and 
seventy-five  thousand  dollars  of  deposits.  Its  present  resources  con- 
sist of  less  than  sixty  thousand  dollars.  These  are  in  the  form  of 
five  thousand  dollars  cash  and  (mirabile  dictu!)  a  judgment  against 
the  State  of  Missouri  for  the  costs  of  the  receivership  proceedings. 
The  loss  in  liquidation  was  approximately  three  hundred  and  fifty 
thousand  dollars.  The  Lewis  Publishing  Company,  on  January  31, 
1906,  was  the  owner  of  total  assets  exceeding  three  and  a  half 
millions  of  dollars.*  Nearly  one  and  a  half  millions  of  this  vast 
amount  Were  in  cash  or  its  equivalent.  Its  entire  liabilities,  ex- 
clusive of  capital  stock,  were  thirty-two  thousand  dollars,  or  less 
than  one  per  cent  of  its  assets.  The  earnings  of  the  company  prior 
to  the  commencement  of  the  Siege  had  been  at  the  rate  of  ap- 
proximately a  quarter  of  a  million  dollars  a  year.  Its  only  present 
assets  are  its  buildings  and  printing  machinery.  These  are  ap- 
praised by  the  experts  employed  by  the  present  receiver  at  ap- 
proximately four  hundred  thousand  dollars.     The  company's  present 


•Financial   condition    of    The   Lewis    Publishing    Company    on    January    31,    1906: 
ASSETS.  TOTAL  LIABILITIES. 

Cash    in    bank $    119,811.15  (Not    including    capital    stock) 

Bonds  1,000.45  $32,333.75. 

Money  at  interest  on  call  and 
time  loans  and  bills  receiv- 
able    1,224,356.00 

Accts.    receivable 219,706.75 

Buildings   and   real  estate 479,937.69 

Machinery    and    equipment 205,346.21 

Paper    stock    16,727.26 

Woman's  Magazine  1,000,000.00 

Woman's   Farm   Journal 250,000.00 

$3,515,885.49 


770  THE  SIEGE  OF  UNIVERSITY  CITY 

indebtedness  exceeds  that  amount  by  nearly  one  million  dollars. 
The  total  real  estate  holdings  of  the  University  Heights  com- 
pany on  January  1,  1906,  were  appraised  in  round  figures  at 
three  millions.  Its  liabilities,  exclusive  of  capital  stock,  were 
approximately  eight  hundred  thousand  dollars.  At  present,  the 
real  estate  assets  of  this  concern  are  appiaised  at  slightly  over 
one  million.  Its  indebtedness  is  nearly  two  millions.  The  combined 
assets  of  the  Lewis  Publishing  Company  and  University  Heights 
company  at  the  beginning  of  the  Siege  were  in  round  figures  six 
and  a  half  millions.  Their  present  combined  deficit  is  about  two 
millions.  Eight  and  a  half  million  dollars  of  tangible  property 
values  have  been  destroyed !  In  addition  to  these  actual  losses  is 
the  deprivation  to  the  owners,  of  the  prospective  and  potential  values 
from  the  People's  United  States  Bank,  and  Lewis  Publishing  Com- 
pany as  going  concerns  and,  especially,  of  the  enornwus  increments 
in  value  to  the  real  estate  holdings  of  the  University  Heights  com- 
pany, which  must  have  resulted  from  the  Universit}^  City  Improve- 
ment plan  and  the  construction  of  a  subway  from  University  City 
to  the  heart  of  St.  Louis.  A  reasonable  estimate  based  on  the  testi- 
mony of  expert  witnesses  before  the  Ashbrook  Committee  and  at 
Lewis'  two  trials,  of  these  added  losses,  would  at  least  equal  the 
total  property  values  destroyed.  Upwards  of  twenty  millions  of  ac- 
tual and  potential  values  have  been  wiped  out  in  this  unholy  war! 

VICTORY  IN  DEFEAT. 

As  one  reviews  thus  in  imagination  the  activities  whereby  the 
Lewis  enterprises  have  been  slowly,  steadily,  implacably  stamped 
out  of  physical  existence,  he  cannot  fail  to  be  struck  by  the  con- 
trast between  the  attitude  of  the  little  group  of  destroyers  and  that 
of  the  great  masses  of  investors  in  these  industries.  The  former 
may  now  be  dismissed  from  our  thoughts.  The  self-denial,  faith, 
loyalty,  constancy  and  courage  of  the  latter  are  beyond  all  praise. 
Their  support  alone  could  have  heartened  Lewis  throughout  the 
unequal  contest  by  which,  at  length,  he  has  plucked  the  substance 
of  victory  from  the  semblance  of  defeat.  Could  the  destruction  of 
University  City  have  been  accomplished  before  a  congressional  in- 
vestigation was  instituted,  it  seems  most  unlikely  that,  in  the  light 
of  what  has  been  done  to  Lewis,  any  other  citizen  would  have  ven- 
tured to  opi)ose  the  steadily  growing  extension  of  the  like  bureau- 
cratic methods  against  freedom  of  individual  initiative  and  of  the 
press.  Nor  is  it  probable  that  another  such  unique  personality  would 
have  soon  arisen  capable  of  assuming  the  leadership  of  a  popular 
movement  to  that  end. 

Now  that  the  full  story  of  The  Sieoe  of  University  City  has 
been  spread  upon  the  pages  of  the  official  record,  and  presented  to 
the  world  in  the  present  volume,  the  complete  victory  of  the  prin- 
ciples for  which  Lewis  and  his  followers  have  contended  is  inevi- 
table. The  report  of  the  Ashbrook  Committee  and  the  ensuing  action 
of    Congress    will    unquestionably    interpose    an    effective    barrier 


THE  DREYFUS  CASE  OF  AMERICA  771 

against  future  abuse  by  the  Postoffice  Department  of  administrative 
power.  The  decision  of  the  Court  of  Claims  may  be  safely  relied 
upon  to  do  tardy  justice  to  the  aggrieved  investors. 

The  true  issues  at  stake  throughout  this  controversy  have  been 
principles,  not  personalities.  The  abuse  of  power  and  misuse  of  offi- 
cial authority,  of  which  sundry  individuals  have  been  guilty,  are  of 
public  interest  only  as  they  disclose  statutory  defects  which  should 
be  cured  by  remedial  legislation.  Yet  there  can  be  no  doubt  as  to 
the  manner  in  which  the  official  conduct  of  the  individuals  primarily 
responsible  for  the  consequences  of  the  Siege  ought  to  be  character- 
ized. It  has  been  most  reprehensible.  Throughout  these  proceed- 
ings, the  Federal  officials  concerned  have  arrogated  to  themselves 
individually  the  sovereignty  of  the  American  Nation.  They  have 
been  unmindful  of  the  wholesome  democratic  doctrine  that  public 
officials  are  not  the  masters,  but  the  servants,  of  the  people.  They 
have  been  forgetful  of  the  principle  embodied  in  Lincoln's  immortal 
Gettysburg  address  that  the  fathers  gave  their  lives  "that  govern- 
ment of  the  people,  by  the  people,  for  the  people,  shall  not  perish 
from  the  earth."  The  initial  phrase  of  the  Federal  Constitution 
itself,  "We,  the  people  of  the  United  States,"  has  been  suffered  to 
fade  from  their  recollection.  Drawing  about  themselves  the  mantle 
of  their  own  self-righteousness,  they  have  assumed  the  attitude  that 
Lewis'  criticisms  of  the  administration  of  government,  and  the  con- 
duct of  sundry  public  servants  therein,  were  tantamount  to  a  treas- 
onable or  "anarchistic"  attack  upon  the  Government  itself.  How- 
ever much  we  may  seek  to  place  ourselves  at  the  point  of  view  of 
former  President  Roosevelt,  Postmaster-General  Cortelyou  and  their 
associates  and  successors  in  the  last  two  Federal  administrations, 
we  must  conclude  that  their  official  acts  and  attitude  in  the  cases 
of  the  People's  Bank  and  the  Lewis  Publishing  Company  are  inde- 
fensible. Though  we  should  assume  that  every  member  of  the 
Federal  Administration,  from  the  President  down,  believed  himself 
to  be  actuated  solely  by  motives  of  official  duty  or  even  inspired 
in  his  attitude  toward  this  case  by  the  loftiest  patriotism,  we  must 
adjudge  them  guilty,  in  these  matters,  of  official  malfeasance.  Nor 
can  we  regret  that,  while  University  City  has  been  sacrificed,  the 
cause  for  which  the  postoffice  inspectors  and  their  superiors  have 
contended,  is  forever  lost.  The  Congress  of  the  United  States  will 
indubitably  pass  such  remedial  legislation  as  will  curb  the  power  of 
the  Postoffice  Department  to  investigate  and  destroy  private  enter- 
prises and  individuals.  It  will  largely  modify  or  eliminate  the  fraud 
order  process.  It  will  safeguard  the  periodical  publishing  business 
from  the  exercise  by  the  postmaster-general  of  arbitrary  and 
despotic  power. 

Viewed  from  another  standpoint,  that  of  absolute  justice,  and 
judged  simply  by  its  results  according  to  the  standards  of  common 
sense  and  ordinary  intercourse  among  men,  The  Siege  of  Univer- 
sity City  must  be  regarded,  to  borrow  the  language  of  Lafcadio 


772  THE  SIEGE  OF  UNIVERSITY  CITY 

Hearn  in  a  somewliat  similar  relation,  as  "a  crime  against  human- 
ity, a  labor  of  devastation,  a  calamity  comparable  only — by  reason 
of  the  misery  and  destruction  Avhicli  it  wrought — to  an  earthquake, 
a  tidal  wave,  a  volcanic  eruption." 

The  Siege  of  University  City  is  over.  The  long  fight  which 
Lewis  has  waged  for  the  protection  of  his  investors  is  a  lost  cause. 
Y'et  the  blood  of  martyrs  has  ever  been  the  seed  of  the  church.  The 
optimistic  Irish  have  a  proverb  wliich  says:  "God  niver  closes  one 
dure  without  opening  anither."  Peace  has  been  declared.  Lewis  is 
still  at  large.  Though  penniless,  he  has  once  more  become  a  pub- 
lisher. He  has  again  devised  a  unique  plan  which  bids  fair  to  rank 
with  his  former  marvelous  insights  into  the  springs  of  confidence 
which  bring  about  co-operation  among  men.  The  American  Woman's 
League  and  the  People's  University  have  survived  the  period  of 
storm  and  stress.  Through  future  years  of  peace,  they  may  yet 
revive,  and  in  due  course  exceed,  the  measure  of  their  early  pros- 
perity. 

THE  AMERICAN  WOMAN^S  REPUBLIC. 

Finally,  Lewis  has  projected,  in  the  American  Woman's  Republic, 
an  instrumentality  for  enabling  women  to  perfect  themselves  in  the 
manipulation  and  control  of  the  machinery  of  government  against 
the  day  of  triumph  for  the  cause  of  equal  suffrage.  The  little 
Woman's  Magazine  numbers  among  its  children,  not  only  the  Peo- 
ple's Bank,  but  also  tlie  League,  the  University  and  the  Republic. 
Among  all  these  the  child  of  greatest  promise,  in  Lewis'  opinion, 
is  the  latest  born  of  his  progeny,  the  Republic  itself.  The  most 
priceless  legacy  to  Lewis,  from  the  stormy  thirteen  years  since  he 
became  a  publisher,  is  his  absolute  and  imswerving  confidence  in 
womankind.  His  former  relation  as  editor  of  publications,  for 
women,  enjoying  the  largest  circulation  in  the  world,  and  his  more 
recent  leadership  in  promoting  the  organization  of  many  thousands 
of  women  along  definite  lines  of  activity,  have  given  him' exceptional 
opportunities  to  judge  their  qualifications  and  capacity  to  deal  with 
large  affairs.  The  assaults  that  have  been  made  upon  him,  while 
acting  in  this  relation  of  leadership,  have  enabled  him  to  observe 
the  behavior  of  organizations  of  women  under  fire.  Upon  the 
basis  of  this  experience  he  has  formed  tlie  deliberate  judgment 
that  the  women  of  America  should  immediately  organize  for  them- 
selves a  practical  governmental  machinery,  both  as  a  means  of  fa- 
miliarizing themselves  with  the  forms  of  government  and  also  as 
an  agency  whereby  to  achieve  their  ultimate  enfranchisement.  It 
has  become,  withal,  a  cardinal  doctrine  of  faith  with  Lewis  that, 
granted  the  right  of  suffrage,  the  united  influence  of  the  women  of 
America  will  array  itself  at  the  polls  upon  the  side  of  truth  and 
justice  and  in  opposition  to  such  iniquities  as  have  been  revealed 
in  The  Siege  of  University  City. 

THE  END. 


/ 


PN48y9  S27U62 

Morse,  Sidney  Levi,  187^- 

The  sieqe  o.f  Uniyersity  City^ 


